Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Inflazyme Pharmaceuticals (T.IZP) -- Ignore unavailable to you. Want to Upgrade?

To: Sean Janzen who wrote (896)	4/24/1998 6:59:00 PM
From: Luc Richard	Read Replies (1) \| Respond to of 1501

There is not a lot of actions and I think it's a good idea to send you an article from Financial Post about Biotech company. It doesn't talk of Inflazyme but we can see that's not the only company who has trouble with stock price. Saturday, January 3, 1998 Biotechnology More dark days likely ahead By JENNIFER LANTHIER Biotechnology Reporter The Financial Post ÿThroughout 1997, investors in the biotechnology sector were confronted by reminders of the risks the group carries. The first half of 1998 promises to be no different. ÿFew industry observers will go so far as to predict a rally in the second half of this year, but there's enough strength in some biotech companies to warrant selective stock-picking, analysts say. ÿ<Image: FINANCIAL_SERVICES>"The sector has been going nowhere for the past 18 months and that has driven investors out," said analyst Mike Jams of L‚vesque Beaubien Geoffrion Inc. "I think we'll see the sector bottom out in the first half of 1998." ÿAlthough few stocks blew up last year, it was a struggle for most to hold their own. Many endured a slow, inexorable decline, as investors lost patience with delays in clinical trials or regulatory decisions. ÿSome observers also blamed a flood of initial public offerings in 1995 and 1996 for bringing too many small-cap stocks to market. In 1997, the money raised from life sciences IPOs in North America sank to US$785 million, compared with US$1.9 billion in 1996, Jams says. ÿBut even established, larger biotechs foundered in 1997. Shares in Vancouver's QLT Phototherapeutics Inc. (QLT/TSE) closed at $16, down 20› after a decline from its 52-week high of $16.25. Edmonton-based Biomira Inc. (BRA/TSE) had its best day last year on Jan. 20 when shares hit $8.70, but slumped steadily to close 1997 at $3.10. ÿ"Investors have been able to earn attractive returns in other sectors, like banks," Jams pointed out. "They ask: 'Why should I complicate my life with stocks that are tough to trade, tough to own in size and have no returns?'" ÿA volatile sector at the best of times, biotech is a not a place for the risk-averse investor. It takes on average US$300 million over 10 years to get a new drug to market. More than 80% of new pharmaceutical products do not make it through the rigorous clinical trials needed to prove their safety and effectiveness. ÿ<Image: ROYAL_BANK>However, the story surrounding a new technology or scientific breakthrough, and the potential for a billion-dollar drug, can be powerful lures. ÿ"This is a market driven by sentiment," said analyst Ann Dulhanty of Toronto's Eagle & Partners Inc. "There are people who got into it because it looked really hot, then got out when the general market conditions worsened, and a lot of good quality companies are getting close to trading for their cash." ÿIf investor confidence returns to the market generally, "there'd be a lot of enthusiasm for biotech," Dulhanty said. ÿRecent reforms made at the U.S. Food and Drug Administration could also boost biotechs, if they translate into faster approval times for drugs, Jams said. ÿBoth Dulhanty and Jams include Montreal's BioChem Pharma Inc. in their top picks for 1998. With its $3.9-billion market cap, BioChem is Canada's biggest biotech company, and one of the top five in North America. Shares (BCH/TSE) of the developer of AIDS drug 3TC closed the year at $29.10, down 40›. Dulhanty has a 12-month target price of $45 for the stock, based on a comparison with other biotech companies with similar earnings growth and an earnings-per-share estimate of $1.08 in 1998. ÿJams' 12-month target is also $45. But analyst Cameron Groome, of First Marathon Securities Ltd., is looking for the stock to reach $50, based on continuing strong sales of 3TC and approval this year in Asia for sale of the drug as a treatment for hepatitis B. ÿLarge-cap stocks such as BioChem aren't the only opportunities for earnings growth. Medium-sized TLC The Laser Centre Inc., which specializes in laser eye surgery, is widely expected to head into the black this year, and Vancouver-based ALI Technologies Inc. also shows potential. ALI markets a picture archiving and communication system for diagnostic ultrasound applications. ÿAmong the early-stage companies, Dulhanty and Jams like StressGen Biotechnologies Inc. (SSB/TSE), with a stock price target of $7.50 from Dulhanty and $7 from Jams. The stock closed recently at $3.10, up 5›. Phase 1 clinical trials for both its cancer drug and its infectious disease therapy are expected to start this year. ÿ