Ciphergen Biosystems(CIPH): Message Board

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Biotech / Medical : Ciphergen Biosystems(CIPH):

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To: tuck who wrote (236)	7/12/2004 9:24:55 PM
From: mopgcw	Read Replies (1) of 510

Piper: Ciphergen Biosystems Underperform Volatility: Medium Ciphergen Misses Again! Downgrading to Underperform KEY POINTS: Price Target: $4.00 Shares Out (mil): 29.1 Market Cap. (mil): $213.0 Book Value/Share: $1.38 Cash Per Share: $1.36 Debt to Total Capital: 33% * Ciphergen preannounced weak 2Q:04 revenues of $10-$11 million. This is well below our projection of $17 million for the quarter. * We believe competition has dramatically stepped up in the discovery and analysis of biomarkers, which is hurting Ciphergen's ability to maintain its early leadership in the space. Further, we believe the company's BioSepra division remains a drag on performance. * We are thus downgrading shares of Ciphergen to an Underperform rating until we see some visibility of top- line growth. * We now roughly estimate the company may do $62.5 million in revenues this year. Applying a lowered 2X revenue multiple to this new forecast, we arrive at our lowered price target of $4.00 per share. * Importantly, this dramaticmiss again pushes out the timeframe in which we believe the company could reach profitability. * The company is hosting a conference call this morning at 8AM EST to discuss the results. Due to limited visibility and outlook for Ciphergen's core ProteinChip business, we are downgrading shares of CIPH to an Underperform rating. We now roughly estimate the company may do $62.5 million in revenues this year. Applying a lowered 2X revenue multiple to this new forecast, we arrive at our lowered price target of $4.00 per share. This lowered revenue multiple reflects the low end of the historical range of 2-4x as well as limited visibility increased competition. RISKS TO ACHIEVEMENT OF TARGET PRICE: Among the risks associated with Ciphergen are product adoption delays that could result in slower-than-forecast revenue growth. Ciphergen may not improve margins or control expenses, thereby missing projected breakeven of 2Q:05. Proteomics is a competitive arena with the potential for new technologies and litigation. COMPANY DESCRIPTION: Ciphergen Biosystems Inc. is a leading proteomics company that commercialized the ProteinChip system. The Company has established a large research franchise and is now advancing its protein research into biomarker discovery for molecular diagnostic applications. Ciphergen acquired BioSepra in 2001 and now sells biosorbents for protein purification and manufacturing.

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