ABGX ASTX ASML BKST CVTY ISIL MRK NETA OIIM PRSF PKSI PPRO RADS RDRT TNOX SAN FRANCISCO, Oct. 3 /PRNewswire/ -- The following is being issued by Robertson Stephens, a member of the National Association of Securities Dealers, CRD number 41271: Rating Changes Equifax Inc. (NYSE: EFX) ($26.69) F2001 EPS: $1.95 from $2.00 Market Performer from Long-Term Attractive Andrew Jeffrey, eProcessing/ePayments "We are lowering our rating on Equifax and reducing our 2001 earnings-per- share and revenue estimates," said Jeffrey. "The company announced yesterday its intention to separate the company along its internal business lines, spinning off its Payment Services operations from its core Information Services franchise. While it is our view that the company's explanation for proposing the spin-off is somewhat reasonable, we fail to see how this action will bolster shareholder value. Our new estimates and rating reflect this conviction." Estimate Changes Dura Pharmaceuticals (Nasdaq: DURA) ($38.25) 2001 EPS: $0.83 from $0.91 Long-Term Attractive Robert Hazlett, Large Capitalization/Specialty Pharmaceuticals "Yesterday, Dura announced that it signed an exclusive U.S. distribution agreement with Glaxo Wellcome for its dermatology product line," said Hazlett. "Under the terms of the agreement, Glaxo will be responsible for manufacture and supply of the products, and Dura will make undisclosed payments in 2001 and 2002 to Glaxo. At the end of 2002, Dura will be able to exercise an option to purchase the products outright from Glaxo. Dura indicated that it intends to deploy a 60-person specialty dermatology sales force by year-end. We believe that this focused promotional effort for these drugs, particularly given the relatively small number of physicians responsible for the majority of dermatology prescriptions, as well as the high degree of brand loyalty within the dermatology area, should help turn this dermatology business around. In particular, we believe that Cutivate, a low-dose topical steroid, may have annual peak sales potential of $50 million. The company indicated that it expects the new products to add roughly $13 million in sales in the fourth quarter, and $65 million in 2001. We continue to rate Dura shares Long- Term Attractive." MedImmune, Inc. (Nasdaq: MEDI) ($56.75) 2000 EPS: $0.65 from $0.66 2001 EPS: $0.93 from $0.97 Strong Buy Jay Silverman, Biopharmaceuticals "We are revising our sales estimates for Synagis to reflect expected weakness in the European market," said Silverman. "Our newly reduced European sales estimates for 2000 and 2001 are $68.7 million and $123.1 million, down from $101.6 million and $184.4 million, respectively. We reaffirm our increasing confidence in Synagis sales growth in the U.S. with upward adjustments. Our newly raised U.S. sales estimates for 2000 and 2001 are $412.4 million and $522.0 million, up from $409.4 million and $500.0 million, respectively. After yesterday's sell-off, we believe the weak foreign rollout of Synagis is now discounted into MedImmune shares, while the U.S. strength is not. Furthermore, with more than 10 compounds/vaccines in various stages of development, in our view, MEDI's growth rate will be sustained for the long- term. We reiterate our Strong Buy Rating." Comments Abgenix, Inc. (Nasdaq: ABGX) ($72.13) Strong Buy Jay Silverman, Biopharmaceuticals "Abgenix announced that Pfizer filed an IND application with the FDA for a XenoMouse-produced monoclonal antibody to be investigated for cancer treatment," said Silverman. "As with other similar XenoMouse deals, Pfizer is fully responsible for product development, manufacturing and marketing. Abgenix will receive license fees, milestone payments and sales royalties from a marketed product. This long-awaited landmark event marks the first IND to be filed from a XenoMouse partnership. Pfizer's antibody will be the third fully human XenoMouse antibody to enter human trials after Abgenix's own ABX- IL8 and ABX-EGF. Many more INDs are anticipated over the next few years from Abgenix's 20 or so other XenoMouse partnerships. With XenoMouse deals beginning to generate drug candidates and its own proprietary drug pipeline progressing, Abgenix again appears to be on its way to becoming a leader in antibodies. We reiterate our Strong Buy rating." Applied Science and Technology, Inc. (Nasdaq: