Rob's Lobs

[New-born baby]

I've had enough correction for awhile. You can stop now. Please.

[Rob]

Correction—More to Come? Or Has It Run Its Course?

In case you weren't keeping track, I just thought I'd let you know that yesterday the Dow Jones Industrial Average came to within 20 points of a 10% correction.

[billyjoe]

Can I go with you? I'll bring the Spaghetti-O's.

Rob,
My car has an orange interior so it'll be no problem.

-------------billyjoe

[Rob]

Me and Mrs.billyjoe are goin' to Omaha to see Warren speak next summer.

Can I go with you? I'll bring the Spaghetti-O's.

[billyjoe]

Rob,
Sold the last of my GOOG at 718 and 716 and bought BRKB. Me and Mrs.billyjoe are goin' to Omaha to see Warren speak next summer.

-------------billyjoe

[Rob]

Price 7/31/82--day me & Mrs. billyjoe got married----$475

-----7/30/92-----------------------$9500--only a nut would buy this high
-----7/31/02-----------------------$70,100----take profits don't be a pig
-----7/31/07-----------------------$109,650----what can be said

Interesting synopsis, Billy.

Do I think you should sell your remaining GOOG? The correct answer is that it matters not one whit what I think. I can tell you, however, that I'm still holding 100% for the time being.

p.s. My AXS has been acting nicely lately.

[billyjoe]

That was a mere four weeks ago. Today GOOG peaked at 699.91.

My brain is saying sell. My gut isn't so sure. I could sell roughly 60% of my position and get my whole investment back. I'll have to ponder that.

Rob,
I'll play the devil's advocate as you ponder selling at 700. What if GOOG is this generation's Berkshire Hathaway? Sure, they seem to be acquiring like minded companies and will eventually get in to trouble with the FTC , but not during this administration's run. By that time they can start spending on unrelated businesses ala BRKA. Or, take a cheaper route, sell all your GOOG and put it in MSFT which may be a more likely candidate to become the next Berkshire. They've got scads of cash,don't want to risk it on a speculative technology war with every upstart competitor, and Gates is a great friend and admirer of Buffett . You know they've discussed the possibilities.

Do you think I should sell my remaining GOOG?

-----------billyjoe


Just did some further checking on BRKA

Price 7/31/82--day me & Mrs. billyjoe got married----$475

-----7/30/92-----------------------$9500--only a nut would buy this high
-----7/31/02-----------------------$70,100----take profits don't be a pig
-----7/31/07-----------------------$109,650----what can be said

[Rob]

Another 100 Points in Four Weeks

Holy cow! Is today the day that GOOG will hit the big SIX-O-O ???

That was a mere four weeks ago. Today GOOG peaked at 699.91.

My brain is saying sell. My gut isn't so sure. I could sell roughly 60% of my position and get my whole investment back. I'll have to ponder that.

[Rob]

IMCL Targets Raised by Two Analysts

Rodman & Renshaw

ImClone reported 3Q07 diluted EPS of ($0.01), Erbitux numbers ahead of expectations. The wider than expected EPS loss was due to a one time litigation settlement expense of $50mm in 3Q07 resulting from the settlement agreement with Massachusetts Institute of Technology (MIT) and Repligen Corporation (RGEN, Market Outperform). Excluding the one-time charge, IMCL would actually have exceeded our EPS estimate of $0.29. The company posted strong US Erbitux sales of $184.5MM, well above both our and Street's estimate of $174.7mm and $175.5mm. Yesterday, Merck KGa (MKGAF.PK, Not Rated) also reported a strong ex-US Erbitux sales of $166.9mm compared to our and the Street's estimates of $164.5mm and $149.0mm, respectively. Total expenses of $160.7mm were higher than our $115.8mm estimate due to the litigation charge. See Figure 1 for further details into the estimates and actual numbers.

US markets are seeing growth in CRC, SCCHN, while growth continues in ex-US markets. According to Oncology Inc., we saw strong M/M from July to August in CRC (18%) as well as Head and Neck cancer (11%). It is important to note that the increase in sales this quarter is in part reflective of a change in the Erbitux distribution model that resulted in wholesaler inventory buildup during the quarter estimated to be approximately $9mm. To that end, ImClone also implemented an expanded sales force effort beginning July 1, and we have seen a robust uptick in patient numbers since it began see Figure 2.

