The Nanosphere
Coverage
Current
52 Week
Market
Buy/
Company [symbol]
Technology
Initiated
Price
Range
Cap ($mil)
Hold/Sell
Intellectual Property Incumbents
Leading researchers in nanotech, with big potential for spin-offs and revolutionary breakthroughs.
IBM [IBM]
Nanoscale storage and nanotube transistors
3/02 $83.35 $72.50 - $89.94 $130,190.00 Buy
Hewlett-Packard [HPQ]
Molecular transistors and switches
3/02
32.80 19.81 - 34.52
92,770.00 Buy
Instrumentation
Tools that allow researchers to view and manipulate nanoscale matter.
Veeco [VECO]
Atomic force microscopes
3/02 23.58 12.83 - 25.17
710.96
Buy
FEI [FEIC]
Focused ion and electron beam microscopes
1/03
21.45 17.66 - 26.00
727.11
Buy
Materials
Companies producing nanoscale materials with novel properties that have applications across a wide range of industries.
Symyx [SMMX]
Novel materials discovery
3/02 29.10
22.84 - 31.09
979.00
Buy
Modeling
Companies developing software to visualize, model and simulate matter and activity at the nanoscale.
Accelrys [ACCL]
Molecular rendering and analysis software
3/02
7.02
4.73 - 8.74
183.50 Buy
Platform Technologies
Companies that have corralled key intellectual property that will be the foundation of future developments.
Nanosys [private]
Nanowires and nanostructure-enabled devices
3/02
n/a
n/a n/a n/a
NVE Corporation [NVEC]
Spintronics-based MRAM
7/03 17.10
11.50 - 20.75 78.35 Hold
Investment Firms
Companies that are investing in promising early-stage nanotechnology startups.
Harris & Harris Group [TINY]
Non-volatile RAM, drug delivery, nano-optics
5/02 12.99 10.10 - 16.10
269.62 Hold
Nanobiotechnology
Companies that are working at the intersection of nano- and bio-technology.
SkyePharma [SKYE]
Nanoparticle solubilization for drug delivery
8/02
6.78 6.24 - 11.19
425.72 Buy
Flamel Technologies [FLML]
Nano-encapsulation for drug delivery
8/02 19.99 14.35 - 24.48
459.67 Hold
Immunicon [IMMC]
Nanoparticles for medical diagnostics
5/04
4.43 3.05 - 6.33
122.20 Buy
Starpharma [SPHRY]
Nanoscale dendrimers
1/05
3.90
3.30 - 9.40
56.17 Buy
Invitrogen [IVGN]
Nanoscale labeling and detection
11/05
63.25
60.14 - 88.50
3,360.00
Buy
*Nucryst Pharmaceuticals [NCST]
Nanocrystalline silver
04/06 12.00
8.88 - 12.13 218.38 Buy
*New addition
Word on the Street
IBM:
IBM has built the first complete electronic inte-
grated circuit around a single carbon nanotube mole-
cule. Significant because the circuit was built using stan-
dard semiconductor processes and used a single
molecule as the base for all components in the circuit,
rather than linking together individually-constructed
components. This can simplify manufacturing and pro-
vide the consistency needed to more thoroughly test
and adjust the material for use in these applications.
HPQ:
With a soaring stock and renewed investor con-
fidence, Hewlett-Packard has once again begun to
highlight its HP Labs' vaunted research. HP presented
journalists with memory designs that would be several
magnitudes more dense than today's DRAM and mi-
croprocessor technology that could result in chips
more than 100 times smaller than current processors.
HP also showcased the use of quantum physics to
make virtually unbreakable encryption.
VECO:
Veeco tacked on gains after reporting its Q1
2006 results. Veeco generated Q1 revenues of $93.9
million, flat with last year and below Wall Street's pro-
jections of $95 million. The company reported Q1
2006 EPS of $0.09 per share, compared to $0.01 last
year, and above guidance of $0.05-$0.08. Veeco's data
storage orders hit a record $70.4 million, up 55% from
the previous year. Veeco maintained its forecast for
2006 revenues between $440-$450 million and proj-
ects Q2 2006 EPS of $0.12-$0.16 on revenues of $105-
$110 million.
F
EIC:
FEI Company shares surged immediately after
Vahe A. Sarkissian announced that he was resigning as
CEO. He will also resign from the board and relin-
quish his title of Chairman by May 11, 2006. Current
CFO Ray Link will act as interim CEO while continu-
ing as the CFO. Thomas Weisel reiterated its Q1 fore-
cast for revenues of $109.2 million and EPS of $0.04
per share. We believe FEIC stock has an attractive val-
uation, boasting a 1.4x price to sales ratio. We reiterate
our Buy rating.
