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Biotech / Medical : Sepracor-Looks very promising -- Ignore unavailable to you. Want to Upgrade?

To: PDL who wrote (1408)	11/11/1998 10:27:00 AM
From: BMcV	Respond to of 10280

Pete, According to a Gruntal report dated 7/31/97 (SEPR = 24 7/8), Saks was looking for $5 / share earnings by 2001. He may have boosted his estimate since then. His one-year target then by the way was $37. A more recent report from Nationsbank Montgomery calls for $3.04 in 2001, $4.89 in 2002. Dated 2/23/98, SEPR was 37; his one-year target was 47. Gruntal discounts forward earnings at 50% annually, Monty at 25%. This gives some idea of the fudge factor involved in setting price targets. Interestingly, an earlier report from Smith Barney (2/8/95) has SEPR turning profitable by '98, with estimated earnings of $1-2 / share. In later reports they were more cautious in the short term, but still calling for $4-5 by 2000. A Lehman report from fall '95 (11/28/95) called for $2.80-3 / share by 2000 and a 2000 price target of $70-75. The real star analyst was David Steinberg of Volpe Welty, whose report from 12/9/94 (before the terfendine patent was issued! -- SEPR = $4) was a voice in the wilderness. "Sepracor is unique in that it is a development stage company whose competitive edge is found in both its patent estate and its technology-rich chemistry. As a result, its ability to commercialize patent-protected, therapeutically-improved drugs in a low-risk, low-cost manner may not be fully appreciated." In my opinion, it is insights like that, not fooling with discounted cash flow models, that should be the basis of investment in companies like Sepracor. Wonder where that analyst is today? Hope he followed his own advice! Hope this helps, Bruce