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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: michael97123 who wrote (59795)	1/31/2002 2:01:47 PM
From: runes	Respond to of 70976

OT ELN - As far as WSJ goes - it doesn't surprise me that they are backing up the original article from WSJ Europe given that Elan just dismissed it as a rehash of old news. Its a credibility war. As far as ELN is concerned - they have their fingers in a lot of pies. They have their own pharma operations, a lot of partnerships/investments in new drug development including Biogen. They also have a solid portfolio in the drug delivery arena. The downside to ELN is that they are a foreign (Irish) so it is harder to get information on their earnings breakdown. The earnings themselves are of lower quality because of the potential for write-downs from the individual partnerships. And there is no doubt that they have been leveraging themselves for growth through mergers and partnerships. On the upside - they went through close scrutiny by the SEC in '99 and ended up with only a minor restatement (a couple of pennies). They also have solid cashflow 500 mil in '01. Their balance sheet is in good shape. They have an established track record of getting new product to market. The drug industry is not subject to the twists and turns of the economy (unlike Long Term Capital and ENE). $1.80+ this year and $2.30+ next year in earnings. As for the risk of biotech exposure - yes individual biotechs and even more conventional drug developments are high risk/high reward. Which is why ELN has 70 some research partnerships - it averages out the risk/reward. IMO - it's a shrewd way to work in a risky business. Beyond that - ELN has just taken a double hit - troubles with the Alzheimers blockbuster (trials halted to investigate) and now the Enron accounting fever which just flushed out institutional money. And this is happening at a time when there is still plenty of money on the sidelines.