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Keeping Buy on ImClone Systems


ImClone Systems (IMCL): Still 5 STARS (buy)

Analyst: Frank DiLorenzo

On Dec. 28, the U.S. Food and Drug Administration rejected Imclone's Erbitux (C225) application due to the need for additional documentation on refractory colorectal cancer patients and response rates. In the best-case scenario, the drug would be delayed by about six months with its launch coming by the end of 2002; in the worst case, additional studies will be needed. S&P expects ImClone to work expeditiously with partner Bristol-Myers toward a new FDA filing. S&P is cutting its forecast for 2002 to a loss per share of $0.44 , from $0.30 EPS, and is reducing its 2003 EPS estimate to $0.50 from $0.83. Assuming approval, S&P feels the speculative shares are undervalued on discounted cash flows.

Diebold (DBD): Reiterates 3 STARS (hold)

Analysts: Richard Stice, Scott Kessler

Diebold's purchase of publicly-traded Global Election Systems has been delayed until later in the 2002 first quarter to satisfy closing requirements. The transaction is expected to speed Diebold's entry into the U.S. electronic voting market with Global's touch-screen voting systems and related technologies. Global would also provide a healthy base of deployments, with customers in 850 government jurisdictions in North America. Although the cash and stock deal is valued at only $31.2 million, S&P sees it as good for Diebold. But, the shares, trading at 19 times S&P's 2002 estimate, merit a hold rating.


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