Larry,
<<HGSI>>
This is a really tough one to advise on. I own a bunch bought at much lower levels, but I'm not sure I'd have the guts to buy at these levels. OTOH, if you are talking about diversifying from another genomics company like Myriad, the switch looks more reasonable.
On the plus side, they are emerging from "IP lockup" at the end of June, and there is a fair bit of anticipation that they might announce some interesting deals. Also on the plus side, I have the suspicion that when the smoke clears they are going to be the guys with the best functional gene patent portfolio. They also have a good publicity machine, and I'm sure they have a bunch of interesting stuff they haven't yet told us about.
Their albumin fusion technology could be very significant if it pans out - it would be a pretty ironic if this is what ends up driving the stock, though.
The minus side is mostly a plain valuation question. They have a $9 billion market cap, which is very rich for a company with only an early-stage pipe with no obvious potential home runs in sight. (Of course the same can be said of MLNM, with an almost identical MC. But there at least you have some might nice partnering deals on the positive side of the ledger).
Kind of an "on the one hand" an answer I'm afraid, but all I can sensibly offer at the moment.
Speaking of valuation, it's worth noting that IDPH now sports a $11+ billion valuation - shows what one excellent product can do for you.
Peter
P.S. I should add that HGSI has an Analysts Day they are broadcasting over the net tomorrow. Worth a listen if you can get a chance. |
