Why CombiMatrix Is Going Gaga Over Nano

By Gene G. Marcial

Luring New Investors
Nanotech is the Street's latest buzzword. Technology Review, put out by Massachusetts Institute of Technology, calls it the key materials technology for this century, capable of altering the performance of drugs, chemicals, and computers. So investors are chasing nano stocks. Enter CombiMatrix (CBMX ) (CBMX), whose stock climbed from 3 in mid-December to 5.39 on Jan. 14.

First featured in this column on Feb. 3, 2003, at 2.90, CombiMatrix makes micro-biochips that perform DNA diagnostics and detect hazardous chemicals. In December, the U.S. Army inked a pact with CombiMatrix to develop microchips for detecting hazardous biotech agents. CombiMatrix' partner, Nanomaterials Discovery, has just agreed to use CombiMatrix' biochips to develop fuel cells, rechargeable lithium batteries, and phosphors for flat-panel displays.

Jonathan Aschoff of Brean Murray says Nanomaterials Discovery has a patent on using its own technology and CombiMatrix' biochips to discover new nanomaterials. Aschoff, who rates CombiMatrix a strong buy, says its microchips shorten the discovery process. Aschoff has a 12-month target of 8, and expects the company to turn profitable this year, with earnings of 45 cents a share.

Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

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