MY PICK IS ELN

[spikefader]

Ok, I stand corrected. I hadn't considered pre-market stops. But I also think that trading in the extended hours is a whole other ball of wax, that not everyone is ready for.

Still, a regular-market stop (like I or many here would be most likely to use) would have failed to prevent most of that $18 drop today.

I think the best use of stops is if you intend to trade stocks for just brief periods intraday. Then you minimize the possiblilty of a gap wiping out your position- despite the stop.

Yes, extended hours trading is a whole different ball of wax, one that I'd recommend everyone at least know of so that they can weigh up whether to use them.

Yes, regular market stops would have given quite a bite to an account today with ELN. And this example today highlights how critical the right type of stop can be. In hindsight, one can say, I would have prefered a premarket stop to get me out at 25.00. But if the drop was temporary and the stock took off, that same person would be cursing their bad luck, stopped out at 25.00 only to see the stock rise to 30.00. But in my humblest opinion, I think it's much better to protect yourself and use premarket stops, than to throw caution to the wind. But that's just me. If the position of the trade is small enough and you are well hedge, you might not want to use a stop, and just let the cards fall where they may, and perhaps risk the entire position going to zero. Where is ELN headed? I have a few thoughts on it, and based on my gap down target theory, it's in big trouble and in jeopardy of going to zero. A really good play now is to buy puts for ELN - say 6 months out, and out of the money. I would strongly recommend anyone sticking long with ELN to consider those puts for insurance. They won't cost much and should pay nicely. If the stock rebounds, the loss of the puts won't hurt much. But holding a long that dribbles down to nothing over the next 6 months will be agony.

[jiesen]

Yes, extended hours trading is a whole different ball of wax, one that I'd recommend everyone at least know of so that they can weigh up whether to use them.

Yes, regular market stops would have given quite a bite to an account today with ELN. And this example today highlights how critical the right type of stop can be. In hindsight, one can say, I would have prefered a premarket stop to get me out at 25.00. But if the drop was temporary and the stock took off, that same person would be cursing their bad luck,

--- EXACTLY! ---

stopped out at 25.00 only to see the stock rise to 30.00. But in my humblest opinion, I think it's much better to protect yourself and use premarket stops, than to throw caution to the wind. But that's just me. If the position of the trade is small enough and you are well hedge, you might not want to use a stop, and just let the cards fall where they may, and perhaps risk the entire position going to zero. Where is ELN headed? I have a few thoughts on it, and based on my gap down target theory, it's in big trouble and in jeopardy of going to zero. A really good play now is to buy puts for ELN - say 6 months out, and out of the money. I would strongly recommend anyone sticking long with ELN to consider those puts for insurance. They won't cost much and should pay nicely. If the stock rebounds, the loss of the puts won't hurt much. But holding a long that dribbles down to nothing over the next 6 months will be agony.

I agree 100%, and I think buying puts against a position you can't stomach dropping to 0 is a great way to protect yourself, and more likely to save your butt than a stop.

[New-born baby]

Zero

Spike, Jiesen, all

ELN borrowed something like $55 million for this drug to make it. The company was in debt before, and it looks possible that ELN may not survive. Certainly this is not the time to buy ELN long. Now if I had just shorted it on Friday . . . .

[jiesen]

ELN just cracked the $8 support.

[kingofthehill]

I am still alive, time for a stiff drink!


__ wall Street Journal
Analysts React to Tysabri Withdrawal
February 28, 2005 5:06 p.m.

Analysts responded fast to the announcement from Biogen Idec and Elan that the drug makers are voluntarily withdrawing their multiple-sclerosis treatment, Tysabri. Biogen sank 43% and partner Elan crashed 70%.

Most analysts said the potential loss of a blockbuster medicine will hit Biogen sharply, and is even worse news for Elan . Several analyst note there is a chance the drug could return to the market -- and one even upgraded Biogen. Here's more of what analysts had to say. (Some comments were edited. Analyst disclosures follow.)