Data, approval of sBLA for Erbitux to drive growth into 2008. ImClone should submit supplemental BLAs for early line use of Erbitux for CRC and Head and Neck cancers during 2008. Additionally, future growth could be driven by the large positive Erbitux data set from the CRYSTAL, EPIC, FLEX and EXTREME trials. However, until the label is revised or compendia listing is granted, we do not anticipate realizing the commercial impact from these data, which will enable reimbursement and allow for active sales force promotion. Nonetheless, we are modestly increasing our Erbitux revenue forecasts. The company will also be proceeding in early 2008 into pivotal trials with IMC 1121b in metastatic breast cancer and IMC A12 into multiple tumor types, including mCRC in combination with Erbitux.

We reiterate our Market Outperform raise our 12-month Price target from $55 to $62. We reach our target price of $62 by multiplying the profitable biotechs' median forward (FY08E) P/E of 24 by a ratio of IMCL's 3-year EPS CAGR of 38.1% to the profitable biotechs' median forward CAGR of 19.6%, then by our FY08E EPS of $1.54, discounted back to YE08 by 15%





Goldman Sachs

Imclone Systems (IMCL): Erbitux sales solid. Raised price target to $50

What's changed
Imclone reported 3Q07 EPS of $0.37 (incl. ESOs), $0.12 above our estimates of $0.25. US sales of Erbitux were $185 mn (+14% qoq; 6% yoy), $15 mn and $6 mn above our and consensus estimates, respectively, due to a $9 mn inventory buildup. Ex-US Erbitux sales were $167 mn (+6% qoq; +60% yoy), $7 mn above our forecast.

Implications
We believe Imclone is well-positioned to maximize the commercial potential for Erbitux, with a new CEO in place, potential new indications for Erbitux in 1st-line therapies of colorectal cancer (CRC), head & neck cancer, and non-small cell lung cancer (NSCLC), sales force expansion, and renewed commitment from Bristol-Myers Squibb (BMS). We expect Phase 3 FLEX results on Erbitux in 1st-line NSCLC by mid 2008 with $0.5bn sales potential.

The pipeline should gain visibility in 2008 with 5 antibodies in Phase 2 trials. We have increased our EPS (incl. ESO) by $0.01, $0.14, and $0.03 to $1.20, $1.33 and $1.41 in 2007-2009, respectively. We have raised our EPS (ex ESO) by $0.02, $0.15, and $0.04 to $1.25, $1.39 and $1.47 in 2007-2009, respectively.

Valuation
Our 12-month price target was raised by $5 to $50 which was derived by multiplying the NPV of marketed products/Phase 3 candidates plus net cash of $5/sh by an adjustment factor of 1.0. Our previous target was based on a factor of 0.9 to reflect competition and lack of CEO.

[Rob]

IMCL - Stilletto Heel Formation

In the early afternoon this past Tuesday I thought something might be up with IMCL when I saw this distinctive stilletto heel formation taking shape.

Turns out the takeover rumors are starting up again. If true it's got to be something above 65, or I doubt it would go through.

[billyjoe]

GOOG Google tgt raised to $670 from $620 at BofA (609.62 ) (This news just in). I am holding 100% from 296.93; 423.38; 502.36. Mama

River,
The 296.93 entry is awesome. To continue holding ,you're a pillar of strength. Sold 1/3 today at 616.10. The Tribe and River rock !!

-------------billyjoe

[riverbabe]

Goog

GOOG Google tgt raised to $670 from $620 at BofA (609.62 ) (This news just in). I am holding 100% from 296.93; 423.38; 502.36. Mama

[Rob]

GOOG - 4-year Chart

[billyjoe]

Rob,
I attempted to sell 1/3 of my GOOG at 609 , but it was only 3 minutes before market close and it didn't fill. Just got in the door and saw the price.
Am up 43% this time and sold for a 100 point gain a couple years ago. All stocks should be so nice.

--------------billyjoe

[Rob]

Goog $600

Google (GOOG) hit exactly $600.00 at 9:40 a.m. (just a few minutes ago).

No, I didn't sell yet.