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Biotech / Medical : XILLIX FDA APPROVED -- Ignore unavailable to you. Want to Upgrade?

To: Gari Rolfe who wrote (274)	6/11/1998 1:05:00 AM
From: Garry K.	Read Replies (1) \| Respond to of 572

I contacted Laurie at IR to pose some questions on her about the recent erosion in share price. Management is somewhat puzzled about the share price, especially since the very positive news about the Miravant deal was released. As you may have noticed, volume increased somewhat a couple of days ago. Laurie believes this may have been an institution getting out of the stock. I personally do not view this as much of a concern, for the volume was not that high. As far as company progress, the fundamentals of the company are getting stronger: sales of LIFE-Lung are progressing well, new product developments are on track and the alliance with Olympus remains strong. We also have an additional $7.2million in additional cash from the Miravant deal, as well as a future stream of drug royalties. Laurie also mentioned that four analysts have been following the company, and all had positive comments on the Miravant announcement. Hope this provides some insight. Comments?? Garry

To: Gari Rolfe who wrote (274)	6/26/1998 11:01:00 AM
From: Garry K.	Read Replies (2) \| Respond to of 572

I received some analysts reports on Xillix, dated June 4th... Midland Walwyn -- rate XLX as a 1-Buy with a 1 year target price of $4.00. Believe Xillix should receive royalties of approx. 11% based on Miravant's sales of Photopoint. This is the first time we have seen a medical device company receive royalty based on sales for a drug. We view this alliance as being one more stamp of approval for Xillix's technology and reflection of management to continue to add shareholder value. Leavesque, Beaubien, Geoffrion -- with a current market cap of only $65 million, we think that Xillix's risk-reward profile highlights the stock has a good value play. We anticipate continued commercial and scientific progress this year and expect to see Xillix stock double within a year. Our forecast calls for accelerating revenue growth beginning 1999, followed by a modest profit in 2000 and a sharp earnings breakout in 2001. If we apply the medical device industry average P/E multiple of 26X to projected F/D 2000 EPS of $.35, and discount at a rate of 30% annually, we arrive at a share price of $3.63 today and $4.72 in one year. Even if we discount at a more conservative rate of 40%, we still arrive at a price of $2.80 today and $3.92 one year out. The bottom line is that Xillix remains undervalued at today's prices, especially given its rapid growth potential and low valuation compared to other commercial-stage medical device companies. We are therefore reiterating our STRONG BUY recommendation with a 1 year target price of $4.75. Garry