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Biotech / Medical : analysts and calls -- Morgan Stanley -- Ignore unavailable to you. Want to Upgrade?

To: tuck who wrote (25)	5/15/2003 3:15:56 PM
From: Icebrg	Respond to of 31

OSI's Shares Rise on Optimism Over Cancer Drug Thursday May 15, 2:59 pm ET By Kara Wetzel [Here is something Harr likes - Tarceva. I am as confused as before. Or perhaps even more so. How can he be negative to Velcade's prospects and hype Tarceva? This guy likes to form his judgments without reading the abstracts] NEW YORK -- Shares of OSI Pharmaceuticals Inc. (OSIP) rose for a second straight session Thursday on momentum over prospects for its cancer drug Tarceva, even as one Wall Street firm warned that accelerated approval isn't assured. The stock's advance came on the heels of OSI's better-than-expected second- quarter report late Thursday. Investors are betting that new data on Tarceva's human trials, expected later this month, will show positive progress. OSI is to present the data at the American Society of Clinical Oncology's meeting in Chicago on May 31. In afternoon trading on the Nasdaq Stock Market (News - Websites), OSI shares were up $2.42, or 10%, at $26.07 after trading as high as $26.31 earlier in the session. On Wednesday, the stock advanced 12%. Its 52-week high and low of $33.81 and $11.50 were set last August and September, respectively. Among those expecting the positive Tarceva update is Morgan Stanley analyst Steven Harr, who reiterated that optimism on Wednesday and again Thursday following the company's conference call. During the call, OSI Chief Executive Colin Goddard told Mr. Harr that he expects several key presentations at the ASCO meeting to support Tarceva's activity in targeting a variety of solid tumors. For the second quarter, OSI said it lost 75 cents a share, narrower than Thomson First Call's (News - Websites) estimate for a loss of 89 cents. C.E. Unterberg Towbin analyst David Bouchey described the quarter as strong and better-than-expected, but said most of the stock's recent run-up can be attributed to anticipation of the Tarceva data presentation. Tarceva is part of a class of cancer drugs called epidermal growth factor receptor inhibitors, which work by blocking activity of a protein found in many tumors. At ASCO, OSI will present Phase II trial data on glioblastoma, a brain tumor; bronchoalveolar carcinoma, a lung cancer; and data correlating rash to survival. According to Morgan Stanley's Mr. Harr, CEO Mr. Goddard indicated there are data to support Tarceva's single agent activity in the brain-cancer treatment, and "robust" Phase II data in the BAC indication. Strong data on the brain- cancer indication would be important, Mr. Bouchey said, since there aren't many treatments available for that type of tumor. Mr. Goddard was also optimistic about current Tarceva Phase III trials for refractory nonsmall-cell lung cancers and the possibility the drug could be approved for that indication by mid-2004. Mr. Bouchey, while positive on several indications for Tarceva, said the refractory lung-cancer treatment is where Tarceva may show many of its benefits. In Phase II trials, the drug was shown to improve response as well as survival - - something Tarceva's main competitor, AstraZeneca PLC's (AZN) Iressa, was not able to do. Lehman Brothers analyst Jim Birchenough was less bullish than the rest of the Street, warning that OSI faces great uncertainty in the next 12 months. "We continue to believe that a survival benefit will be hard to come by in Tarceva trials and believe a path to accelerated approval is far from assured," Mr. Birchenough said in a research note. All three analysts, as well as Mr. Goddard, also indicated that Tarceva will more than likely fail in one of its indications, front-line lung cancer. The competing drug, Iressa, failed completely at this indication. None of the analysts own shares of OSI. C.E. Unterberg doesn't have an investment banking relationship with OSI, but Morgan Stanley and Lehman have or may seek banking relationships with the company.

To: tuck who wrote (25)	5/16/2003 12:19:29 PM
From: JFitnich	Respond to of 31

To all, Harr is a big MDCO supporter and I think that bias colors his decision on MLNM regarding Integrilin at the very least. He believes that Angiomax is going to continue to take measurable share from the 2b/3a drugs going forward. I'm not saying he isn't a good analyst. He was on mark with Scios, a stock I did well with following his comments. He followed it before the majority of the other analysts on the street. He may be conservative regarding Velcade or he may just be negative re: MLNM because of MDCO. JF