SMMX:
Symyx shares rose more than 6% after the
company reported Q1 2006 financial results and a $30
million stock buyback. Symyx boosted revenues 26%
over the previous year to $27.1 million and Q1 EPS of
$0.10, up from $0.07 last year. For FY 2006, the com-
pany expects to generate EPS of $0.53-$0.58 on rev-
enues of $125-$135 million.
ACCL:
Accelrys announced that the NASDAQ granted its
requested extension to May 31, 2006 to file its quarterly
report on Form 10-Q for the fiscal quarter ended Decem-
ber 31, 2005. The delayed filing is a result of required re-
statement due to changes in previous years' accounting
and is not due to any fundamental business problem.
SKYE:
SkyePharma declined 7% after announcing the
results for FY 2005. Revenues declined 18% from
$134.2 million to $10.94 million due primarily to the
absence of a licensing transaction on Flutiform, con-
tinuing Paxil CR supply problems and slower overall
market penetration of Triglide and DepoDur. In addi-
tion, the company undertook a strategic shift away
from license terms that prioritize upfront payments
towards deal structures with higher royalty rates and
increased milestone payments tied to product revenue
targets. SKYE's 2005 operating loss including excep-
tional items was $66.9 million, compared with $5.5
million in 2004, due principally to the reduction in
revenue and to increased marketing contributions.
The company's net loss was $90.9 million, versus $33.2
million in 2004. The company has refocused its efforts
following the tumultuous 2005 and we expect more
positive results in the coming 12 months.
IMMC:
Immunicon rocketed 36% after the company
extended a R&D agreement with Pfizer [PFE] under
which the companies are developing new reagents de-
signed to detect antigens on circulating tumor cells. The
collaboration began in February 2003. A new Phase I
trial has been added to the agreement and will begin en-
rolling participants. We maintain our Buy rating.
SPHRY:
Starpharma signed an agreement with the
National Institute of Allergy and Infectious Diseases
(NIAID) to fund a clinical trial to test the use of Vi-
vaGel in the prevention of genital herpes. This latest
support from the NIH is in addition to a previously
announced $20.3 million funding to support the de-
velopment of VivaGel for the prevention of HIV. In
both cases, funding is non-dilutive for shareholders
and has no negative impact on the commercial returns
that Starpharma will receive from VivaGel. With a
market capitalization of $56 million, we consider
SPHRY shares undervalued. As the number of ADR
shares outstanding grows (currently at a clip of 15%
per month), we believe the stock will reflect the com-
pany's promise.
IVGN:
Invitrogen pre-announced lower than expected
sales for Q1, but also said earnings would improve
based upon lower royalty expenses and fewer shares
outstanding. IVGN said it expects quarterly sales of
$309 million, below the $320 million Wall Street had
expected. Bear Stearns cut the stock's price target from
$79 to $70. The company maintained 2006 pro-forma
EPS guidance of $3.90-$4.10 (versus Wall Street's fore-
cast of $3.93 per share), but widened its revenue fore-
cast to $1.3-$1.36 billion.
Forbes/Wolfe Nanotech Report
is published monthly by Forbes Inc. and Angstrom Publishing LLC, 60 Fifth Avenue, New York, NY 10011
Editor:
Josh Wolfe
Contributing Editors:
Dan McCarthy, Amanda Gefter
Forbes, Inc.
Group Vice President/Editorial:
James W. Michaels
Vice President/Editor, Newsletters:
Matthew Schifrin
Senior Editor:
Nikhil Hutheesing
Designer:
Gail Stoicheff
Subscription Director:
Lauren Klopacs
To subscribe, call: 800-353-8198; or visit Forbes.com Investment Newsletters (www.forbesnewsletters.com on the Web. )
For editorial information, e-mail: nan-
otech@forbes.com Copyright 2006 by Forbes
Inc. and Angstrom Publishing LLC
NOTE: The Forbes/Wolfe Nanotech Report is neither a market-timing
service nor a model portfolio. Companies listed in the Nanosphere are
early leaders in nanotechnology and, as such, should interest investors
seeking to orient their portfolios toward this revolutionary technology. It
does not guarantee that securities mentioned in this newsletter will pro-
duce profits or that they will equal past performance. Although all content
is derived from data believed to be reliable, accuracy cannot be guaran-
teed. Josh Wolfe and members of the staff of the Forbes/Wolfe Nanotech
Report may hold positions in some or all of the stocks listed. Josh Wolfe
and members of Angstrom Publishing LLC may provide consulting serv-
ices to some of the companies mentioned in this
publication.
8
·
April 2006
© Copyright 2006 Forbes/Wolfe Nanotech Report
Stock prices as of April 26, 2006
