Re: LFB vote
>There are so many intangibles that it is hard to determine whether it is worth the cost of the dilution.<
If this were easy, biotech investing per se would be easy. Yet we all know that it is anything but.
>Your musings in post 1164 suggest that the you would not expect any factor VIIa product to reach market before 2013. Is this based on the development time frame for Atryn? Does your estimate factor in any net acceleration due to the technical collaborative benefits and expertise of LFB.<
My 2013 estimate was based on how long it takes to enroll, complete, and analyze the kinds of clinical trials that will have to be run. Dr. Cox confirmed the 2013 date on a subsequent webcast, so it’s safe to say that I was not being unduly pessimistic.
>It seems that the attitude of the Board is that the relationship will allow more rapid diversification of plasma protein portfolio of products (which is good) but I can't quantify whether it is worth the dilution or the potential impediment this could cause to a potential future buy out of GTCB. My inclination is to vote no based on the information provided in the proxy… it seems that LFB ought to pay up more for the partnership.<
Let me reiterate that these kinds of tradeoffs are not easy. However, I can point to an aspect of the LFB deal that you may be overlooking: that FVIIa is one the most promising plasma proteins for transgenic development and LFB has already done a lot of the grunt work. Thus, the notion that LFB is not carrying its weight in the joint venture (if that’s what you were suggesting) is misguided, IMO.
>I just don't feel like a very compelling case has been made yet.<
As stated above, I think LFB brings a lot of value to the collaboration. My objection to the deal stems from the low price at which LFB is acquiring shares. However, from a practical standpoint we are being asked to vote yes/no on doing business with LFB—I think that some kind of sweetened transaction is highly unlikely.
>It sounds more like "trust us the collaberation will be good" type of thing. Any additional last minute thoughts?<
In the final analysis, management is indeed saying: Trust Us, This Collaboration Will Be Good. Could GTC have negotiated more proficiently and extracted better terms from LFB? Perhaps. But GTC’s management knows more about their business than I do, so I’m inclined to believe that this was the best deal with LFB that they could get. Regards, Dew
“The efficient-market hypothesis may be
the foremost piece of B.S. ever promulgated
in any area of human knowledge!”