ASTX) ($17.25) Long-Term Attractive Sue Billat, Semiconductor Equipment/Foundries "MKS Instruments, Inc., announced this morning that it has entered into a definitive merger agreement to acquire Applied Science and Technology, Inc. (ASTeX) in a pooling of interest transaction," said Billat. "Under the terms of the agreement, each outstanding share of ASTeX common stock will be exchanged for 0.7669 newly issued shares of common stock of MKS. Based on MKSI's October 2 closing price, the transaction is valued at about $253 million. The transaction is expected to close in the fourth quarter of 2000, and is expected to be slightly accretive to earnings-per-share in calendar 2001. We believe the transaction brings MKS a complementary product line, and ASTeX a more extensive global reach. In our view, the combined entity should be able to better leverage its global infrastructure and JIT manufacturing. We rate the shares of ASTX Long-Term Attractive." ASM Lithography Holding N.V. (Nasdaq: ASML) ($29.88) Buy Sue Billat, Semiconductor Equipment/Foundries "ASM Lithography announced its intention to buy Silicon Valley Group in a stock transaction expected to close in the first half of 2001," said Billat. "The real significance of the merger, we believe, is in speeding the development of next generation lithography equipment given SVG's technological leadership in 157 nm lithography. We believe the merger allows the combined companies to save between $500 million to $1 billion in R&D costs in bringing such tools to the market. We believe the merger is accretive to ASML estimates and we plan to revise the numbers once the deal closes in the first half of 2001. For now, we are maintaining our estimates and reiterating a Buy on ASML." Brookstone, Inc. (Nasdaq: BKST) ($14.00) Buy Alexandra DalPan, Multichannel Consumer Hardgoods "Brookstone's third quarter sales trends continue to improve sequentially, in our view, as new product flows sell well in stores," said DalPan. "We are modestly raising our third and fourth quarter sales projections, while our earnings estimates for the second half of 2000 remain unchanged. With the resumption of the top-line momentum, the stock's severe discount to our fiscal 2000 and 2001 earnings-per-share projections is overdone, in our opinion. We recommend purchase of the shares for patient small cap investors." Coventry Health Care Inc. (Nasdaq: CVTY) ($15.13) Long-Term Attractive Sheryl Skolnick, eHealth/Health Care Services "Coventry announced today that it has closed the WellPath Community Healthplans acquisition, a managed care subsidiary of Duke University Health System," said Skolnick. "In addition to acquiring the WellPath members, CVTY has entered into a contract provider agreement with Duke to be a third-party administrator for Duke's employee managed care plan. The transaction is expected to be neutral to 2000 estimates and accretive to 2001. Management indicated the current MLR trend will not be affected by the acquisition as the State Group Account has a lower MLR and the Large Group Accounts have a higher MLR. Our 2000 estimates reflect this transaction. We are developing our 2001 estimates at this time. We maintain our Long-Term Attractive rating on the stock." Intersil Holding Corporation (Nasdaq: ISIL) ($41.61) Buy Arun Veerappan, Communication Components/Semiconductor Devices "We believe that business fundamentals at Intersil remain strong and that our estimates for the company remain in good shape," said Veerappan. "We believe that our estimates for the September quarter are in good shape driven primarily by its analog and wireless business. We believe the wireless business could be doing particularly well, driven by strong demand for the company's 802.11b PRISM chipsets for the WLAN market. In addition, we believe that Intersil's recently announced CommLink up-converter product for 3G basestations demonstrates the company's diversification of its wireless business and highlights its growing role as a wireless infrastructure player. Overall, we believe Intersil represents a compelling combination as an analog and communications IC company that has positioned itself to be a clear beneficiary of today's growth in the semiconductor markets. As such, we continue to rate Intersil stock as a Buy." Merck & Co., Inc. (NYSE: MRK) ($74.00) Market Performer Robert Hazlett, Large