* * *
This is a disaster for Elan. Even if it is found that [the problem] is only related to the combination with Avonex or is not caused by Tysabri at all, we believe the damage will already have been done, in marketing terms. We believe it is now unlikely that Tysabri will ever reach our peak sales of $3.1 billion in 2009. … Tysabri represents all of our valuation, and is Elan 's path to profitability and positive cash flow. Without blockbuster Tysabri sales, it may be difficult for Elan to pay off its $650 million debt in 2008.

-- Merrill Lynch analyst Erica Whittaker, who retained her "neutral" rating on Elan until she receives further information.

* * *
While we are currently unsure as to the potential for Tysabri to re-enter the market, it is clear that even if the drug is re-introduced Tysabri's sales potential is likely to be harmed from a marketing perspective. … In our opinion, we expect FDA to demand additional data to determine at what rate the neurological problems occur and if the safety problem occurs with single agent use as well. Thus, we believe that Tysabri will be removed from the market for a period of time with the potential to re-enter some time in the future.

-- Eric J. Ende, an analyst at Merrill, who downgraded Biogen Idec to "neutral" from "buy," citing significant sales and growth risk

* * *
In light of today's announcement, we are downgrading Biogen Idec from an "overweight" to a "neutral" recommendation. At this time, we believe the companies are taking a very cautious stance by suspending further marketing of the drug, as a result of the recent and well publicized FDA concerns over drug safety. We believe that Tysabri can still re-enter the market and become a significant revenue driver for Biogen Idec, however the timing of its re-entry and whether any restrictions are placed on its use, still has to be determined.

-- Ronald Renaud Jr. of J.P. Morgan

* * *
Until we get greater clarity on the circumstances surrounding Tysabri's future, we are compelled to downgrade the stock to "underperform" given that valuation is highly correlated with Tysabri prospects.

-- Mark Schoenebaum of Bear Stearns

* * *
We believe that Tysabri, if it were to relaunch, would have substantially diminished prospects. Our earnings-per-share estimates and price target are under review. We would expect the stock to trade like "broken" biotech stocks [such as Chiron].

-- Mark Augustine, analyst at Credit Suisse First Boston, who downgraded Biogen Idec to "neutral" from "outperform" and has an $80 price target

* * *
While the adverse events occurred with long-term combo with Avonex, we do not know at this point whether they relate to the Tysabri component or negative synergism of the two agents.

-- CIBC World Markets analyst Bret Holley, who downgraded Biogen Idec to "sector performer" and values the shares, without Tysabri, at about $40 each

* * *
In our view, we do not expect further clarification in the near- to medium-term on the regulatory/commercial status of Tysabri and are assuming a conservative stance by removing Tysabri sales from our financial projections.

-- Deutsche Bank analyst Jennifer Chao, who downgraded Biogen Idec to "sell" from "buy" and set a new price target of $38 per share

* * *
At the current price, we think the market has more than fully discounted Tysabri, creating potential upside movement on evidence of healthy Avonex sales and clarification of the pathway to relaunch, even if restricted, of Tysabri.

-- First Albany's David Webber, who lowered his price target on Biogen Idec to $44 from $76, but maintained his "buy" rating

* * *
We believe that Biogen Idec's liability risk related to Tysabri is low. The drug was pulled from the US market after only three months, minimizing risk to patients on commercial drug. Liability risk from patients involved in clinical trials is also low due to Biogen Idec and Élan's history of conducting appropriate clinical trials….

-- Bennett Weintraub, analyst for Hibernia Southcoast Capital, in upgrading Biogen to "buy" from "hold," while reducing the price target to $47 from $61

* * *
Tysabri has become an important contributor to Biogen Idec's market value. Therefore, interruptions in the launch for the multiple-sclerosis drug, or disappointing two-year clinical data from U.S. trials of Tysabri in Crohn's disease, could have a negative impact on the stock.

