Actually, the 'FY03 guidance came in a few million below their last prediction:
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Hence the sell off. Revenue range for this quarter, established by the five analysts following the company, was $16 to $18 million.
The growth story is still there. Really, CIPH had been doing well under conditions that whacked many in the industry. Market guidance from trickle companies has been mixed, I'd say overall it is guardedly positive. I expect a modest comeback in biotech and pharma R&D spending, but this has been priced in already. I got my Mom and a friend out of CIPH several weeks ago, fearing just such a quarter.
I would also still like to see more visibility in their development plans for their diagnostic business. As Peter has repeatedly pointed out, it is likely that CIPH would find the biomarker pattern and collect small royalties on the tests, which would likely be performed by ELISA. The company has never been specific about whether or not it intended to promote the use of its chips versus ELISA for these tests. They may not be able to compete on price (don't know what economies of scale can be realized to bring the cost down to that of ELISA), so there would have to be some other advantage to compete with. I can't think what that would be.
It might be worth asking IR. In any case, they have seen some uptake in the automated front ends to their systems, but there's room for more, including conversions (really add-ons) by customers that currently do not have them. They have said that the automated systems tend to promote usage of more consumables, so that is important. This trend might provide support in future quarters, and I might well get back in on further weakness, though I do not have an entry target price in mind at this time.
Cheers, Tuck |
