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Wednesday, February 10, 1999

"The P/E ratio doesn't mean anything when there's no E." -- Raymond Rose

Latest Market Numbers

Setback for EntreMed

In a huge blow to Rockville, Maryland-based biotechnology firm EntreMed (Nasdaq: ENMD), drug and personal care products maker Bristol-Myers Squibb (NYSE: BMY) late yesterday announced it will relinquish responsibility for all future development of EntreMed's angiostatin protein as a potential cancer therapy. Bluntly stated, the protein "does not meet [Bristol-Myers'] criteria for molecules that advance to clinical trials," so the company has decided to direct its resources elsewhere in its oncology pipeline. However, it has the option to reassume development and marketing rights for angiostatin "once clinical proof of principal has been demonstrated."

Bristol-Myers' decision represents a strong no-confidence vote for EntreMed's work to develop a cancer drug using angiostatin, a natural protein, based on the idea of blocking blood vessel growth to starve tumors. EntreMed shares, which closed at $24 1/2 yesterday, more than quadrupled to $51 13/16 from $12 1/16 on May 4 of last year -- after hitting an intraday high of $85 -- following a front-page article in The New York Times that quoted the director of the National Cancer Institute as saying that EntreMed's angiostatin and endostatin drugs are "the single most exciting thing on the horizon" for the treatment of cancer.

But as EntreMed CEO John Holaday told the Fool in a StockTalk interview last year, although its drugs have shown promising results in mice, "there's a long distance from mouse to man." In fact, he estimated that it would probably be three to five years before the drugs can be fully tested, approved by the Food and Drug Administration, and made available for general consumption. Still, even though EntreMed plans to continue with its research, losing Bristol-Myers as a partner is a huge setback. Not only is Bristol-Myers far more well-funded, it is, in fact, the world's largest cancer drug company. It was also one of the key factors Holaday cited in the interview as something that set EntreMed apart from its competitors.

News to Go

Monsanto Co.'s (NYSE: MTC) arthritis-pain drug Celebrex is selling rapidly, generating prescriptions in its third week on the market that are more than six times those of the fast-selling cholesterol drug Lipitor at a comparable stage, The Wall Street Journal reported. That makes it the second fastest selling new drug in recent years, behind Pfizer's (NYSE: PFE) popular impotence drug Viagra.

Turf and forage seed company AgriBioTech (Nasdaq: ABTX) CEO Johnny Thomas said he was forced to sell half of his stake in the company he helped found after lenders demanded he pay back money he borrowed to fund the company's growth by exercising options and warrants to buy stock. Thomas sold 901,707 shares to the State of Wisconsin Investment Board for $5.25 a share, a 20% discount to yesterday's closing price of $6 9/16 ($6.5625). Another unnamed AgriBioTech manager sold 443,740 shares.

Latest Earnings Announcements:

Amresco (Nasdaq: AMMB) -- Q4 EPS: loss of $2.27 vs. profit of $0.53 last year; estimate: loss of $2.00
Bestfoods (NYSE: BFO) -- Q4 EPS: $0.64 vs. $0.56 last year; estimate: $0.64
Cigna Corp. (NYSE: CI) -- Q4 EPS: $1.04 (before gain) vs. $0.81 last year; estimate: $1.00
General Instrument (NYSE: GIC) -- Q4 EPS: $0.26 vs. $0.10 last year; estimate: $0.23
Jones Apparel Group (NYSE: JNY) -- Q4 EPS: $0.30 vs. $0.22 last year; estimate: $0.27
MedPartners (NYSE: MDM) -- Q4 EPS: profit of $0.06 vs. loss of $0.01 last year; estimate: profit of $0.07
Network Solutions (Nasdaq: NSOL) -- Q4 EPS: $0.22 vs. $0.11 last year; estimate: $0.20
Pharmacia & Upjohn (NYSE: PNU) -- Q4 EPS: $0.45 vs. $0.35 last year; estimate: $0.45
Provident Cos. (NYSE: PVT) -- Q4 EPS: $0.60 vs. $0.52 last year; estimate: $0.62
Rainforest Cafe (Nasdaq: RAIN) -- Q4 EPS: $0.11 vs. $0.15 last year; estimate: $0.12
Unum Corp. (NYSE: UNM) -- Q4 EPS: $0.71 vs. $0.64 last year; estimate: $0.73
Verio Inc. (Nasdaq: VRIO) -- Q4 EPS: loss of $1.02 vs. loss of $1.03 last year; estimate: loss of $1.08

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Yi-Hsin Chang (TMF Puck), Writer
Jennifer Silber (TMF Amused), Editor