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Genzyme Molecular Oncol. (GZMO) Message Board

  • anotheranalyst anotheranalyst Sep 25, 2002 5:11 PM Flag

    Weds. Another Day of Heavy Selling

    Almost a repeat of yesterday, except for today's lighter volume (although it was still almost four times the 50 day simple moving average daily volume). Volume weighted average price was $.93 (same as yesterday) on 187,600 shares (vs. yesterday's 406,600 shares). Many large block trades (for GZMO), virtually all between $.90 and $.95 per share. Very obvious that an institution is trimming its position in GZMO. Could be a forced sale. INCA was again the Ax and stood on the ask (controlled the asking price) all day. This pattern may continue until this month is over, especially since there's no news expected until October. This remains a great opportunity to buy GZMO at a bargain basement price. It appears that one or more institutions are doing just that based on the size and number of the block trades yesterday and today.

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    • Small caps bio's aref getting HOT folks!!

    • Small caps bio's aref getting HOT folks!!

    • There was net institutional selling of 660,000 shares in the last Q. Looks like this quarter will be even worse.

      Gladpick, Re: "The fact is even if the stock gets delisted it does not matter to those who are planning to wait it out for a product."

      I believe the share price does matter. For example, it causes a lot less dilution to sell $25m worth of stock at 10 than at 1. If you have bought at 10 and the dilution over the next 8 years occurs at 1, even a blockbuster drug will have trouble bringing the stock back to 10.

      Just my opinion.

      • 1 Reply to ames3149
      • ames,
        I guess I tried to oversimplify the importance of share prices. What I really meant to say is that if a blockbuster is produced there will be enough money for us and those who receive the additional shares due to dilution.
        Naturally it would be preferable for share prices to remain as high as possible. Absent that we have to look at the possibilities given the present market conditions. So I did the following:

        Assuming that the burn rate remains constant at the present $30Mil/yr and that a blockbuster product could be marketed in 4 years from the end of 2001 generating a net profit of $50 mil/yr:

        Burn for 4 years (X$30mil) =$120 mil
        Less cash on hand as of end of 2001 of $42 mil gives us cash need of $78 mil.
        Let us say we have to issue shares to GENZ at $.78/share to finance this amount. That would require 100 mil shares. This would bring the then total shares outstanding to 115 mil. If
        we assume that a block buster product with the $50/yr net profit is possible, that would give us $.44 earning per share. A PE of 25 would give you $11/share value. A PE of 30 would give you $13.20.

        My calculations may be wrong and my assumptions may be too optimistic. If anyone would care to comment I would appreciate it.

 

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