Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Businessweek Archives

Ivax May Keep Foiling The Shorts

Inside Wall Street


So far, short-sellers have been disappointed in Ivax (IVX). The stock, which has one of the largest short interest on the American Stock Exchange, has been on the rise, oddly enough--climbing to 25 from 17 in late December. And they are likely to continue to be frustrated. What's the scoop? Ivax, the nation's largest generic-drugmaker, may be merger-bound, whisper some of the pros. They are convinced that BASF, the German chemical-and-pharmaceutical giant, will soon acquire 20% to 25% of Ivax. That, says one New York money manager who has been accumulating shares, could ultimately lead to a merger. In such a deal, Ivax could be worth 50 a share, he estimates.

Ivax Chairman Philip Frost, who was scheduled to meet with BASF top brass in Germany in early May, would not confirm or deny any such speculation. He noted, however, that Ivax and BASF had formed a joint venture in late March to sell generic drugs in Europe.

The joint venture, Knoll Norton, will initially operate in Germany. (BASF subsidiary Knoll is a major pharmaceutical player in Europe, while Ivax' Norton Healthcare is No.1 in generic drugs in Britain.) BASF couldn't be reached for comment.

Some analysts believe that Ivax is undervalued just in terms of its existing business. David Saks of Gruntal & Co. says the stock could well rise to the low 30s this year and 42 next year, even without a merger. He notes that the Food & Drug Administration recently approved Cefaclor--the seventh FDA approval for Ivax so far this year and easily the most significant. Cefaclor is the generic equivalent of Eli Lilly's Ceclor, an antibiotic used to treat certain respiratory, urinary, skin, and ear infections.

Cefaclor will be "a blockbuster for Ivax," says Saks, who estimates it could add sales of $50 million its first year. Lilly's Ceclor generated worldwide sales of $812 million in 1994.

Cefaclor sales will start showing up in Ivax' second-quarter results, figures Saks. He notes that Ivax has 35 generics and several proprietary products still in its pipeline. Ivax also makes and sells personal-care and diagnostic products.

Another bullish factor: Frost's undying romance with Ivax stock. He has accumulated 13 million shares--12% of the outstanding stock. Frost isn't fazed by the short-sellers' interest. "I like it--because they will have to scramble and cover [their short positions] when more good news rolls in." BY GENE G. MARCIAL

blog comments powered by Disqus