Cypress Bioscience, Inc. (NASDAQ: CYPB)
Market Data:
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CYPB Corporate Information:
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Recent Developments
Over the past ten days, CYPB has made two significant announcements that we believe position the Company's stock for further upward movement. The two events, the sale of the manufacturing facility and the exercise of warrants (discussed in detail below) resulted in proceeds of approximately $10.4 million to the Company. From a financial perspective, we believe these events put CYPB on a more solid financial footing. But more importantly, we believe the early exercise of the purchase option reflects Fresenius' positive view of the prospects for the Prosorba column within the rheumatoid arthritis (RA) market. CYPB management also believes that Fresenius' ownership of the facility will accelerate the manufacturing scale-up, facilitate the ramp-up in marketing, and shorten the timeframe for CYPB to reach profitability. We reiterate our BUY recommendation for investors tolerant of risks associated with small-cap investments.
April 27th Announcement: CYPB announced that Fresenius AG, its global partner in the manufacturing and marketing of the Prosorba column, had exercised an option to purchase the Prosorba manufacturing facilities from CYPB. The option was granted earlier this year as part of the partnering agreements between the two companies, and was exercisable until the end of 2000. Total proceeds to CYPB, a portion of which was previously drawn down in the form of an interest-free line of credit, was approximately $5.2 million. We believe the early exercise of this option by Fresenius is a very positive development for CYPB, as it reflects Fresenius' positive views on the prospects for the Prosorba column in the RA market, should accelerate manufacturing and marketing activities, and could result in a shortened timeframe to profitability for CYPB.
April 21St Announcement: CYPB announced that approximately 2.6 million outstanding publicly traded warrants had been exercised, resulting in proceeds to CYPB of approximately $5.2 million. Approximately 200,000 warrants that were not exercised were redeemed by CYPB at ten cents per warrant on April 19, 1999. Again, we feel this is a very positive development for CYPB. It not only provides additional capital to support the commercialization ramp-up of Prosorba, but also provides additional financial flexibility with respect to other development programs and/or financing plans.
For Additional Information
Contact SmallCaps Online LLC-- 212-554-4158
Risk Considerations
This section of the document is to remind potential investors to undertake a prudent level of due diligence prior to making an investment in securities of Cypress Bioscience, Inc. For a complete description of risks and uncertainties to CYPB's business, see the Risk Factors section in CYPB's SEC filings, which can be accessed directly from the SEC Edgar filings at www.SEC.gov on the internet. Other potential risks include:
- Market risk: Like many small-cap and micro-cap stocks, CYPB's share price is trading near its 52-week low. Investors should consider technical risks common to many small-cap or micro-cap stock investments, including liquidity levels, small float, risk of dilution, dependence on key personnel, and dependence on single products or technologies.
- Business risk: CYPB has limited experience in the marketing of the Prosorba column for the RA indication. Although it is seeking a corporate partner to assist in marketing of Prosorba for RA, there can be no assurance that such an alliance will materialize, or that the market will accept the product.
- Competitive risk: There are many new drugs in development targeting the RA indication, and we anticipate the competition to be intense. Many of CYPB's competitors may be larger, better capitalized and hold dominant market positions.
Sources for Additional Information
The following are website addresses offering related information, and links to other sources of information.
www.CypressBio.com CYPB's corporate website
www.SmallCapsOnline.com SmallCaps Online's site for company information and research
www.FDA.gov US Food and Drug Administration homepage
www.rheumatology.org American College of Rheumatology homepage
www.arthritis.org Arthritis Foundation homepage
www.WHO.int World Health Organization homepage
www.AABB.org American Association of Blood Banks homepage
www.AMA-Assn.org American Medical Association homepage
www.SEC.gov U.S. Securities and Exchange Commission, with links to EDGAR filings
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