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Author: Smufty2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 892  
Subject: Ziopharm Date: 6/10/2007 11:42 AM
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I have just begun to take a look at Ziopharm Oncology so these are only my initial thoughts. First, unless my memory is faulty, the CEO was in training at Memorial Sloan Kettering Cancer Center the same time I was there, and was definitely there at the same time my buddy was a pediatric oncology fellow and subsequent faculty. I contacted my buddy who remembers him in the same way I do (forgive my french here) as a smart a$$ surgery fellow who became faculty - most definitely extremely smart, but also an...
The board has some Very impressive figures and, if it is more than window dressing, this bodes well.
Paul thinks that several of the drugs look promising so it appears to be more than a one trick pony.

Here is my take on the pipeline:

ZIO-101 - organic arsenic - early testing phase - if it can replace arsenic trioxide you are looking at sales > $40 million/year. Did not find any obvious potential competitors being developed.

ZIO-201 - stabilized ifosfamide - early testing phase. Currently Bristol-Myers-Squibb sells $108 million/year of ifosfamide. This product could take a huge chunk of that market.

ZIO-301 - indibulin - may be most exciting of the pipeline - early testing phase - if it can take a chunk of the market for either the vinca alkaloids and/or the taxanes the profit could be huge, probably in the hundreds of millions of dollars.

Overall impression: some potentially good drugs here. I would guess the surest bet (but with the lowest economic potential) is ZIO-101. Its success would justify the current share price. Success with any of the other two would result in a probable multi-bagger.
My biggest concern is that none of the products are in or near phase 3 testing which is the most expensive and time consuming aspect of the drug development process. This stock could languish for a few years and slide due to dilution or negative results (which are far more likely at this stage). I also have had trouble analyzing possible competition. I think this is a long term hold on which you probably should have a time frame of several years. The prominence of the people involved could cause a steady rise in price due simply to increased awareness.

Because it has 3 good potential products, it may be an earlier candidate for a buyout by a bigger cash rich, pipeline poor Pharma.

Smufty

One more thought about ZIOP. Looking at its chart, it seems to have settled into a nice wide trading band while it awaits further developments. I have found similar patterns in miners developing properties to be profitable - i.e. in addition to a core position, it may be a good equity to also have a trading position with limit orders to buy just under $5 and sell around $5.75 thereby pocketing a 15% return each roundtrip.
Expand the time frame on this chart to see what I mean:
http://stockcharts.com/h-sc/ui?s=ZIOP&p=D&yr=0&mn=6&dy=0&id=0
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