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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 (105637)	7/5/2000 11:49:27 AM
From: johnsto1	Read Replies (1) \| Respond to of 120523

PDGM got cnbc pick of the week from Chase PARADIGM GENETICS Olan says that Paradigm is positioned to dominate the market for genetically altered products, since it is one of the few not directly focusing on genetic human applications. The technology sector has earned a reputation recently for erratic stock performances, but biotechnology companies like Paradigm are ready to turn a new leaf and profit from recent industry developments. Paradigm’s timing has played a large role in the company’s success, Olan says. He rates the stock "strong buy." Paradigm Genetics Post-IPO Stock Performance In a sea of genomics companies, Paradigm stands out as one of the few companies focused on other areas, such as agriculture, industrial products and nutrition, analysts say. "They determine the functions of specific genes on model organisms that are applicable in non-human applications," Olan says. "This is a new angle that sets Paradigm apart from other companies, and it’ll prove beneficial soon enough." Olan expects the company's second-quarter earnings to come in at 22 cents a share and the full-year loss to be 77 cents a share, compared with a loss of 75 cents a share in 1999, according to Olan. He adds that Paradigm's market value of $450 million still represents a discount to its competitors Exelixis Inc. {EXEL}, with an $800 million market value, and Lexicon Genetics Inc. {LEXG}, which has a market value of $475 million. The company has industrialized the process of gene-function determination for nutrition, crop production, industrial products and human health. Paradigm designed two systems to help with its quest to develop new products, and the company claims to analyze gene function 50 to 100 times faster than its competitors. Olan says that Paradigm's GeneFunction Factory and FunctionFinder are truly ahead of their time. The GeneFunction Factory is an integrated industrial-scale laboratory in which gene functions can be modified and new functions have been discovered. The FunctionFinder is a system that is used to gather, store, analyze and retrieve information on gene function. The access to all this biological technology has proven to be beneficial for a company that hasn’t been left in the shadow of the genome project announcement as many others have. Paradigm said last week that it has completed gene alterations for all the genes in a rice blast fungus and 70 percent of the genes in a wheat pathogen. These advancements can be applied to the development of new rice and wheat fungicides and eventually the creation of human antifungal products. These discoveries are significant, because they may prevent costly damage to rice and wheat. This will translate into financial benefits for Paradigm to the tune of $900 million to $1.2 billion over the next three to five years, Olan says. The analyst adds that two major deals, with Bayer AG {BAYZY} to develop herbicides and Pharmacia Corp. {PHA} for nutrition research and crop production, will continue to produce royalties on products in broad markets. "Future ventures and deals in nutrition and industrial and agricultural applications will result in some serious benefits for investors," Olan adds. Even though Paradigm reported a first-quarter adjusted loss of 82 cents a share, analysts say the company's ventures will be apparent in future quarters. The company increased its revenue to $593,000 during the first quarter, compared with $332,000 in the same period last year. Still, the company's technology has its share of drawbacks. Consumers have become more concerned with so called "franken foods" and their effects on the body. Lack of human applications for the technology may also be a risk, since the company may be viewed as less important and profitable by investors, Olan says. "Consumer confidence will eventually be gained through product testing, and there will be a realization that these products provide benefits in cost and nutritional value," Olan says. "Others give Paradigm a black mark because of the backlash possibility, but eventually the tide will turn." There are several anticipated deals in the works for Paradigm that could help the company, Olan notes. Paradigm expects several milestones over the next six months, such as a new agreement in the nutrition field, a new agreement in the industrial products field and the introduction of a new gene-function factory, capable of processing 200 genes each week. This rate of processing is faster than competitors' processing rates of between 50 and 100 genes a week. Olan says that Paradigm is positioned to dominate the market for genetically altered products, since it is one of the few not directly focusing on genetic human applications. This virtually untapped market has the potential to steal the spotlight, the analyst adds. Paradigm Genetics