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A LITTLE STOCK WITH NO VOLUME
The following is a boost from Barron's, perhaps some dramtic impact on Monday since the trading volume was only 1,100 on friday.
The company is a biotech outfit that's listed on the American Stock Exchange and, despite those impediments, is quite intriguing. Its name is Advanced Magnetics, and, should it strike a faint bell, yes, we've mentioned it before, in February. One reason we like it is that Mark Lambert does -- in fact, he owns a bundle of it -- and Mark, who runs the Biotech Value Fund (a hedge fund, we hesitate to say), is a very savvy guy on biotechs.
As we noted the first time around, Advanced Magnetics is unusual among little biotechs: It has a couple of commercial products, and it has a very healthy balance sheet, liberally trimmed with cash. The company, to give you the boilerplate description, specializes in developing and producing magnetic resonance imaging (MRI) contrast agents for diagnosing cancer and other diseases. To market its products, it signs up heavyweight partners (for example, for Ferdix, which enhances MRI for liver cancer, it hooked with Belex Labs to sell the drug here and with Eiken Chemical in Japan).
Phase III studies of Combidex, a contrast agent for use in MRI of lymph nodes, are winding up, and the drug could be on the market late next year or in early 2000. By all accounts, it has a good shot at commercial success.
Financially, Advanced Magnetics seems almost too good to be true, with a solid book, all but a smidgen of which is cash. What's more, the stock is selling within spitting distance of that book. Maybe to keep its standing in the sector, the company shows the obligatory loss.
The shares, 6 and change, are down from an all-time high of 30. Mark liked the stock back in February when it was 11. You just know he has to love it now-and, we can tell you, he does.
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