The May 13 issue of the Dick Davis Digest carried a comment about a company
called ChiRex (CHRX) by analyst Kimberly Ritrievi of CS First Boston.
It's a nice writeup but the Edgar filing did not look very good to me since
the company had to list to many disclaimers. And a recent merger makes
the financial look bad (and maybe they are---I'm not sure how to interpret).
An excerpt from the DD Digest states:
"Sterling Organics has made drug intermediates for 30 years.
SepraChem has 50 patents in the field of chiral chemicals. Our research
suggests that no other company approaches the combination of technology
and industry know-how like ChiRex. Many molecules, including drug molecules
exist in different shapes, or isomers, with the same chemical formula.
In most conventional uses, isomers behave identically, but in the case of drugs,
they do not. An example was thalidomide, where 1 isomer prevented morning sickness in pregnant women
but another caused birth defects in the fetus. The FDA is increasingly
requiring clinical trials to be conducted on specific isomers of a new
drug molecule and not the racemic mixture. Therefore, it is most efficient
for drug companies to concentrate on their costly and time-consuming
clinical trials and the single isomer responsible for the desired effect.
In short, single isomer chiral drugs are the drugs of the future. We
think the company's sales can grow at a 60% annual rate over the next 3
years. We think earnings can rise from last year's 17 cents to 2.05
in 1998. We're very comfortable with giving this stock our strongest investment rating."
Does anyone know about this company? I really don't understand all
the chemistry. Would appreciate your opinions.
Dan Jones |
