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   Biotech / MedicalEBIO: Epoch Pharmaceuticals


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To: tuck who wrote (2)12/28/2000 2:40:50 PM
From: JR
   of 33
 
Tuck-Thanks for your response. Can you post specifics of Auerbach's revised #'s. Epoch's management stated that the acquisition would accelerate the rate of revenue growth (increased 2001 revs. significantly). Also said that they were staying with the projection of breakeven for 2002.
Like to see what Auerbach came away with.

Thanks

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To: JR who wrote (3)12/28/2000 2:50:14 PM
From: tuck
   of 33
 
JR,

biz.yahoo.com

Mr. Auerbach is apparently not publicly projecting out to '02, so both he and management can be right. The latest update does not mention a revision in the rating -- Strong Buy -- or the target -- $25. And who knows, the revisions could be a game. It sure has cheapened the stock. Wondering if I should be looking for suspicious volume spikes as a buy signal.

Cheers, Tuck

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To: tuck who wrote (2)12/28/2000 3:05:27 PM
From: Biomaven
   of 33
 
tuck,

EBIO went in my year-end tax-loss selling (not much of a loss for me, but I was ruthless).

Maybe the overall tax-loss selling is what's driving it at the moment. (If so, it might bounce in January).

Can't believe either the increased loss forecast or the pressure on the price is due to the small acquisition.

Peter

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To: Biomaven who wrote (5)12/28/2000 3:16:16 PM
From: tuck
   of 33
 
Peter,

Thanks. Maybe the downward revisions are part of a general segment revision downward on the discovery companies because of the perception that it's a crowded field. The take out price on Trega supports this view; it was pretty slight. Tempted to average Trickle in for more. Will have to dig some more to find out why the revision.

Cheers, Tuck

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To: tuck who wrote (6)12/28/2000 3:57:33 PM
From: JR
   of 33
 
Tuck, could you elaborate on the specifics of the Trega take-out price. Thanks.

What are the specific downward revisions in earnings for EBIO? Are they significant...that much so to value the company at $4-5/shar3? I think we're seeing people selling into the year-end taxloss season in addition to a market not willing to pay for early stage company without earnings. Sad thing is, the management went out of their way to position the acquisition as a positive indication about the probe business for 2001 and future.

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To: JR who wrote (7)12/28/2000 4:04:05 PM
From: tuck
   of 33
 
JR,

I concur that both bear market and year end pressures are adding to the drop. Re: TRGA: it actually got a substantial premium, but that's because it had drifted into penny stock status. Compare the take out price of $1.35/share to the 52 week range for an idea of how little anyone made on this take out. Implication; such companies are not in favor. To be fair, I am not sure how good a comp TRGA is for EBIO, but they're in the same forest, if not the same grove.

Message 15085356

Cheers, Tuck

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To: tuck who wrote (8)12/28/2000 4:36:39 PM
From: JR
   of 33
 
Tuck,
You make some good points. Only the highly visible, widely followed biotechs are acting well right now. EBIO is in neither group. Their niche is a good one, though, and they should become recognized for the company they keep...Applied Biosystems. Second deal was with Third Wave. Company is about to complete a third deal shortly.

They said the manufacturing acquisition would take 2001 revenues up from just under $4 million to $11 million with a loss of about 11 cents per share. Auerbach was showing a loss of 9 cents in 2001 on $3.8 million revenues.

The key is, how quickly they can accelerate demand for their probes. At some point between $11 to $20 million in volume, they will clearly go profitable if they control costs. The markets they serve are and will continue to grow very quickly (+30%/yr.) according to most forecasts.

$5 share purchases this week might look very good a few months out from now. Also, recent favorable mention about Epoch in NYTimes Biotech article where a fund manager was buying it recently as it was at attractive pricing below $8 or so.

Appreciate any additional information you can provide. Thanks

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To: tuck who wrote (2)1/2/2001 2:32:24 PM
From: JR
   of 33
 
Tuck-still interested in Auerbach's estimate of EBIO's 2001 losses, which you said he increased "dramatically". In his earlier report, he had a 9 cents loss per share on $3.8 million in revenues. EBIO has increased the revenue estimate to $11 million for 2001. So, where did he take the earnings loss to and based on what?

Thanks

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To: JR who wrote (10)1/2/2001 2:57:36 PM
From: tuck
   of 33
 
OK,

If you followed the link in post #4, you would see the revision occurred roughly a month ago. That's the time frame I know of. The one analyst has to be Auerbach. Look in the "consensus EPS trend" frame (center left):

biz.yahoo.com

Haven't seen an actual report, so I don't know what he based it on. I concur with Peter that the acquisition should not be that big a hit. Whatever, the change from a loss of four cents to a loss of eleven counts as dramatic, in my book. Apologies if this is old stuff to you, but hopefully I've made clearer what I was talking about.

Of course, it wouldn't be the first time Yahoo's data was slightly off. If you can share better data, please do.

Cheers, Tuck

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To: tuck who wrote (11)1/2/2001 8:03:19 PM
From: JR
   of 33
 
Tuck--Thanks for identifying your souce (Yahoo).

The FSVK (Auerbach) report issued Aug. 11, 2000 projects negative earnings 9 cents/share for 2001. I don't know where Yahoo got 4 cents. An increase from 9 cents to 11 cents is significant, but nothing like an increase from 4 to 11.

Auerbach estimates that when total revenues hit $14 - 22 million annually, EBIO can earn from 25 cents to 52 cents per share. Given that management has revised upward the 2000 revenue projection to $11 million during the November cc, they are getting close to profitability. Their plan to market and sell a line of probes could speed this process up, especially if their reagents, etc. are as enabling to a variety of users as Auerbach explained in his report.

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