Thought I'd post the write-up below on CRLS that appeared in Barron's way back in March. The stock is selling under its March price, but with an increasing backlog it may finally be ready to show some earnings.
Anyone else like CRLS?
BARRON'S 3/10/97 From Alan Abelson's column:
An Intriguing Biotech Reports Lousy Earnings
-- We'd like to put in a plug for a little biotech outfit named Chrysalis International, which last week had the misfortune to report lousy earnings. In fact, it reported a loss for the fourth quarter, before one-time charges.
Chrysalis, which just completed a significant merger, used to be known as DNX Corp. It started out life as a regular biotech company-but now is a contract research organization. In other words, it acts as an outsourcer of research for drug houses and, to a lesser extent, other biotechs. Outsourcing, people who know about such things tell us, is a very big trend in the drug business, and a savvy investor who owns the stock sees Chrysalis growing 20%-25% a year for quite a spell.
Chrysler has some interesting assets from its previous biotech incarnation. One particularly worthy of note is an exclusive license to a patent covering a DNA microinjection process, which is widely used to transfer genes in the development of transgenic animals. Since we're all cloning cognoscenti now, there's probably no need to go into what's a transgenic animal. Chrysalis has sublicensed microinjection to several dozen companies. Indeed, just about anyone doing work in the microinjection area has to pony up a royalty to Chrysalis.
The merger apparently took a bit more doing than anticipated, which explains the disappointing fourth quarter. The company also warns that the first six months of this year won't be anything to write home about, either. But our investor friend is quite -- and uncharacteristically -- enthusiastic about Chrysalis and its prospects. A "dirt-cheap company" is the way he describes it. |