--Prudential Equity Group's John Sonnier, who reiterated his "overweight" rating and $78 price target on shares of Biogen Idec

* * *
At this point our information is limited, however we wanted to give investors an evaluation of the worst-case scenario, which would be zero Tysabri revenues going forward. That said, since we do not know all of the information about these patients and their circumstances, it is hard at this point to determine Tysabri's future.

-- PiperJaffray analyst Mark Karvosky, who has an "outperform" rating and $80 price target for Biogen Idec

* * *
We have few details on the decision to remove Tysabri from the market, and until there are more details on the probability of reintroducing the drug, the long-term implications are difficult to assess. That said, Tysabri is the major driver of Biogen Idec growth, and removing it completely from our model lowers 2007 earnings per share from around $3 to around $2.

-- Steven Harr, analyst at Morgan Stanley, who rates the stock "overweight"

* * *
Biogen Idec commented that the decision to withdraw Tysabri was made with FDA consent. The drug is likely to face multiple challenges in returning to market including a conservative regulatory environment [and] a dearth of existing longterm safety data…. Biogen Idec's strategy for reintroducing Tysabri is unclear. Should Tysabri be reintroduced, physicians and patients are likely to be very cautious in returning to the therapy.

-- SG Cowen analyst Eric Schmidt, who estimates Biogen Idec's shares are worth between $34 and $42

* * *
On balance, we think it seems more than likely that [Tysabri] doesn't get back on the market, because the Food and Drug Administration doesn't encourage withdrawals unless the related safety issue is severe. At least we expect the drug to have a restricted label if it comes back to market with a label limiting it to monotherapy use.

-- Sam Williams, analyst in London with Lehman Brothers who covers Swiss company Serono, which produces a rival MS drug

* * *
We remain positive on Elan 's fundamental outlook driven by Tysabri's compelling commercial potential. However, despite a positive bias on the near-medium term catalyst front, rich valuation continues to dictate a less aggressive stance on the stock.

-- Richard Silver, analyst at Lehman, who rates Elan at "equal-weight" with a price target of $31

--Compiled by Worth Civils


--------------------------------------------------------------------------------

Analyst Disclosures

• Merrill Lynch acts as a market maker for Biogen Idec and Elan and has received compensation from the companies for non-investment banking services or products within the past 12 months. The firm expects to receive or intends to seek compensation from Biogen Idec for investment banking services within the next three months.

• J.P. Morgan makes a market in the stock of Biogen Idec, which is or was in the past 12 months a client of the firm. It also expects to receive, or intends to seek, compensation for investment banking services in the next three months.

• Bear Stearns is a market maker in Biogen Idec's equity securities and the company is or during the past 12 months has been a non-investment banking client of the firm.

• CSFB makes a market in the securities of Biogen Idec and receives or intends to seek investment banking related compensation from the company within the next 3 month.

• CIBC World Markets makes a market in the securities of Biogen Idec and expects to receive or intends to seek compensation for investment-banking services from the company in the next three months.

• Deutsche Bank makes a market in the shares of Biogen Idec and owns 1% or more in the company's common stock.

• First Albany makes a market in the securities of Biogen Idec.

• Hibernia Southcoast Capital says investors should assume that it is seeking or will seek investment banking or other business from companies it rates.

• Prudential Equity Group makes a market in the shares of Biogen Idec.

• PiperJaffray has made a market in the securities of Biogen Idec and received compensation that is based, in part, on the firm's overall revenues, which include investment banking revenues.

• Morgan Stanley owns 1% or more of common stock in Biogen Idec and has either provided or is providing non-investment banking, securities-related services to and/or in the past has entered into an agreement to provide services or has a client relationship with the company.

• SG Cowen makes a market in the securities of Biogen Idec.

• Lehman Brothers regularly trades in the shares of Elan and has received compensation for investment banking services from the company within the past 12 months.

