Emisphere Technologies is a biotech play that's not for the faint of heart. Its shares rocketed in early 1991--from 10 a share to 36 by early 1992. Then, like a bungee jumper, the stock plunged to 12 in early 1993.

Now at 10 7/8, a few biotech daredevils have been buying in. Why? Some money pros insist that Sandoz, a Swiss chemical and drug giant, will soon make an "important" announcement about Emisphere Technologies' oral-delivery system for complex drugs. And Emisphere is said to be close to signing a new licensing pact with another major drug company. Emisphere is developing a technology that allows drugs to be administered orally instead of injected into the bloodstream.

"Encouraging results from several animal and human studies have already led to seven licensing agreements with major pharmaceutical companies," including Upjohn, Schering-Plough, and Sandoz, notes Evan Sturza, editor of Sturza's Medical Investment Letter, who is high on Emisphere. The technology involves encapsulating a drug in tiny spheres composed of proteinoids, chemically linked amino acids. The nontoxic proteinoids go through the stomach and into the small intestine, where the encapsulated drug is released.

'HOLY GRAIL.' The talk is that Sandoz will soon start its own human clinical testing for Calcitorin, a drug used for treating osteoporosis, using Emisphere's oral-delivery system. "Such an announcement by Sandoz would be a most important event for Emisphere because it will validate the efficacy of its delivery technology," says one New York money manager. Calcitorin generates annual sales of nearly $1 billion as an injectable drug. So if Sandoz is able to make an oral version of the drug, it could double sales, this pro says. Sandoz spokesman Larry Bauer says: "It's premature to speculate on the company's agreement" with Emisphere.

Emisphere is also discussing with several drug companies a contract to develop the oral delivery of heparin, an anticoagulant drug and human-growth hormone. "Oral delivery of drugs is the Holy Grail of biotechnology," says Dr. Brandon Fradd, an analyst at Montgomery Securities. "We expect the first products from Sandoz and Schering-Plough and heparin to enter formal human trials starting this year and be launched in the commercial market in 1996-97," says Dr. Fradd.

So he sees Emisphere's stock doubling as the company signs up additional partners and starts more trials over the next 12 months. He figures Emisphere will start making money in 1997--about $1 a share, rising to $2 in 1998. Fradd's two-year target for the stock: 60.

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