Replies to post #15718 on GTC Biotherapeutics (fka GTCB)

[biopearl]

Since LFB is owned by the government, presumably, to make money, every taxpayer is a shareholder at least in some sense, correct me if I am wrong. I doubt dividends will be paid to the French masses. The addition of GTCB would add a pittance to the total income of such a company because the denominator is so huge. Yet the money to support operations is probably not significantly different over the short term to ensure survival, wholey owned or not. The incentives to GTCB management inspired by happy independent share holders would presumably be manifested differently than by the French Department of Energy and technology. Independent contracting with a small motivated company with a small denominator of shareholders might provide the incentive of independence to management and the satisfaction of serving their shareholders in an honorable fashion. Too much on call for me, John, I'll probably try to take another shot at this when more cogent, if ever that happens. bp

[DewDiligence]

>What is the value to LFB of having GTC be a publicly traded company vs being a subsidiary of LFB? (Thriving or not.)<

This seems like the wrong question to be asking—i.e. it’s secondary to the question of what is the value of GTC in any form to LFB.

Many of the recent posts on this board seem to be based on the thesis that LFB is strongly committed to transgenics; however, I see no evidence of this. Rather, what I see in LFB is a company that has some interest in transgenics but is far from committed to the technology.

LFB has aggressively pursued non-transgenic manufacturing solutions even after partnering with GTC in late 2006. For instance, LFB inked deals in 2007 with CRXL/DSM (#msg-21530514) and with MAbgene (#msg-22578639), both of which rely on production of antibody drugs using cell culture.

Meanwhile, the progress during the past two years on LFB’s programs that are partnered with GTC has been minimal. This can be ascertained by scanning the charts GTC has used on its investor presentations that depict the timeline of each drug program in the pipeline; the most recent such chart is in #msg-33482901.

In short, LFB does have an economic interest in helping GTC to thrive, but it’s hardly what I would characterize as a high level of commitment to either the technology or the company.