Capitalization/Specialty Pharmaceuticals Yesterday, Merck announced FDA approval of Fosamax (alendronate) in men," said Hazlett. "This approval was largely expected. Fosamax is already approved for treatment and prevention of osteoporosis in women. Merck estimates two million men in the U.S. may have osteoporosis. Though Fosamax is the first drug approved for this condition in males, we do not expect a significant pickup in scripts above current trends as a result. Merck's once- weekly Fosamax is currently pending at the FDA, and we expect an official decision by year-end, or early 2001. Though this version will be a much needed improvement, it remains to be seen if this new version will carry the same important hip fracture reduction claim of the once-a-day version." Network Associates (Nasdaq: NETA) ($23.00) Buy Dane Lewis, Network Systems Storage and Software "NETA announced an OEM partnership with Nokia this morning," said Lewis. "Nokia has developed an appliance for NETA's WebShield antivirus product by bundling NETA's software. NETA plans to continue to market its E-ppliance product in its existing distribution channels and to target verticals such as the government and financial services. We note that only the low-end E- ppliance 100 will compete with Nokia's antivirus-only appliance. We believe this is an endorsement of NETA's technology and will help NETA penetrate new markets. Being chosen by Nokia not only endorses NETA's technology, but also brings NETA into new markets such as managed service providers and Nokia's channel partners, in our view. We believe this will provide an incremental revenue opportunity for NETA. NETA plans to take advantage of Nokia's large distribution channel. Valuation is compelling, in our opinion. At 3.2 times fiscal 2001 sales, NETA is trading at a substantial discount to it comps. Over the next several quarters, as the company continues to tightly manage its balance sheet and receivables, and as the company continues to experience growth across all its product lines, we expect increased credibility with investors will translate to a valuation multiple at least on par with its competitors. We reiterate our Buy opinion." O2Micro International Limited (Nasdaq: OIIM) ($13.00) Buy Arun Veerappan, Communication Components/Semiconductor Devices "As we have approached the end of the company's first quarter as a public entity, we believe our estimates for O2Micro for the September quarter remain in good shape," said Veerappan. "We expect O2Micro to turn in a strong quarter with sequential growth in both its sales and earnings and with the potential for some upside possibility to our estimates as well. In regard to the outlook beyond the September quarter, we believe the company is well positioned to grow revenues steadily sequentially over the next couple of quarters and that its design-win momentum could be accelerating." Portal Software, Inc. (Nasdaq: PRSF) ($33.94) Buy Marianne Wolk, Wireless Data/eCommunications "Portal has expanded its relationship with Worldcom's UUNET, signing a contract to provide the Infranet billing platform to UUNET's North American sites," said Wolk. "We believe this is an important strategic move as the deal should significantly increase the number of UUNET subscribers supported. In addition, we believe the expanded relationship with UUNET represents an excellent strategic win for Portal among large-scale carriers, providing further evidence of its ability to scale." Primus Knowledge Solutions, Inc. (Nasdaq: PKSI) ($10.88) Buy Alex Baluta, Internet & eCommerce Applications "Primus announced after market close Monday that it anticipates revenue and earnings in the third quarter to be below Street expectations," said Baluta. "The company suggested that the reason for the shortfall was due to the delay in follow-on orders from existing customers and a slowdown in closing transactions internationally in Europe and Japan. We are lowering our third quarter estimates to revenues of $10.1 million and a loss of $(0.37) from $14.4 and $(0.12), respectively. We are also reducing our fourth quarter estimates to $13 million and a loss of $(0.22) from our prior revenue estimate of $16.5 million and $(0.06), respectively. We believe many of the smaller eCRM companies are experiencing a difficult third quarter, because customer buying decisions