NEW YORK, Aug 2 (Reuters) - Biotechnology stocks, which
have lagged the market since a 1991 rally, have a lot of upside
as some are finally making money and have good product
pipelines, Oracle Partners manager Larry Feinberg told this
week's Barron's.
"Unlike Internet plays, biotech products are protected with
patents with 17-year lives; the barriers to entry are much
higher," Feinberg told the "Up & Down Wall Street" column.
Feinberg told the financial weekly that investors have
"perversely" penalized biotechs such as Biogen Inc. (NASDAQ:BGEN),
Genzyme General Corp. (NASDAQ:GENZ), and SEQUUS Pharmaceuticals Inc.
(NASDAQ:SEQU) for meeting their promise by producing products and
profits.
"Either they are going to build themselves up to be the
next Merck (& Co Inc.), or else these product pipelines are
going to be acquired by someone who can," Barron's quoted
Feinberg.
Feinberg said a major drug firm could buy SEQUUS, which
closed at 9-3/8 on Friday, for $20 a share and the deal would
still be accretive to earnings.
Chiron Corp. (NASDAQ:CHIR), which has $1 billion in annual
sales, is trading at only five times Feinberg's estimate for
the drug maker's cash flow and Novartis AG (ZSE:NOVZ.N) already
owns 49 percent of the company with an option to buy the rest.
Genzyme could be bought if the price is right, Feinberg
said. Genzyme closed at 31-15/32 on Friday.
nyc.equities.newsroom@reuters.com))
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