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Biotech / Medical : Incyte (INCY) -- Ignore unavailable to you. Want to Upgrade?

To: George Sepetjian who wrote (599)	5/11/1998 1:30:00 PM
From: SJS	Respond to of 3202

To Thread: __________________ INCYTE PHARMACEUTICALS INC. (INCY) 33 3/8 -6 3/4. The announcement by Perkin-Elmer (PKN 72 1/2 +4) that it is creating a new venture to decipher the entire DNA, or genome, of humans within the next three years has hit the shares hard today of this genomic database products and services. On Friday, the board of PKN approved a plan to create a new venture that will embark on this process using new technology that it expected to outpace the government's $3 billion plan to sequence the human genome by the year 2005. PKN will be teaming up with Dr. J Craig Venter, president of the non-profit Institute for Genomic Sciences, who will be leaving his post to form the new venture. Also joining the team will be Michael W. Hunkapiller, president on PKN's Applied Biosystems division. The news of this new venture has prompted Lehman Brothers to downgrade the shares of Incyte from "outperform" to "neutral" as the collaboration could accelerate the reduction in demand for commercial genomic databases. While not all demand for genomic databases will evaporate, sales and earnings are likely to be hurt by a greater amount than has been built into the stock price. Certainly, the announcement will cause customer to delay purchases as they await further developments on this front as this new venture is expected to make the discovered information available freely to the scientific community. While results for 1998 should not be that greatly affected, 1999 results are likely to feel the effects of the announcement more profoundly. Currently, Lehman expects INCY to earn $0.74 in 1998 and $0.81 in 1999. This compares with 1997 net of $0.43 and First Call projections of $0.75 in 1998 and $0.98 for 1999. In due time, expects estimates for 1999 to be revised downward to factor the effects on this new collaboration deal by Perkin-Elmer.