Here is an article from the San Diego Union that mentioned ISIP this weekend:
Healthy prognosis: Biotech stocks making recovery
DON BAUDER
19-Sep-1998 Saturday
Some beaten-down biotechs are making a comeback in this market.
The question, of course, is whether the recovery will last. Biotechs are
inherently very speculative. And this week has been a triple-witching
affair (expirations of stock options and index options and futures), so
it's hard to peg overall market trends.
Biotechs have been weak for some time, but were eviscerated in late August.
The model portfolio for Berkeley-based Medical Technology Stock Letter
plunged 21.6 percent in the last two weeks of August, as the aggressive
portfolio swooned 53.7 percent.
The biotech index compiled by San Diego Stock Report yesterday closed at
185.41, up 5.1 percent -- climbing much more than the overall market, which
inched up slightly. The local biotech index is now down 53.4 percent from
its all-time high in early October, but it has been down as much as 67.1
percent.
James McCamant, editor of Medical Technology, has taken to the hustings to
proclaim that biotechs should bounce back. Some biotechs are "ridiculously
cheap," McCamant says, and fundamentals "are not impacted by international
economic problems, or even the possibility of a recession in the U.S."
Biotechs should not be considered so risky anymore, says Caroline L.
Copithorne of Prudential Securities.
"They have no exposure to economic downturns, no exposure to emerging
markets," Copithorne says, and she does not worry about above-average
valuations.
Bud Leedom, publisher of San Diego Stock Report, says that many biotechs
are selling near the value of their cash per share.
"How much lower can they go?" asks Leedom, noting that Agouron and Idec,
which both have products on the market, have recovered nicely.
Agouron, which closed yesterday at $31.50, up a rollicking 10.53 percent,
has shot from a low below $20. But within the last year it sold as high as
$56.50. Idec, which closed yesterday at $25.13, up 1.52 percent, is up from
$17.25, but its 52-week high is $47.38.
"The market is trying to differentiate between those companies that have a
product and are generating some revenues and those where hope springs
eternal," says David N. Allen of Torrey Pines Securities.
Agouron initially dropped because of Wall Street's doubts about its AIDS
product, but the product is still the best on the market and the selling
was overdone, Allen says.
He likes Isis, whose Vitravene treatment for retinitis has Food & Drug
Administration approval and is ready for market.
But some stocks that have been hit hard "will remain under a cloud until
they have something very specific to announce," Allen says. He puts
Advanced Tissue Sciences and Amylin in that category.
"Medical stocks are more defensive, and health care expenditures are
rising, so there is some catch-up momentum taking place in selected local
biotechs," Allen says.
"I have noticed institutional activity in Agouron and Idec," Leedom says.
"Immune Response has promise and Isis has made a nice comeback, but
others
like Advanced Tissue and Amylin have a way to go -- investors aren't
showing enthusiasm."
McCamant says that Agouron has almost no intermediate term risk. Isis and
Ligand are also low-risk. In addition to its retinitis product, Isis has a
very promising treatment for Crohn's disease, he says.
Ligand will be launching new products in the fourth quarter and is a buy at
under $16, McCamant says. Yesterday, it closed at $7.13, up 0.88 percent.
Immune Response, which closed yesterday at $10.53, up 1.51 percent, is "not
just an AIDS company anymore," Copithorne says. It is best known for its
developmental work on an HIV treatment, but now the company is making
headway with a treatment for rheumatoid arthritis, she says.
Meanwhile, the company's developmental Remune AIDS treatment has shown
positive results in a major Thailand test, Copithorne says. She has a
strong buy on the stock.
Neurocrine Biosciences has bounced from $4 to yesterday's close of $5.25,
down 3.45 percent on the day. It has been as high as $11.88 in the last
year. The company in the second quarter took stiff acquisition-related
charges, but Copithorne believes the aggressive expansion is justified. She
has an accumulate rating on the stock.
Don Bauder's e-mail address is don.bauder@uniontrib.com
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