Pharmacopeia, Inc. (ACCL) (Prev: PCOP) Message Board

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Biotech / Medical : Pharmacopeia, Inc. (ACCL) (Prev: PCOP)

ACCL 4.400

+8.9%

3:59 PM EST

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To: AV8R who wrote (177)	6/19/2004 8:50:02 AM
From: AV8R	of 179

Forbes Wolfe Nanotech Report Nanosphere Alert Dear Subscriber, We're reiterating our Buy on Accelrys [ACCL] shares, as the stock's decline has brought the company to bargain price levels. We previously highlighted Accelrys (formerly Pharmacopeia) in October 2002 when the company traded for little more than the cash on its balance sheet. The stock ran up more than 200% over the next 18 months. Today we see a similar opportunity, as ACCL's solid cash position (roughly $100 million) comprises more than half of its market capitalization ($194 million). ACCL shares have plunged in recent weeks, due in part to investor confusion surrounding the spin-off of Pharmacopeia Drug Discovery [PCOP] and the dramatic decline in Accelrys' reported revenues relating to the switch to subscription accounting. While the accounting change will depress recognized revenues in the short term, Accelrys said it actually expects to book a modest increase in orders in fiscal 2005 compared to the twelve months ended March 31, 2004 (fiscal 2004). At $7.95 per share, we think the negatives are priced into the stock. In calendar 2003, Accelrys' software business generated $85.6 million in revenues. While ACCL's competitors trade at nearly 4 times Enterprise Value (market capitalization plus debt, minus cash and equivalents) to Sales, Accelrys shares are priced at a below-market 1.1 multiple. We continue to believe Accelrys will benefit in the coming years as the materials discovery and development process shifts to sophisticated software simulation. The ability to model and simulate novel nanoscale phenomenon will become a top priority for corporations with nanomaterials development efforts. We continue to rate ACCL shares a Buy for long-term nanotech investors.

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