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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Jenna who wrote (96349)	5/5/2000 11:18:00 AM
From: Jenna	Read Replies (1) \| Respond to of 120523

<<Retailers reporting next week>> Our representative retail stock #6 today's watch list near high of the day. I might add a few WMT calls.

To: Jenna who wrote (96349)	5/5/2000 11:28:00 AM
From: Jerry Olson	Respond to of 120523

Out of long positions for the moment..

To: Jenna who wrote (96349)	5/5/2000 11:28:00 AM
From: Jerry Olson	Read Replies (1) \| Respond to of 120523

Out of long positions for the moment..

To: Jenna who wrote (96349)	5/9/2000 1:12:00 AM
From: Jenna	Read Replies (1) \| Respond to of 120523

Poor MEDX but another example of Anticipatory Upswing and the obvious danger of holding any stock, especially a biotech through earnings. Actually if you read that next to last paragraph you could place almost any biotech in the space filled with the word Medarex.... I still like them but for long term holds, I have not been able since their meteoric rise, which we grabbed, to hold them more than 5 days except CELG. CELG is the only biotech I have that did not trigger a trailing stop. I hope that tomorrow it doesn't change that 'record'. The Rise and Falling of Medarex By Brian Lund (TMF Tardior) May 8, 2000 Medarex Inc. (Nasdaq: MEDX) , a biotechnology firm specializing in the production of human antibodies in mice, issued its results for the first quarter this morning. I'm going to run through those results, but, as usual in this industry, you are to pay no attention to any of the numbers. What matters is the future -- or at least the stock price. Interest income rang in close to $2 million, thanks to a cash and equivalents balance of $416 million. Revenue fell to $2.1 million, 62% below last year's first quarter total but up 35% sequentially, if that makes anyone feel better. The net loss of $4.3 million was also much higher than a year ago but down sequentially. The per-share loss of $0.13 beat the $0.15 analysts expected it to lose, according to First Call. As a reward for beating estimates, the Market sent shares of Medarex down as much as 10% this morning for no particular reason. If that's an injustice, then so has been the company's recent meteoric rise. I say "rise" even though the stock has fallen 70% since its March 3 closing high, since the stock nevertheless has appreciated nearly 740% since November 1. That means that, at its high, shares in Medarex were up about 2700% in four months. No extraordinary event accounts for this rise. Folks seem simply to have caught on to Medarex's story. (Here's one example.) The GenPharm branch of the company produces fully human antibodies in mice by replacing their little mouse immune system genes with human ones (a process Medarex calls HuMAb). The resulting antibodies find greater acceptance from patients' immune systems than earlier treatments. Medarex and its main competitor, Abgenix (Nasdaq: ABGX) , both hold patents on this method. Medarex has signed 15 licensing agreements for HuMAb, including Amgen (Nasdaq: AMGN) , Bristol-Myers Squibb (NYSE: BMY) , and Centocor. The latter accounted for 40% of Medarex revenue in 1999 of $10 million. Most of the other deals are structured on royalties and milestone payments once the partner develops applications from the technique. Medarex also develops in-house treatments for cancer, ophthalmology, and autoimmune diseases. The company has seven products in development. Its most advanced cancer product is MDX-210, an antibody designed to slow or reduce the progression of a variety of tumors. The treatment has completed Phase II trials and is probably two to three years from FDA approval. Until that time, analysts expect Medarex to continue to lose money. How much money it will make from royalties and products is a matter for speculation. And speculate people have. Medarex took advantage of the attention it has received by issuing a secondary offering of 2.1 million shares on March 3, exactly the height of Medarex's popularity. The price was $171 per stub -- well ahead of the $65 proposed in the original filing on January 28 -- bringing $388 million into the company. The offering increased the float by 7%, but the cash now represents more than 20% of the company's market cap. Medarex may prove to be the next big thing, and it may not. Right now, you have to put your money down at pretty unfavorable odds, and you have to wait a long time before you can discern how Medarex and its licensees and itself are profiting from its technology. Gene therapies, which themselves alter human immune systems to produce better antibodies, may make Medarex's products redundant. Or they may not. That makes it very hard to understand Medarex. Investors should not be blind to that risk.