9
ment for the GeneData Expressionist
software. The GeneData Expressionist
software enables enterprise-wide man-
agement and analysis of gene expres-
sion data from GeneChip products,
spotted arrays and other expression
technologies.
Another deal to
strengthen Affymetrix's leadership
position as a genomic toolmaker.
Amgen (BSR #6: Rheumatoid
Arthritis) booked 1Q earnings of 28˘
per share, edging past last year's
same-period EPS of 25˘ and beating
the consensus estimate of 27˘. Total
sales increased to $901.6 million from
year-ago sales of $814.1 million,
while product sales climbed to $798
million from $698 million. Amgen
said it expects full-year 2001 EPS
growth in the low double digits, down
from earlier company estimates for
growth in the mid-teens because FDA
approval for Arnanesp is going a little
slower than anticipated.
Despite low-
ered 2001 guidance, Wall Street is
shrugging its shoulders on the news.
BSR maintains its buys on the dips.
April 23, Amgen submitted to the
FDA additional new data from two
large-scale clinical trials supporting
the previously reported efficacy and
safety of Anakinra on the treatment of
rheumatoid arthritis. Anakinra is
waiting for FDA approval.
The company announced on
April 11 that a U.K. court has issued
a ruling in
Amgen's favor, upholding
its patent for Epogen, a treatment for
anemia. As a result, Roche will have
to withdraw from the market or pay a
licensing fee.
Amgen continues to
hold onto its Epogen monopoly.
with "growth at reasonable prices." It
will be long time before we see the
NASDAQ hitting the 5000 level, but
meanwhile there will be rallies and
probably more testing of the indices
before investors know when the bull is
back.
In the interim, we continue to
believe that now is a good time to ac-
cumulate positions in the biotech
stocks you like. Prices might never be
this low again.
Affymetrix's (BSR #40: Ge-
nomics) shares are down after a
wider-than-expected first-quarter loss,
and the company warns that sales for
the year will be at the low end of esti-
mates of $260 million to $290 mil-
lion. Product sales in the first quarter
were hurt by a decision to recall a type
of genome array set mouse, or mur-
ine arrays that had probe design er-
rors as well as by lower-than-
anticipated demand for a type of "do-
it-yourself" array instrumentation.
The recall of the murine arrays is ex-
pected to hurt product sales in the sec-
ond and third quarters of 2001, bring-
ing revenues for the year in at the low
end of previous projections.
BSR views this as a blip for Af-
fymetrix, and not due to competition
eroding its market share. Affymetrix
still remains the leader in its field,
and besides, Affymetrix's bread and
butter is GeneChips, which sold
nearly 80% compared with last year's
period.
April 9, Affymetrix and
GeneData AG, a privately-held Swiss
bioinformatics company, entered into
a nonexclusive, co-marketing agree-
market was going straight up and the
fees being generated were beyond
Wall Street's wildest dreams. Wall
Street was providing billions for com-
panies with flawed and unproven
business models simply for the fees.
Where does this leave us today? The
trillions invested in established and
start-up tech companies certainly did
generate new technologies. But Wall
Street's enthusiasm for funding every
technology idea when the fees were
there for the taking has led us to a
huge excess supply.
Our economic system is based
upon supply and demand. An excess
supply, coupled with decreasing de-
mand, results in much lower prices
for products and services, which leads
to much lower stock values. Undoubt-
edly, the technology industry has
tested the meaning of this concept.
But along the way, the effects of low-
ered stock prices have trickled down
to other sectors as well.
Federal Reserve Board Chairman
Alan Greenspan is not as lackadaisi-
cal as Wall Street portrays him to be,
especially in light of the last interest-
rate cut and his comments about con-
sumer confidence and economic
growth. Greenspan believes the bub-
ble of excess technology will be ab-
sorbed in the first half of 2001
through reduced sales, cutbacks, and
layoffs. Once we have completed the
painful process of absorbing the ex-
cess supply, business can stabilize and
things will return to normal. Con-
sumer spending will jump-start the
economy.
What does all this mean to the
average investor? For the first time in
10 years we have a market climate
BioTech Sage Report, May 2001