are becoming strategic as opposed to reactionary, and are creating a longer sales cycle. We further believe that the eCRM space, currently full of point solutions, will likely undergo a phase of consolidation as some vendors make efforts to offer comprehensive eCRM suites. In our view, Primus offers a strong stand-alone knowledge base and eService solution, one that would also be a strong component piece of a broader eCRM suite. On a positive note, the company completed its short search for a CFO with the addition of Ronald Stevens. We believe the CFO transition over recent months has had a minimal impact on the operations of the company, and that Stevens' experience in this role at OnHealth Network Co. will be positive for the company." PurchasePro.com, Inc. (Nasdaq: PPRO) ($80.50) Buy Eric Upin, Business-to-Business eCommerce "We expect another very strong quarter from PurchasePro when it reports fiscal third quarter results on October 19, with the potential for significant upside on the top and bottom line," said Upin. "We believe the September quarter is in excellent shape and that the company has the potential to significantly exceed our published estimates, with a revenue number in the high teens and possibly as high as the low 20s. In addition, we think PurchasePro is likely to beat our operating earnings-per-share estimate significantly, in part, because only a portion of the sales and marketing expense we modeled in connection with the AOL deal is likely to hit this quarter. Yesterday, PurchasePro announced a strategic alliance with Gateway, where the companies plan to jointly develop three global marketplaces, allowing Gateway clients to interact with the over 30,000 businesses and 200 private-label marketplaces on the PurchasePro network. We view the Gateway alliance as well as the partnership struck with Computer Associates in September as powerful signs of an increasingly focused and effective indirect channel strategy. Overall, the company has accomplished a great deal in the last 12 months, characterized by very strong financial metrics, sharper strategic focus, and a deepening of several key partnerships. PurchasePro continues to show signs of gaining market acceptance for their mid-market solutions and developing key channel partnerships. Yet, with the stock's recent run-up and with a narrowing of the valuation gap between PurchasePro and other signature B2B names in recent weeks, we believe some of the near- term upside may already be in the stock. With expected upside this quarter and likely upward revisions of our model to come, however, we remain positive on the company's outlook and growth prospects. As a result, we continue to rate the shares of PPRO a Buy." Radiant Systems, Inc. (Nasdaq: RADS) ($25.38) Buy Andrew Jeffrey, eProcessing/ePayment "Radiant Systems announced yesterday a partnership with Tricon Global Restaurants, Inc. to implement Radiant's hosted management information system, WAVE," said Jeffrey. "We believe this agreement represents approximately $50 million in life-of-contract revenues with the potential to contribute much more as Radiant penetrates Tricon's franchisees. We reiterate our Buy rating on RADS and believe the stock should trade toward $30 in the near term and at least to $40 over the next 12 months. We continue to recommend purchase of RADS and believe that the stock's valuation is very compelling, today." Read-Rite Corporation (Nasdaq: RDRT) ($10.81) Long-Term Attractive Dane Lewis, Network Systems Storage and Software "Read-Rite announced that it plans to reduce its debt position by approximately $200 million by exercising its automatic conversion right for its 10 percent convertible subordinated notes due September, 2004," said Lewis. "We believe this move is a significant positive for RDRT, giving the company a healthier balance sheet by reducing debt. At a strike price of $4.51, the notes convert to approximately 43 million shares of common stock, which will be added to RDRT's current 57 million shares outstanding. This should have a dilutive effect on earnings-per-share for profitable quarters. Based on the company's recent success with the 20GB product iteration, we believe RDRT may be profitable in the December 2000 quarter. However, based on the large short position, which we expect to increase as the conversion date nears, we