I have been doing DD on this bio company most of the afternoon. Need to do more. Too tired to type down everything I found.  I bought a "small" block and placed it in my SEP fund.  Not sure I want to do a trade yet.  Big run-up already.

 

 

Highlights:

(1)  have two selling drugs (enzymes) for genetic conditions where the human body can't produce what is needed for carbohydrate synthesis.  They are Naglazyme and Aldurzyme.  Together they are on track to sell about 135 million per year for these. Say 2008 will grow 25%.  One is in partnership with Genzyme and the other they own outright.

(2)  have the drug Kuvan that is under review by the FDA for the same scenario as above, but helps with amino protein synthesis.  Has orphan status in EU and US, fast track status and expedited review with FDA.  Decision by 11/25/07. 50,000 patients in the world-maybe half would respond to the treatment-cost of treatment $25,000-40,000-depends who ya read.  No competition at all in this space-current  patients with genetic defect have no recourse but terrible condition.

(3) BH4:  In development for PAD and CAD.  Phase II (multiple studies) spending big bucks on this (60 million/year).  Could be worth an ungodly amount of profit.  program 3-4 years from completion.

Have another drug in pre-clinical.

 

Other interesting stuff:  Insiders selling per pre-planned stock options. They making the money based on the option price. The ticker is been going up since March and accelerated since Labor day!  Heavy institutional ownership here.  Analysts positve-most list target as $30.00.  Some say Kuvan approval is baked in?  They put FDA approval of Kuvan at 80%-I ain't touching that prediction!

 

Latest quarter SEC filing states they have cash and equivalents of 587 million?  Yikes!  thats 2.5 years of development money even if you don't count the sales results!

 

It been accumulated.  I can't decide if a trade is in order?  Its at their 52 week high basically.  Cramer likes it?  Citi likes it?

 

I am leaning that I should not trade it unless unless it falls-back prior to the approval decision (may not?).  With this kind of steady run-up I perceive holders may take their profit upon approval and maybe that could be a good time to do a trade.

 

At any rate-its great science and a bio with sales, impending decision, and a future potential blockbuster.  Best of all they have cash! They earn cash!   Lots of cash for a company with less than 100 million shares!  Did I say cash! 

 

Want to DD this some more-too tired!

 

Kutz