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Strategies & Market Trends : Rande Is . . . HOME
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To: Rande Is who wrote (16531)12/10/1999 2:30:00 PM
From: Sye Walsh   of 57584
 
BIOCHEM PHARACEUTICALS

One of II's against the grain stocks.
First 3 quarters 99 revenue grew 31%, earnings 26%.
Has most widely prescribed drug (3TC) for AIDS.
Same drug in lower doses (lamivudine) effective against
hepatitis B.
Global mkt for two drugs exp to reach 1 Bill this yr.
Mkt prtn Glaxo Wellcome (royalties range 10% to 17% total sales.

Stock lost 30% first 10 mos of 99 : analyst fear because drop in rate of HIV infection , also worried because of difficulty to predict sales in China (one third of hep B sufferes) scarry

II comments:

HIV infection still on the rise , in devloping countries sales 3TC steadily growing. predict $640 mill in 99 ($584 in 1998)

biochem's pipeline brimming:
first to mkt (dOTC) a leap over 3TC for AIDS
nasal flu vaccine doesn't everybody
Troxacitabine; compound that prevents cancer cells from replicating.

Biochem plans to retain full ownership of many of it's new drugs and assume all mkting responsibilities, rather than relying on Glaxo. As a result they keep the sales instead of counting on royalties.

"Royalty streams from 3tc and Lamivudine should provide steady annual earnings growth in excess of 25%, giving the stock firm footing. Groome (biotech analyst National bank fin) forecasts 2000 earnings of $1.22 a share and the stock at $34.
Sye
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