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BioTime, Inc. Message Board

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  • a__1 a__1 May 7, 1998 3:22 PM Flag

    I am long

    I was trying to get across that Asensio is not

    lying--he is certainly putting his spin on things,
    but
    lying he is not. so let�s go back to the
    beginning.


    In message 1100, you say:

    >By the way,
    this points up another untruth claimed
    >by
    shortseller Asensio. He states in his reports
    >and
    news releases that BioTime "Has no assets."

    >Eight patents and an Exclusive License Agreement

    >(sic) with a major pharmaceutical company form a

    >valuable franchise indeed and are quite a set of

    >assets. This is in addition to the $6 Million in

    >cash the company has in the bank. If he knows

    >BioTime owns these patents he's lying to his

    >clients. If he doesn't, he's incredibly negligent

    >in his research.
    > ---Mark A.
    Voelker

    Your argument seems to be as follows:

    Asensio
    said that BioTime has no assets.
    Eight patents and
    an exclusive license agreement
    are assets.

    ergo, Asensio is lying or incredibly negligent in

    his research.

    I couldn�t find where he stated
    that BioTime �Has
    no assets�. Maybe you were
    paraphrasing or taking
    something out of context, but I
    think Asensio�s
    argument is that not only does
    their lead product
    have little potential, but there
    are few underlying
    assets of the company,
    tangible or otherwise.

    In
    http://www.asensio.com/biotime2.html, Asensio
    *does* say:

    >Even assuming
    the most optimistic outcomes, we
    >found no
    legitimate reason for BioTime's current
    >$135 million
    market capitalization. As of December
    >31, 1997
    BioTime had $6.3 million in cash and
    >total assets
    of $6.7 million. Among its few non-
    >cash
    assets are a total of $127,000 in equipment.
    >In
    its over seven-year history, BioTime no product

    >sales and cumulative losses of $12.8 million. Even

    >based upon an unrealistically favorable assessment

    >of BioTime�s Hextend profit potential, we value

    >the stock at well below $2 per share.

    But I�ll
    give you the benefit of the doubt, and
    assume that
    somewhere he did say-and was not just
    quoted as
    saying-that BioTime has no assets.

    To me, Asensio was
    pretty obviously describing
    BioTime�s balance sheet
    and/or its book value. Now
    if you believe Hextend
    has great potential, I admit
    BioTime�s current
    book value really doesn�t matter.
    However, his
    argument--which I don�t *completely*
    agree with--is that
    Hextend is a non-improvement
    over any existing
    product in a crowded marketplace
    of decreasing size.
    If you believe that the stock
    is overvalued
    based on optimistic forecasts of
    Hextend sales like
    he does, then you need another
    way to value the
    stock. Most people would look to
    the book value of
    the company.

    In message 1247, I
    said:

    >Unless a patent is lisenced in, whereupon a value

    >can be placed on it, the patent is not counted on

    >the balance sheet, ergo he is not lying, at least

    >about the patents. This is to prevent companies

    >from inflating their balance sheet by overvaluing

    >their patents

    Now, my point in that posting was
    this: BioTime
    cannot value its patents on its
    balance sheet
    unless it bought them from someone
    else, in which
    case it can value them and
    depreciate them.
    Moreover, they are only valuable *IF*
    Hextend makes
    money.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • In message 1290, you said:
      >�a_1" in
      message 1247 took issue with my claim
      >that
      BioTime's six patents covering Hextend and
      >their
      other solutions are assets, and that Asensio

      >was negligent or dishonest in claiming that

      >BioTime "has no assets" and "no valuable

      >technology."

      >BioTime's patents do in fact cover the solutions

      >licensed to Abbott Labs for manufacture and

      >distribution.

      So what?

      In message 1290, you
      continue:
      >True, patents and other intangible assets
      are not
      >included on a company's balance sheet
      *when
      >calculating that company's book
      value.*

      A half-truth. If you buy a patent from someone

      else, THEN you can value it on your balance
      sheet.


      More from your message 1290:

      >But book value
      is not a useful measure of
      >reasonable market
      value for a company like
      >BioTime, and Asensio's
      bringing up book value
      >(even though he doesn't
      call it that) is
      >misleading.

      It�s not
      misleading. It�s based on HIS OPINION that
      Hextend is a
      non-product. Most people would agree
      that if Hextend is a
      failure, i.e. his opinion is
      right, then the way to
      value the company is a
      function of the present
      value of the future
      earnings of its non-Hextend
      products in its
      pipeline and the company�s book value.
      Now if you
      think those future earnings are huge,
      then you have
      one more reason not to look at the
      company�s book
      value. But if you think they�re not, you
      better
      look at the book value.

      If you
      disagree with him and you think Hextend is a

      blockbuster, then you don�t care about the present
      book
      value. It�s that simple. If you do agree with
      him,
      though, you gotta look at the book value.

      Still
      more from your message 1290:

      >Do you find,
      on the balance sheet of the Coca-Cola

      >Company, a dollar value attached to the secret

      >formula for Coca-Cola the beverage? Yet this

      >formula is the foundation of most of that

      >company's earnings potential, not Coke's material

      >assets and cash working capital.

      Huh!?!!!??? I
      know Coca-Cola--and BioTime is no
      Coca-Cola. :)
      For one thing, BioTime�s intellectual
      property is
      protected by patents. Coke�s is a trade
      secret. But
      more importantly, I will repeat myself:
      If you
      disagree with him and you think Hextend is a

      blockbuster, then you don�t care about the present
      book
      value. It�s that simple. If you do agree with
      him,
      though, you gotta look at the book value.

      Finally,
      in message 1290, you say:
      >Similarly for
      BioTime. Based on the results of the
      >Phase 3
      clinical trials, and on studies like R. L.
      >Bick's
      paper, Hextend is clearly superior to
      >generic
      hetastarch in normal saline solution,
      >demonstrating
      a rate of complications due to
      >bleeding 4
      times lower than the generic solution.
      >This is
      the real asset at BioTime, not the
      >company's
      lab equipment and cash on hand.

      Who is
      misleading whom?! Ask BioTime whether they
      are going to
      be able to claim that Hextend is
      �clearly
      superior to generic hetastarch in normal
      saline
      solution� based on �Phase 3 clinical trials,
      and on
      studies like R. L. Bick's paper� The trial
      was way
      too statistically underpowered to claim
      that, so
      of course they can�t claim it. Ask them.
      Who is
      it clear to? Surely not the FDA.

      You are
      being just as misleading as Asensio by
      saying it is
      clearly superior as he says it clearly
      isn�t. There
      is some evidence from the clinical
      trial that it
      may be somewhat better. But the trial
      was
      designed to show equivalence.

      My bottom line is
      this: I don�t believe that
      Asensio is lying about
      his forecast for BioTime,
      but he may be wrong.
      With respect to the assets of
      the company, he
      certainly isn�t lying--his
      assumptions are

 
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