Replies to post #4279 on Biotech Values

[MatrixMan]

I just started "enjoying" a position in GTCB yesterday. I enjoyed another 5k at 1.40 just a few minutes ago. Starting to seem like it is being thrown away no matter what the price. Could mean we get a small upward boost here soon.

[DewDiligence]

>> Dew RE: GTCB. When do you see cash burn a non issue? <<

Cash burn is always an issue, but it’s a matter of degree. If the EMEA approves ATryn on schedule and GTCB launches ATryn in the EU by the middle of next year, there won’t be any need for additional financing at a low stock price.

>> And can you elaborate on dilution concerns and specific estimates of revenue streams? <<

I dealt with dilution above. Existing worldwide sales of plasma-based antithrombin products are $200-250M, mostly in Europe. Because ATryn will have the same efficacy as the plasma-based products with greater safety (no risk of blood-borne pathogens) and unlike the various plasma-based products ATryn will be available throughout the EU, ATryn ought to capture a substantial share of this market relatively easily.

Selling ATryn should be quite profitable. The ATryn program is non-partnered, there are only modest IP royalties to be paid, and GTCB’s transgenics and protein-purification technology has been fine-tuned to the point where operating margins should be in the typical range for a biopharmaceutical.

The ATryn program in the U.S., is about 18 months behind the program in Europe. A pivotal trial in the U.S. in hereditary antithrombin deficiency is expected to be started during 1H05. A U.S. trial in burns is expected to be next in line.

I’m sure you recognize that ATryn is only the tip of the iceberg for this company. GTCB is fundamentally a platform company; once the first transgenically-produced drug reaches market, it will open the door for others, perhaps many others, in both the EU and the U.S. The two companies best positioned to ride this wave are Pharming of the Netherlands and GTCB. Of these two, GTCB has the more compelling valuation at current prices.

GTCB is not an easy company to understand, and that may be one reason the valuation is as low as it is. There is much more to know than what I have laid out here. Fortunately, the information you need to make an informed judgment is readily available from SEC filings, archived webcasts, and the company’s IR department, which (unlike GENR’s IR) performs a useful function. Regards, Dew