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

To: tuck who wrote (170)	10/5/2005 3:08:57 PM
From: tom pope	Respond to of 238

This from 9/28: DNA; $82.55; C-1-9 12-Month Price Objective: $103.00 (21-Sep-2005) EPS (Dec): 2004A $0.83; 2005E $1.18; 2006E $1.81 P/E (Dec): 2004A 99.5x; 2005E 70.0x; 2006E 45.6x GAAP EPS (Dec): 2004A $0.73; 2005E $1.00; 2006E $1.63 GAAP P/E (Dec): 2004A 113.1x; 2005E 82.6x; 2006E 50.6x Potential Patent Loss Priced In. Genentech’s stock was down yesterday on concern that a key royalty bearing patent could be invalidated. If the so-called Cabilly patent, which describes methods of making antibodies and antibody fragments, is invalidated, royalty revenues could decline by $300 MM, EPS could be reduced by $0.12 annually beginning in March of ’06 and long-term growth could be cut from 31% to 30%. While the ultimate outcome is still uncertain, we believe the potential loss of royalties would be worth about $5 per share to DNA, in a worst case scenario, which may already be reflected in the current stock price.