GS's comment explaining (in part causing) MEDI's stock price action today, together with some valuation comparison on PE/Growth ratios. GS's comment may also imply the analyst's assessment as to when Flumist will be marketed:
<We expect the acquisition to be 30-35% dilutive for 2002 earnings.
Therefore, we are reducing our 2002 estimate to $0.68 from $1.03.
Acquisition is expected to be neutral to our 2003 earnings estimate of
$1.17. For 2004 and beyond the acquisition should be accretive.
Based on our 2003 EPS of $1.17, CAGR of 30% and PE/Growth of 1.7 to 1.8 our
12 month target is in the low $60's. For comparison the PE/Growth of AMGN
and DNA approximates 2.0-2.1.>
Any one think those parameters are too generous, in either the case of MEDI, and no gainsaying AMGN?
Peter - back on the subject of disclosure <g>, I disagree with your comment re. no duty to update disclosures (as such statements generally made at the beginning and end of cc's): Companies that give forward earnings guidance more typically than not update the guidance if the quarterly results will be materially at variance with the earlier stated guidance. You may demur that this is a special case--I would again disagree.
While generally issuers do disclaim an obligation to update forward looking statements and MAY be protected in so doing, this depends on factors surrounding the statements in question. When an issuer makes a forward looking statement as to a specific potential material development, and that development is affected adversely by another factor that develops in the interim (this, of course, is the question in the XOMA case) that itself may be material and which is not disclosed, I would argue, as I did, that XOMA and DNA had less wiggle room not to update.
Who knows what the true sequence of events was, and I certainly don't endorse that (large) element of the plaintiffs' bar that regularly extorts money for themselves in marginal cases at the expense of well intentioned issuers, but as to a blanket protection that updating forward looking statements is simply "not required" in any circumstance, I disagree.
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