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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (13890)	2/10/2002 1:51:01 PM
From: Spekulatius	Read Replies (2) of 78683

BMY and ELN I do think that BMY is good (and probably the best) bet in the drug sector, because all the bad news are behind them - the earnings warning, the Imclone scandal and the Glucophage patent expiration. This masks some real progress in rejuventating BMY's R&D and pipeline. SGP is a riskier bet because they are about to loose 30% of their revenues (and 40% of their profits) if the Claritin/Clarinex gamble does not work out. However i do like their Zetia drug (with Merck). I have big concern's about about Zocor, MRK's 7.5B$ cholesterol drug for which the patent is due to expire in Y2006. They may need several blockbusters to make up for this one alone. ELN is a very interesting bet at this point. ELN has a very viable pipeline and trades at a P/S of 2. I don't believe that ELN management is fraudulent, indeed it has been known for years that ELN's accounting activates R&D costs and subsequently overestimates profits. However, the money spent in the biotech ventures has led to real products, so I believe that the company will survive or will be bought at significant premium (+20$/share).

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