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Biotech / Medical : Barr Laboratory BRL -- Ignore unavailable to you. Want to Upgrade?

To: Seth L. who wrote (102)	4/7/1998 4:33:00 AM
From: Philip Aaron Etttedgui	Read Replies (2) \| Respond to of 207

GRUNTAL UPRGRADES BARR LABS ON RECENT TAMOXIFEN CLINICAL TRIAL NEWS. Barr is the only generic manufacturer of tamoxifen and controls 75% of the total tamoxifen market. Zeneca's Nolvadex has the other 25%: The following was taken from www.gruntal.com Barr Laboratories (BRL-Strong Buy-$39) 4/6/98 Investor Suitability: Aggressive Growth We are raising our rating on Barr to Strong Buy from Buy and introducing a new one-year price target of $64 (raised from $50). Our FY98 EPS estimate remains $1.35 but we are raising our FY99 estimate to $2.15 from $2.00. Additionally, we are introducing our FY2000 EPS estimate of $2.50. The reason for these upgrades is that we are now even more enthusiastic about the outlook for Barr, one of the leading U.S. independent generic drug firms. Recently, there has been stunning news concerning Barr's drug tamoxifen, a generic form of Nolvadex used by women with breast cancer. While this drug has been used for the treatment of breast cancer, it is now believed that tamoxifen actually aids in the prevention of breast cancer as well. Breast cancer is the leading type of cancer in women affecting some 180,000 women each year. The drug is the company's leading revenue generator accounting for 69% of revenues last fiscal year and a large majority of earnings. Over the next three years, we expect EPS growth to be 56%, 59%, and 30%, respectively. This will be largely due to the earnings boost that tamoxifen should provide. At the stock's current price of $39, we believe the shares are grossly undervalued. Based on our earnings estimate that tamoxifen alone should produce, we value the stock at $39 per share. Therefore, at current levels, you are actually paying only for the value of tamoxifen and get the rest of the company for free. We would be buying shares of BRL very aggressively as our $64 price target represents a potential return of 64%. There are further details in the fax flash. (David Saks )