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Biotech / Medical : Elan Corporation, plc (ELN)
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To: Qualified Opinion who wrote (2391)6/24/2002 9:39:37 PM
From: arnie h  Read Replies (2) of 10345
 
<Analyst attributes lower estimates due to reduced investment income.>
The analyst mentioned here said earnings would be a solid $0.78 this year even with his reduction.
So, we're now selling at <9/1 P/E. It's my view that the risk/reward ratio is such that 2005 Leaps represent a rather attractive bet.
Some very strong pluses could materialize over that time span. Even just a few could do wonders for the stock price. Among these are:
> resumption of AN 1792 trials
> start of clinical trails with beta secretase candidate
> completion of Phase III Antegren trials and pending FDA approval
> positive results from restructuring plan or new, well respected CEO
> Successful restructuring of EPIL/QSPE debts with minimal dilution
> Completion of SEC investigation with minimal change or changes that hurt the past but don't affect ongoing operations
> Significant commercial progress with a couple of JVs.
> minimal effect of generics on current product streams
> big pharma interest in buyout
> the overall market takes on a rosy tone

On the possible negative side are:
< further debt downgrades
< SEC investigation uncovers criminal behavior and/or requires major restatement such that positive earnings
were not achieved nor could be expected within the time frame
< clearing the EPIL/QSPE debt requires major dilution
< both commercial and R&D results disappoint

I may have missed some but it does seem to me the bet here favors the long side.
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