Elite Pharmaceuticals Inc (ELTP)

[Steges]

Mr. Treppel: "It's all a matter of risk profile. The least risky business is a straight contract research service. The company just gets paid to do formulation work. It doesn't take any of the risk, but also doesn't get much of the economic rewards either. The next stage is that, instead of doing just formulation work, the company does some of the early-stage clinicals, and following that does some of the late-stage clinical trials. The value accretion curve in pharmaceuticals is very high, and what that means is that the difference in value between licensing a product that has completed Phase I versus licensing a product that has completed Phase III or has an NDA already filed, is logarithmic. The value of a product accretes very rapidly once it gets into human clinical trials.