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Biotech / Medical : Incyte (INCY)
INCY 102.05+0.3%Nov 21 9:30 AM EST
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To: Filippo Zucchi who wrote (718)8/22/1998 11:26:00 PM
From: Vector1  Read Replies (1) of 3202
 
Incy is down because they purchased Hexagon,a small Britsih company that has proprietary technologies for uncovering single nucleotide polymorphisms (SNP). In connection with the purchase they plan to set up a separate division to create a high density SNP map. The project will require a substantial increase in R&D spending. This spending will adversly effect INCY's earnings profile and the company had been trading on a multiple of 99 and 00 earnings estimates. The company plans to create a tracking stock to preserve their earnings visibility but at least one quarter will be damaged and the current market seems to hate tracking stocks.
By all accounts the Hexagon purchace and the push into SNPs is the right move for INCY. SNPs have the potential to create a unique way to help in disovering genes and their function. It is one of the predicates of pharmacogenomics and INCY is in a great position to play a leading role. There is competition most notably from Genset in France which has a 1 year advantage and PNK in collaberation with Craig Venter. For what it is worth i purchased shares on Friday at $21. It is a long term play. In this market it could move lower and i would leave room to buy more.
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