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Strategies & Market Trends : The Rational Analyst -- Ignore unavailable to you. Want to Upgrade?

To: Susan Saline who wrote (1206)	6/20/1998 10:41:00 PM
From: HeyRainier	Read Replies (1) \| Respond to of 1720

Hey, you made it look nice. Thanks Sue! (EOM)

To: Susan Saline who wrote (1206)	6/22/1998 10:20:00 AM
From: HeyRainier	Read Replies (1) \| Respond to of 1720

[ EK ] Now how about that trend line failure for EK. Any thoughts? Regards, Rainier

To: Susan Saline who wrote (1206)	7/31/1998 1:36:00 PM
From: Scott H. Davis	Read Replies (3) \| Respond to of 1720

[Biotech technical analysis assistance request] Development stage biotechs are getting hammered prime time. I'm strongly considering picking up more VICL since it's seriously on sale. (RSI, BBands & Stochs jointly confirm) This is an ultimate winner since they have so much clinical success against a broad enough pipeline with serious alliences with 5 major pharmas & great technology (gene based therapeutics and naked DNA vaccines). VICL is my strongest pick of any biotech I have ever followed. The decline has not come on high volume. The potential for this biotech is huge, and due to the factors above plus their very sound financial postion and management stregnth their real risk is much lower than most in their sector. One example - their DNA vaccines for malaria and hep B. The attached link from BA Rob. Stephens is fairly concise (the new coverage recomendation was also significant since there was no equity financing involved) biz.yahoo.com There are so many potential new items on the horizon (especialy for their partnerships with the Mercks of the world) that one risk with VICL is not holding when more news breaks. A writeup from Lehman Bros follows below for more background. But NZYM is a biotech infrastructure company that makes peptide buiding blocks for drugs. They are doing so for a number of meds in clinical trials, and as some move into aproved status, the volume will build & now have a couple drugs they have received large orders for. They are increasing capacity with infrastructure for more. They are profitible but uneven. Their price has risen somewhat recently, bucking the market & especially the sector. I suspect some buyers are expecting a good qtrly report. So what are your thoughts? from a business case perspective, I like both. If VICL, where do you see support or how much lower do you see this going? Do you see a pullback with NZYM or an imminent ceiling? Your input would be most seriously welcome. Scott Headline: Vical: Announces Start of DNA Cancer Vaccine Trial Author: Matthew Murray, PhD (212)526-5689 Rating: 2 Company: VICL Country: COM CUS Industry: BIOTEC Ticker : VICL Rank(Old): 2-Outperform Rank(New): 2-Outperform Price : $17 1/8 52wk Range: $19-11 Price Target (Old): $32 Today's Date : 07/10/98 Price Target (New): $32 Fiscal Year : DEC ------------------------------------------------------------------------------ EPS 1997 1998 1999 2000 QTR. Actual Old New Old New Old New 1st: -0.13A -0.05A -0.05A - -E - -E - -E - -E 2nd: -0.15A - -E - -E - -E - -E - -E - -E 3rd: -0.01A - -E - -E - -E - -E - -E - -E 4th: -0.07A - -E - -E - -E - -E - -E - -E ------------------------------------------------------------------------------ Year:$ -0.36A $ -0.48E $ -0.48E $ -0.50E $ -0.50E $ 0.24E $ 0.24E Street Est.: $ -0.55E $ -0.53E $ -0.70E $ -0.66E $ - -E $ - -E ------------------------------------------------------------------------------ Price (As of 7/9): $17 1/8 Revenue (1998): $8.1 Mil. Return On Equity (98): N/A % Proj. 5yr EPS Grth: N/A Shares Outstanding: 15.6 Mil. Dividend Yield: N/A Mkt Capitalization: $267.2 Mil. P/E 1998; 1999 : N/M; N/M Current Book Value: $2.97 /sh Convertible: - -Debt- to-Capital: 3.3 % Disclosure(s): C ------------------------------------------------------------------------------ * NEWS: Vical announced the start of a Phase I/II clinical trial using a DNA vaccine for patients with metastatic melanoma. The trial is being conducted in collaboration with Dr. Steven Rosenberg, a leading cancer researcher. * PROGRESS: The use of gene therapy in this trial is a expansion of the immunotherapy work previously done by Dr. Rosenberg which we highlighted in a First call note on March 4th. * ADVANTAGES: We believe that Vical's gene therapy technology can offer several therapeutic advantages over the peptide approach, including sustained expression of cancer antigens and the lack of a limitation to patients with a specific immunological profile. * OTHER TRIALS: We believe that there will announcements on the initiation of DNA vaccine clinical trials by Vical's corporate partners Pasteur Merieux Connaught and Merck in 2H98. * RECOMMENDATION: We continue to rate Vical a 2-Outperform with a 12-month price of $32/share based upon a 35X P/E off of our 2001 EPS estimates of $2.46 and using an annual discount rate of 50%. ----------------------------------------------------------------------------- CLINICAL TRIAL Vical announced the start of a Phase I/II clinical trial using a DNA vaccine for patients with metastatic melanoma. The trial is being conducted in collaboration with Dr. Steven Rosenberg, a leading cancer researcher. In this National Cancer Institute sponsored study up to 16 patients in the first stage are scheduled to receive the DNA vaccine (gene for a modified gp100 antigen) by either intramucscular or intradermal route. In the second stage, the more effective route will be used to test 33 additional patients. These patients will also receive IV administration of Interleukin-2 (IL-2), a potent, immune system stimulant. The study protocol is likely to consist of a dosing regimen of one DNA vaccine immunization per week for four weeks. After each immunization, IV administration of IL-2 will follow every eight hours for five days. The trial will enroll patients that have failed standard therapy for this cancer. The primary endpoints are safety and toxicity with efficacy measured by tumor shrinkage. We believe that initial data is likely in the first half of next year.