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Biotech / Medical : XOMA. Bull or Bear? -- Ignore unavailable to you. Want to Upgrade?

To: Robert K. who wrote (10801)	7/15/1999 9:19:00 PM
From: Tharos	Read Replies (2) \| Respond to of 17367

Money Daily Thursday, July 15, 1999 Biotech: The next big thing? Well, a Merrill bigwig thinks so anyway. The travails of drug company Elan. An Apple a day keeps profits away. By Bethany McLean BUY-O-TECH? Biotech ranks up there with gold and Japan as out of favor--areas that contrarians keep trotting out--well, to be contrarian. So far, they've all been wrong, almost every time. But at a lunch at Merrill's World Financial Tower headquarters today, John "Launny" Steffens, who runs Merrill's retail brokerage business, said (unprompted) that "biotech is the Internet of the next decade." He's putting his money where his mouth is: Some 25% of his portfolio (not including his Merrill stock) is invested in biotech. I promised I wouldn't disclose names, but Steffens did demonstrate an online trade where he sold 100 shares of AOL at $123 3/8 and bought 200 shares of Genzyme at $56 3/16. (The purpose of the lunch was not for Steffens to talk biotech, but rather for him to talk about Merrill's new offerings and how they are being received by its army of brokers. Of course, everything is just peachy. Steffens even said that he's getting "semi-addicted" to e-mail. Whoa!) ELASTI-ELAN. What will it take to bring this stock down? Elan, an Irish pharmaceutical company that has long been a battleground between longs and shorts, is wearing down its detractors. Even though the WSJ wrote a "Heard on the Street" about how the SEC is investigating Elan's (questionable) accounting practices, Elan managed to diffuse the issue. The company said that the SEC's review was "routine." Today, its stock is HIGHER than it was before the WSJ piece. But one stubborn short still isn't giving up. He claims to have a copy of the SEC's letter, and says it's "anything but routine." He also says that accounting issues aside, if you tax Elan's earnings (it pays almost no tax because it's Irish) and assume that someone buys it for the same multiple that Abbott Labs paid for Alza (an Elan look-a-like), you get a take-out price of $29 a share. Elan currently sells for $31 5/16 a share. Of course, that nice front page WSJ story about Elan's potential drug for Alzheimer's disease helped. But as our (admittedly cranky) bear points out, that drug is a long way from approval..... If you wish to receive the Money Daily as a text-only email instead of as HTML, send an email to listserv@pathfinder.com. In the body of the message, write: SET MONEYDAILY TOPICS: TEXT