[kingofthehill]

ELN Elan Corp: Life after Tysabri (8.00 ) -- Update --

Several firms out commenting on Elan today following the surprise move by the co and its partner Biogen-Idec (BIIB) to withdraw MS drug Tysabri due to safety concerns... Smith Barney probably the most vocal with their upgrade to Hold from Sell noting they now believe there is an 75% chance that Tysabri ultimately returns to the market, albeit with a diminished peak sales potential. As such, firm's new $9.50 target (down from $25.00) is derived by blending Elan's value with Tysabri ($12.01) and its value without ($1.2...Morgan Stanley maintaining their Overweight rating noting their gut tells them that Tysabri will probably eventually come back to the market. And if the product comes back to the market, even if its prospects are materially lower than previous expectations, firm still believes that the stock can move higher from current levels. Firm believes the stock is worth $5 if Tysabri is removed from the model or $10.50 if the drug comes back to market significantly impaired. Lowering tgt to $13 from $33... Merrill Lynch noting the approximate 70% decrease in Elan shares on the back of the Tysabri bad news is reasonable, in firm's view, as the market appears to be discounting what they think is the most likely scenario for the MS market. Thinks Tysabri is re-launched within 6 months, but with a restricted label. Due to restrictions, they expect Tysabri to be used predominantly as 2nd line therapy to the interferons, thereby decreasing our 2010E global Tysabri sales from $3.1 BN to $1.4 BN. Under this scenario, firm's DCF valuation of Elan is about $8 per ADR. Profitability shifts from 2007E to 2009E. Maintains Neutral.



copied from the www.briefing.com site

[spikefader]

Jan 2006 put options 2.50 strike price are $0.30 this morning. I think I'll buy some based on the gap down target theory (i.e. gap length x 2=target). Looking at a log scale chart, the target is around 3.00, and I've got plenty of time to be right with Jan 06 puts.

[dmk112]

King, are you still holding it?

[kingofthehill]

yes its like the movie ground hog day , i am looking for $20 by fall

I sold alot along the way had a lot of winning options that i cashed out so im ok . ego is bruised and the pocket is lighter for sure !!

put some people on margin lost 100k to million on this ...margin is evil!

I never margin more than 10%

https://www.wsj.com

Tysabri's fate will be determined during the next three or four months. Elan says its medical investigators plan to review brain scans for all 3,000 patients enrolled in the Tysabri trial, as well as perform new brain scans.

"I have high confidence" that Tysabri will be on the market, said Kelly Martin, Elan's chief executive, in an interview yesterday.

[Websman]

It's good to see that you survived the big drop King. This has proved to be a rough year, so far. It takes a tough, stubborn S.O.B. to survive this market.
We're still here, so we must be those S.O.B.'s!

[kingofthehill]

this could be the BUY of a lifetime, Morgan Stanley says the drug will be back, only buy with money you can afford to loose!

this could double or more ...or it could crash

good luck ..im still long


any option players out there??????????

[IIC]

I guess you could say it is oversold...the RSI(14) is 8.2...the only lower one I found was DPH at 7.9. The standard for being considered oversold is 30.

Here are some others under 20: OSIP BDY CKC LEA NTEC FOB FMXI LF

[spikefader]

this could be the BUY of a lifetime, Morgan Stanley says the drug will be back, only buy with money you can afford to loose!
this could double or more ...or it could crash
good luck ..im still long
any option players out there??????????

King,
re my put options call the other day http://www.mrmarketishuge.com/forum/...&postcount=307
those Jan 06 puts are now at asking $0.55.
That's 83% profit in 3 days right there. That's a lot better than hoping the stock price doubles. Hope you hedged and got some of that.

[noshadyldy]

King, I think options are the way to go here. I don't use them, but I think ELN may be the think that pushes me into that.
This drug HAS GOT TO come back and take the stock right along with it. The demand for this drug is incredible! Viox is slapping a little warning label on itself, I think that may happen here. And we all know how well warning labels keep buyers away. Just ask any cigarette dealer!

I feel just awful for the MS sufferers out there with their dropped hopes. Hang in there. Tasabri is coming out soon.

margie

[noshadyldy]

King, have you considered ELANZ - the warrants on Elan? Up over 30% in last 2 days. Not too shabby.