Shares of Immunex Corp. rose $1 to $25 on Monday afterMerrill Lynch analyst Stuart Weisbrod said the stock isundervalued and should be one of four or five biotech stocksthat investors own.
As of Friday, the stock (NASDAQ:IMNX) was down 54 percentsince March 13, when it closed at $52.25, a drop of $420million in market value, Weisbrod said. Much of the drop hasbeen a reaction by investors to slow sales of Leukinegranulocyte macrophage colony stimulating factor. "But nobodyascribed that much value to Leukine in the first place,"Weisbrod said.
He puts a value of about $900 million on the Seattle company.About $400 million of that is based on projected sales of $55million this year of Leukine and products in-licensed fromBristol-Myers Squibb, plus $135 million in cash. The other $500million is based on products in the pipeline, particularlyPIXY321 and interleukin-1 receptor.
Based on Monday's close, the company's market cap is $370million. Immunex has 14.8 million shares outstanding. The 52-week high is $68.
The stock was one of few gainers on Monday, although theAMEX Biotechnology Index edged up 0.21 points to close at135.39. Regeneron Pharmaceuticals Inc. (NASDAQ:REGN) gained$1.13 to $12.50. Affymax N.V. (NASDAQ:AFMXF), Alpha 1Biomedical Inc. (NASDAQ:ALBM), Chiron Corp. (NASDAQ:CHIR)and Somatogen Inc. (NASDAQ:SMTG) each picked up $1.
While stocks are not about to bounce back imminently,Weisbrod said, "investors should start nibbling now to buildpartial positions." He also recommends purchase of Biogen Inc.shares (NASDAQ:BGEN). -- Karen Bernstein
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