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Biotech / Medical : ChiRex (CHRX) -- Ignore unavailable to you. Want to Upgrade?

To: scott who wrote (87)	12/9/1997 9:08:00 AM
From: Haseltine	Read Replies (2) \| Respond to of 130

Dow Jones story.... =ChiRex Falls 16%, Possibly On Sales By Momentum Inves DJ 12/8/97 4:01 PM By Sean Davis NEW YORK (Dow Jones)--ChiRex Inc. (CHRX) shares fell nearly 16% Monday on heavy volume, possibly as a result of momentum investors interested in sequential earnings growth getting out of the stock, a company official said. The Stamford, Conn., contract drug-ingredients maker received calls recently from momentum investors inquiring about the prospect of fourth-quarter earnings coming in higher than those of the third quarter's 14 cents a share, Chief Financial Officer Michael A. Griffith said. "Our stock is not a sequential growth story," Griffith said. "Some people in the stock were not aware of this." Griffith didn't say whether the fourth quarter would show sequential earnings growth, as the third quarter did. But the company did try to squelch investor interest in sequential earnings growth. "We tried to take the steam out of it by telling the sell side, if people are talking about sequential growth, they're mistaken," Griffith said. In the year-ago fourth quarter, ChiRex earned $1.5 million, or 13 cents a share, on revenue of $24.5 million. A consensus of two analysts surveyed by First Call Inc. puts net income for the fourth quarter ending Dec. 31 at 16 cents a share. These analysts were unavailable for comment. ChiRex has been climbing steadily since a $9.50-a-share public offering in March of 3.5 million shares held by Sepracor Inc. (SEPR). The issue hit a year-high of 26 3/8 on Oct. 6. "There's a lot of buying interest at appropriate levels," Griffith said. "The stock had gotten through that." ChiRex's share price gained momentum earlier this year when the company announced plans to buy a plant in Scotland from Glaxo Wellcome PLC (GLX). The purchase closed in October. ChiRex's other plant is also in Scotland. In connection with the purchase, ChiRex received a five-year, $450 million contract from Glaxo to produce drug ingredients at the plant. However, the plant won't yield profit until the 1998 fourth quarter, setting up a back-ended earnings outlook for the year, Griffith said. This is already reflected in analysts' earnings estimates, he said. The consensus of two analysts surveyed by First Call puts 1998 net income at 98 cents a share. The analysts see 1997 net income of 56 cents a share. ChiRex recently traded at 21, down 3 7/8, or 15.6% on Nasdaq volume of about 437,000 shares, more than double average daily volume of about 159,300. Block volume was 95,000, higher than average block volume of 83,792. -Sean Davis; 201-938-5400 (END) DOW JONES NEWS 12-08-97 04:00 PM Copyright 1997 Dow Jones & Co., Inc. All rights reserved.