The buying opportunity occurred well before this news came out midday. This should in theory reverse some of the negative that has been hanging over INCY since AFFX first sued them. INCY seems to clearly have patent precedence over AFFX. I just wish these two would cross license and compete in the markets rather than in the courts, the attorneys don't need the cash. I think INCY now has AFFX by the short hairs in a fight that AFFX started. I also think INCY/Synteni is going to blow AFFX Genechips out of the water in the market place and leave AFFX with just a small niche specialty market. While AFFX was an innovator, Synteni has a better system. I really think the electronic industry based production systems that AFFX uses just won't be able to compete with the Synteni Molecular Biology based one. Plus, Synteni has the INCY DNA sources that AFFX lacks.
I think there is some anxiety because INCY hasn't released financials yet, and Zacks/Yahoo shows them due on the 13th which has come and gone. This can be looked at as a negative and panic some, and it seemed like a market panic day. Well, INCY is always a bit slower releasing the annual data than the quarterly data, there is more work involved in putting it together.
Plus, there is a bunch of paranoia about Celera signing Amgen to a deal stealing potential INCY customers. Well, Celera is still new with nothing much to fill their dbases yet - still a wannabe vapor company. Notice that they don't put a dollar value on the deal either. Of course you can get the Amgen the biggest biotech to do a deal with you if you give it away - but it sure looks good in a press release. You can bet that much of what Celera fills their dbases with INCY will already have sequenced and own. Only Celera and their customers won't know this for years yet until the patents issue and the interferences kill them. Celera is going to be selling property that they don't have clear title to and anyone that buys it from them is doing so at considerable risk of having to give it away later.
Furman Selz's downgrade is just another typical panic on their part. They did this when INCY first announced INCY Genetics and panicked the markets and they were clearly wrong. They are wrong again. INCY publically anticipates continued 40% growth. I almost get the feeling that Furman does this to undermine INCY and create a buying opportunity. 6 analysts still show INCY as a Strong Buy, but you've got this one panicked analyst trying to kick the chair out from under them. I wouldn't be surprised if Furman unloaded their INCY in the days before they dropped their rating, then will buy it back after they rate it a hold and the price drops for a quick profit.
Also, the fact that PKN has shipped ABI 3700 sequencers finally, well behind schedule, to Celera makes the uninformed think that they have some advantage on INCY. Keep in mind that these are the first shipped units, to their own JV company, so I'd consider these Alpha units that will still need to be debugged. Well, INCY has orders in for 3700's too so that they can assess them, and if they are better than the MegaBace then they will switch, but they doubt they are. I figure INCY has a two year lead on the sequencing technology since they've been using the MegaBace that long. PKN is playing catch up with the 3700 versus the MegaBace not taking some kind of lead. They are both highly automated 96 capillary systems, it's just that PKN is better at garnering the media and hyping themselves. Many also think that the 3700 is not as good for long sequence reads, which aren't as good for doing contigs and full length genes, but better for short reads more amenable to shotgun sequencing = finding all the junk DNA. INCY is more interested in the coding expressed DNA and not the junk. Let Celera have the junk DNA, by the time they figure out what good it is the patents will have expired anyway.
Word I got by the way is that INCY now has 10,000 full length genes sequenced. Celera probably has one, if that.
INCY has twenty something clients, never lost one yet, and keeps signing up the existing ones to bigger deals.
Celera has one, Amgen, which is a tiny company compared to the INCY Pharma customers, and you can bet Amgen got a special first time signer deal at giveaway prices.
When you call it a buying opportunity for INCY, you have it right. Take it while it is being given away.
Rman |
