Replies to post #1200 on GTC Biotherapeutics (fka GTCB)

[shears]

It seems to me the key to this deal is what else besides Factor VIIa is availble to profit on and how long will these other proteins take to get to market? Having a larger share of this potential market revenue is great and if Factor VIIa is just the start then I'm happy. If the whole deal is just for Factor VII (and hopefully maybe something else) it doesn't make much sense to me. I don't see a huge market there. I think management could allude to future prospects (a little more concretely) without tipping their hand on the particulars. I will definately hold the shares I have but I can't justify buying more without better information on why selling this much of the company makes sense without a better understanding of what is being gained. It would be nice to see some deals struck in the future for contract manufacturing that don't require further dilution and provide a more robust revenue stream going forward.

[DewDiligence]

LFB addendum re the BoD composition:

A notable feature of the LFB collaboration is that, if approved by GTC shareholders, the LFB share purchase will bring a new director from LFB to GTC's BoD. I consider this a good thing because GTC’s BoD is a little stodgy and could use some fresh blood.

If there’s a knock to be made on GTC’s BoD, it’s that five of the nine existing directors are old-timers who have been associated with GTC for ten years or longer. If the new LFB director replaces one of the old-timers, then the old guard will no longer have a voting majority. I consider this a positive.

[urche]

insider ownership

Going thru the posts over past few days, I am struck by the number of posters who are incensed about GTCB management striking a deal not aligned with the interests of shareholders. I sympathize with that point of view, but feel it is both somewhat mistaken and moot (in that it is virtually a done deal).

Dew pointed out that businesspeople outnumber the scientists on the BOD.

Let's also consider insider interest .

From the proxy statement DEF 14A (Filed: 24-04-2006)(pardon the formatting):



Number of Shares Percent of
Name and Address of Beneficial Owner + Beneficially Owned Class
Directors and Named Executives:
Geoffrey F. Cox (1) 831,350 1.36 %
Robert W. Baldridge(2) 65,075 *
Kenneth A. Bauer(3) 15,000 *
Francis J. Bullock(4) 72,500 *
James A. Geraghty(5) 225,527 *
Michael J. Landine(6) 15,000 *
Pamela W. McNamara(7) 33,800 *
Marvin L. Miller(8) 32,000 *
Alan W. Tuck(9) 57,000 *
John B. Green (10) 381,316 *
Gregory F. Liposky (11) 246,922 *
Harry M. Meade (12) 335,508 *
Daniel S. Woloshen (13) 244,479 *
All executive officers and directors as a group (13 persons) 2,555,477 4.18 %
Five Percent Stockholders:
Genzyme Corporation (14) 5,298,243 8.66 %
500 Kendall Street,
Cambridge, Massachusetts 02142
William Harris Investors, Inc. (15) 2,694,812 5.23 %

Without even trying to conjecture about the interest of Genzyme and Wm Harris Investors, the executive officers and directors own a healthy chunk of the company. I'd like it to be higher but >4% is high enough to make me feel good if not warm and fuzzy about their interests being aligned with mine.

Also, the latest 10Q lists about another 4.4 million options outstanding, of which about half are at prices under $4.

If I am figuring correctly, counting together the insider ownership and reasonably in the money options, management has an interest in the company around 8%. So, I think it is expedient and short-sighted to blame them for not being aligned with shareholders.


urche