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Biotech / Medical : Cell Genesys (CEGE) -- Ignore unavailable to you. Want to Upgrade?

To: Jim Buckley who wrote (941)	6/7/2000 1:10:00 PM
From: david james	Respond to of 1298

From Today's Briefing briefing.com 07-Jun-00 Cash Is King [BRIEFING.COM - Robert Walberg] Elvis may be the King of Rock & Roll and Muhammad Ali may have been the King of the Ring, but in the investment world it is cash that is king. We're not referring to the cash held by investors, though those traders smart enough to move into cash in late February are king-like in our opinion. No we're talking about the cash held by companies. In today's more conservative investment climate, Briefing.com contends that investors will want to shy away from companies that are cash-poor. The rise in rates and the miserable performance by the tech sector/market over the past couple months has made it very difficult for companies, especially those with limited histories, to raise additional capital. Any company that will have to go to the market with a secondary offering in order to raise funds is likely to seriously underperform over the near- to intermediate-term (at least). Consequently, we advise sticking to those companies with enough cash on hand to fund operations for at least the next six to eight quarters. Two examples of companies with ample cash and bright long-term prospects are CNet (CNET) and Cell Genesys (CEGE). Though both stocks took beatings during the recent market meltdown, we maintain that they are well-positioned for the long-term given that the emerged from the sell-off with very strong financials. In fact, the first thought that comes to mind after breaking down Cell Genesys' numbers is "I'll buy that for a dollar." Actually, in this case it's more like two bucks, but that's about all an investor is paying for CEGE's operating business at today's price. Hard to believe but it's true. Let's do the math. CEGE has about $250 mln in cash, which divided by 33.7 mln shares outstanding comes to roughly $7.40 per share in cash. The company also holds about a 12% stake in Abgenix (ABGX 110), which is valued at $534 mln, or about $15.80 a share. Add the two together and you get $23.20 in cash and l/t marketable securities. Subtract that figure from yesterday's closing price of $25 and you are paying a mere $1.80 for the company's operating business. So even though Cell Genesys lacks the kind of pipeline Briefing.com likes to see in a Biotech company, as none of its drugs/therapies are beyond Phase II trials, it more than makes up for that fact with its financials. CEGE can use its cash to aggressively fund new R&D. It's a long-term bet, but if you're looking to take a flyer in the volatile but exciting Biotech industry this a low-risk way of doing it.

To: Jim Buckley who wrote (941)	6/9/2000 7:54:00 AM
From: david james	Respond to of 1298

Looks like the CEGE stake in ABGX is going to go up to 9.704 million shares. biz.yahoo.com Also, another plug for the value of CEGE. biz.yahoo.com Gene Therapy Makes a Comeback By Nadine Wong, Biotech Stocks Columnist Riding a wave of positive news, gene-therapy companies are shaping up to the challenge of finding cures. Gene therapy has been making headlines recently. But for a lot of people, the question that pops into their heads is, ``What is gene therapy?'' In a nutshell, gene therapy is dissecting a virus, creating a nice clean vehicle or vector and putting therapeutic genetic material inside the virus. The manipulated viruses are then inserted into the patient to deliver therapeutics to the diseased area, perhaps alleviating the patient's symptoms or curing the disease. In theory, gene therapy should work, but the technology hasn't been able to deliver the goods. It has been plagued with technical problems, such as side effects. In one instance, a patient died, leaving a question mark on the value of gene therapy. Now it appears that gene therapy is the Comeback Kid, especially on news that French scientists have used gene therapy to give a normal immune system to two babies born with a rare, life-threatening immune disease. The babies have SCID, or severe combined immunodeficiency disease, preventing the babies' bodies from producing immune cells that ward off infection, meaning that the most minor of germs could be lethal. Do you remember David, the ``bubble boy'' who lived in a plastic, germ-proof enclosure? He, too, had the disease. It's far too soon to know if the babies are cured, but the procedure is an important milestone and the gene therapy seems to have worked. Carrying a Load There are several companies whose key strengths will enable them to realize the potential of gene therapy. One of them is Cell Genesys (Nasdaq:CEGE - news), which focuses on the gene therapies to treat diseases such as cancer and cardiovascular disease. Cell Genesys reported earlier in the week positive results for its hemophilia gene therapy. What I like about this company is that they are loaded. Management was smart and tapped into the piggy bank. This year they sold 840,000 shares of Abgenix (Nasdaq:ABGX - news) stock, and it now has more than $200 million in cash. Not to mention that its remaining 12.5% stake in Abgenix is worth millions. With its newly strengthened balance sheet, I expect Cell Genesys to accelerate some of its pipeline projects, including GVAX cancer vaccine in prostate cancer, GVAX vaccine in lung cancer and gene therapy for hemophilia. I also expect Cell Genesys to license a late-stage oncology product candidate during the year. Last, but not least, Cell Genesys has an intellectual property estate of more than 200 issued and allowed patents on gene therapy and gene activation. The company is a compelling investment for the long run and is a buy below $25. Its trading right now around $24.