believe the dilution will be largely priced into the stock. RDRT's entrance into the Optical Filter business looks promising. RDRT has a dedicated team of people looking into the possibility of working on dense wave division multiplexing (DWDM) for the fiber optic component market. We believe RDRT will outline its business strategy for this market in the next few months and we foresee product prototypes being available in the first half of calendar 2001." Tanox, Inc. (Nasdaq: TNOX) ($35.13) Buy Jay Silverman, Biopharmaceuticals "Xolair (E25), Tanox's lead compound, is near commercialization with its BLA accepted for FDA review in September," said Silverman. "Xolair, an anti- IgE monoclonal antibody, is a novel drug for treating and preventing allergic rhinitis and allergic asthma. Partnered with Genentech and Novartis, Xolair produced impressive results from completed Phase III clinical trials. FDA approval may be achieved as early as the first quarter of 2001. In our opinion, Xolair has blockbuster potential given its efficacy and substantial market size. We estimate that global sales will begin in 2001 at $101 million, break $1 billion in 2003 and approach $2 billion by 2005. Enrollment in a Phase IIIb Xolair study should resume in a few weeks. Enrollment for this trial was placed on temporary hold last month. Two monkeys died in a preclinical study on E26, a second generation anti-IgE antibody, after receiving doses up to 27 times the human dose. In our view, this event should not affect the FDA's review of Xolair. We reiterate our Buy rating on the shares and our 12-month price target of $46 per share." Unless otherwise noted, prices are as of Monday, October 2, 2000 Robertson Stephens maintains a market in the shares of Dura Pharmaceuticals, MedImmune, Abgenix, Applied Science and Technology, ASM Lithography, Brookstone, Coventry Health Care, Intersil, Network Associates, O2Micro, Portal Software, Primus Knowledge Solutions, PurchasePro.com, Radiant Systems, Read-Rite Corp., and Tanox and has been a managing or comanaging underwriter for or has privately placed securities of Abgenix, Applied Science and Technology, Intersil, O2Micro, Portal Software, Primus Knowledge Solutions, PurchasePro.com, and Read-Rite Corp.,within the past three years. Robertson Stephens, Inc. and its international affiliates ("Robertson Stephens") is the leading full-service investment bank focused exclusively on growth companies. The firm provides a comprehensive set of investment banking products and services, including equity underwriting, sales & trading, research, M&A advisory, convertible securities, private capital, equity derivatives, and corporate and executive services. Robertson Stephens completed 146 deals in the United States and Europe in the first half of 2000 valued at $48.1 billion in aggregate market value including 70 IPOs, 56 follow-ons and 20 convertible transactions. The firm also completed 47 private capital deals and advised on 43 M&A deals in the first half of this year. The firm's more than 40 senior equity research analysts cover more than 750 companies. Robertson Stephens, Inc. is a member of the NASD and all major exchanges. Robertson Stephens has more than 1,500 employees worldwide with offices in San Francisco, Boston, New York, Palo Alto, Chicago, Atlanta, London, Munich and Tel Aviv. Robertson Stephens, Inc. 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Copyright (C) 2000 Robertson Stephens. SOURCE Robertson Stephens -0- 10/03/2000 /CONTACT: Elizabeth Denton, 212-407-0470; for Robertson Stephens/ /Web site: http://www.rsco.com/ (FBF EFX DURA MEDI ABGX ASTX ASML BKST CVTY ISIL MRK NETA OIIM PRSF PKSI) CO: Robertson Stephens; Equifax Inc.; Dura Pharmaceuticals; MedImmune, Inc.; Abgenix, Inc.; Applied Science and Technology, Inc.; ASM Lithography Holding N.V.; Brookstone, Inc.; Coventry Health Care Inc.; Intersil Holding Corporation; Merck & Co., Inc.; Network Associates; O2Micro International Limited; Portal Software, Inc.; Primus Knowledge Solutions, Inc.; PurchasePro.com, Inc.; Radiant Systems, Inc.; Read-Rite Corporation Tanox, Inc. ST: California IN: FIN MLM SU: RTG -0- Oct/03/2000 16:01 GMT EOS (PRN) Oct/03/2000 12:01 85 â -0- (PRN) Oct/03/2000 16:16 GMT
Robertson Stephens Daily Growth Stock Update on EFX DURA MEDI
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