[Stock Talk - Further info on TRIBY]
When the (expected) strongly positive qtr 4 report comes out, potential investors doing DD on TRIBY will find four recent positive releases:
Trinity Biotech Announces Launch Of Uni-Gold H. Pylori Test
biz.yahoo.com
Trinity Biotech plc Launches Uni-Gold(TM) HIV With Smithkline Beecham
biz.yahoo.com
Trinity Biotech Receives FDA Clearance On Adenovirus Test Kit
biz.yahoo.com
Trinity Biotech Signs Contract Extension With Warner Lambert
biz.yahoo.com
These show TRIBY building & expanding product lines & business relationships, and a successful FDA submission
Up to recently, TRIBY appealed to a very limited pool of potential investors - small/micro cap, growth/speculative. TRIBY's #s were not the stuff that passed value investor's screens. When the 4th qtr report is out, that changes substantially (neg EPS to positive, positive ROA/ROE...
Zacks has the biotech sector ranked 45/211 TRIBY was one of their highest rated in this catagory (dropped off Zacks list in last few weeks)
The following was taken from This weeks Briefing.com's sector outlook
14) MEDICAL, BIO....2/1...........2/06...........(+)
Comment: Briefing is boosting its rating on the biotech sector to s/t slightly outperform and long-term outperform based on the following factors:
Discounted prices. The group suffered a serious sell-off late last year, leaving many stocks undervalued.
Collaboration creating increased stability: The new business model - collaboration - improves the financial underpinnings of this volatile sector, increases the likelihood for new drugs and should result in a wave of consolidation.
New drug developing methods: Improved technology reducing costs and speeding up the front-end of the development process... Will translate into bolder innovation and a plethora of new drugs in the years to come. Genomics, high throughput screening, combinatorial chemistry, bioinformatics, rational drug design, antisense therapy and signal transduction among new methods helping to usher in a new age of medicine.
Favorable political/demographic backdrops: FDA moving more quickly to approve new drugs... Population aging.
No Asian flu: Finally group has little to no exposure to Asia... Also exhibits insensitivity to economic cycles.
Stocks:Agouron Pharmaceuticals (AGPH), Amgen (AMGN), Biogen (BGEN), Centocor (CNTO), Cephalon (CEPH), Chiron (CHIR), Genzyme (GENZ), Human Genome Sciences (HGSI), Idexx (IDXX), Immunex (IMNX), Incyte Pharmaceuticals (INCY), Icos (ICOS), Isis Pharmaceuticals (ISIP), Liposome (LIPO), Myriad Genetics (MYGN), NABI (NABI), Scios Inc. (SCIO), Vical (VICL).
(I'm also bullish on VICL and ISIP)
Finally, from Michael Murphy, who's technology picks & analysis are often far better than his timing
Q: What about biotechnology, do you have a biotech fund?
A: Yes we do. I thought 1997 would be the year of biotech and I made a
terrible mistake. I put on half of the fund in biotech and it did nothing for the
whole year. Companies got approvals but there was no halo effect on the rest
of the industry. I still have half of the fund in biotech. The number of biotech
approvals is doubling every year. There were 6 approvals in 1995, 13 in
1996, 25 in 1997 and we are going to have 50 this year. The biotech's have
been in a 5 year bear market with very little relief. Many companies had to
focus and cut out pie in the sky projects. We have seen many approvals
recently. We are going to see a couple of big ones here, Myotrophin will be
approved. The FDA can now approve a new drug from a single clinical trial
as long as it is safe. Myotrophin is for Lou Gerigs Disease and the FDA is
under a lot of lobbying pressure to approve it. It does not save people lives
but it allows them to stay more functional much longer. Cephalon is still sitting
in the $11 area and think that it will hit the $20's when Myotrophin is
approved.
Q: Anything else interesting in the biotech area?
A: InSite Vision is a glaucoma company with a number of different drugs for
glaucoma. They are about to announce a major corporate partner because
they have the rights to two genes that were discovered related to glaucoma I,
adult glaucoma, and juvenile glaucoma. From discovering these genes they
have developed a test that can detect glaucoma 10 years before an
optometrist can detect adult glaucoma. If you can detect the juvenile glaucoma
gene in a newborn, you can go in and check their eyes and clear the tubes
within the eyes. If you wait too long the tubes will have hardened and there is
very little that you can do. Many children go blind from this unnecessarily.
Since it is a diagnostic test done outside the body and a DNA test done in a
lab they can get approval very rapidly. The FDA is very loose on approving
something like this, possibly within 90 days.
There are many depressed companies in the biotech sector. The biotech
sector was one of the worst hit groups after the Asian crisis broke and yet
there is no logical connection between the far East and Biotech. I think they
got hit down because they were viewed as speculative stocks. Maybe the
portfolios that held emerging countries stocks also held biotech but they just
got clobbered. We have put half of our technology fund into biotech and I
think it will pay off this year. The FDA is getting more relaxed, the money is
flowing from the larger pharmaceutical companies into research, plenty drugs
are coming into fruition, a lot of clinical success and yet many of the biotech
stocks are going down the toilet, we really don't get it.
SUMMARY - expanding product line combined with expanding distribution channels, expanding market (the Point of care market is growing significantly as we collectively seek ways to lower healthcare expenditures - who heard of "day surgery" 25 years ago?) leads to expanding margins - pretty good combination in the hands of management that has put together a solid, growing business.
Let me know what you think. Scott |
