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Biotech / Medical : ICOS Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Lel H who wrote (732)	6/29/1999 12:35:00 AM
From: Edscharp	Respond to of 1139

From Medical Technology Stock Letter - dated June 24, 1999 "Though subsequently recovering about half of the loss, ICOS stock received a significant haircut last week in response to the results from the Phase II trial for leukArrest for patients suffering from Hemorrhagic shock. Although the drug was safe and inhibited pulmonary and cardiac failure in the high-dose patient group, there were not statistically significant improvements in the two primary endpoints of the 150-patient study. More specifically, LeukArrest did not result in a lowering of the amount of crystalloid given to patients in the first 24 hours, nor did the drug reduce the occurrence of multiple organ failure. Statistically significant improvement in the secondary endpoints, including 28-day mortality, was also not achieved. On a more positive note, there was an indication that LeukArrest reduced the incidence of acute respiratory distress syndrome associated with hemorrhagic shock when given at the high dose. Future study of the indication is pending. Though this news is a modest negative, the sell-off in the stock was a clear over-reaction by Wall Street. Given the number of compounds that ICOS has in development, and the number of indications for which each compound is being tested, a certain number of disappointments are to be expected. In fact, ICOS management has made this very clear. their strategy from day one has been to test product candidates for four or five indications and take forward the most promising one or two. This greatly reduces the longer-term risk. It also seems quite absurd that ICOS' stock price prior to this news was based largely on anticipation of the results from this single trial. We remain very comfortable with the story at ICOS. The day following this news, ICOS announced that they have named a a new President and CEO. Paul Clark, most recently head of pharmaceuticals at Abbot Labs, will replace George Rathmann as CEO. Rathmann will remain chairman of the ICOS board, Clark has a very impressive resume. He essentially saved the pharmaceutical division of Abbott, and turned it into the company's largest profit maker. We are going to raise our buy limit and target on ICOS' stock for a combination of reasons. First, the management situation at the company has been clarified in a very positive way. Second, it is clear that the company is continuing to make excellent progress in the clinic. Along these lines, although the stock corrected significantly in response to the above news, it was never in danger of approaching our buy limit, and subsequently bounced impressively once Wall Street realized that the news was not that bad. This tells us that the stock is not too likely to see our $30 buy limit in the foreseeable future. ICOS is now a buy under $40, with a target of $70."