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Biotech / Medical : SangStat Med. (SANG) - 10 of 10 analysts say Strong Buy -- Ignore unavailable to you. Want to Upgrade?

To: James Silverman who wrote (64)	1/23/1998 5:51:00 PM
From: F. Jay Abella, III	Read Replies (1) \| Respond to of 184

Jim: Glad you were able to add. Don't get me wrong, I like the idea behind SANG. But when H&Q says that profits will elude the company for 1998, no longer do the shares, IMO, warrant a 28x 1998 EPS multiple. They should, for 1998, be valued based on a model similar to that which I propose for development stage biotechs. The street has valued SANG as an operating company, which, until it gets FDA approval it is not (no profits). It has held the shares in the mid 30's based on the expectations of a profitable 1998. Since H&Q now beleives this not to be a safe assumption, the multiple SANG sees now @$30 is on anticipated 1999 earnings. IMO the shares require further discounting from here (perhaps to $22?)for the time devaluation commanded by a scenario of delayed profitability. Lets try to value it as a development stage enterprise and see what we get for 1998. FJA