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Elan Pharmaceuticals: Just what the stock doctor ordered?
Despite a horrible environment for stocks, investors are still willing to reward companies that innovate with products that can deliver huge revenue growth. Such is the case with Elan Pharmaceuticals (ELN). The company recently announced positive trial for an Alzheimer drug pushed shares of ELN $10 higher over the last month. That is a strong gain, no doubt, but can the stock go higher?
I think so. We are in the midst of horrible market conditions. Speculation is being shunned and as such stories like ELN have a limited pool of willing buyers. Should that mindset change ELN has the potential to double in value in my opinion. What do you think? I will report back on ELN with your opinions in next week's Bull/Bear Report.
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vanmeerten![[TypeKey Profile Page]](http://www.investorplaceblogs.com/strategylabopen/nav-commenters.gif)
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Buy Elan before you forget! I've been following Elan Pharmaceuticals for some time but not for their drugs. I used to live in Gwinnett County Georgia and back then Donald Panoz President and Chairman of Elan was buying up land in Gwinnett to build a winery. I visited it from the beginning and really liked the wine.
Recently, Elan began coming up on my screeners with a 96% buy on BarCharts. The stock began trading above it's 20, 50 & 100 day moving averages which are part of my required litmus test. When Ken Kam started mentioning the stock I knew I had to look deeper into it. Every place I look there are positive stories, when that happens I start to worry.
As boomers approach their 70's they start to worry about quality of life. They see drugs are controlling a lot of the causes for premature death: Weight, Diabetes, High Blood Pressure and Cholesterol. Many of their older relatives and parents are living longer but sliding into a dark hole of forgetfulness and death called Alzheimer's. They are really afraid of this disease more than any other.
Elan's trial of Bapineuzumab - nicknamed Bappy may offer protection and cure. Good trial results are all over the news. You may find boomers taking it just because.
Here's my caution: I'd buy the stock on it's technicals alone but it really has a story being covered by the news and a product that may have one of the largest markets in history. Why the caution?
I've seen press releases before about new wonder drugs. Sometimes later phase trials don't pan out or someone else comes along with an cheaper, more effective drug just when you're about to come to market. I worry that Elan may not be able to dominate market share when this drug goes into production.
Buy the stock and ride it on up but PLEASE, PLEASE protect yourself with a trailing stop loss in case the drug gets blind sided by later trial results or competition.
Posted by
vanmeerten |
June 29, 2008 5:18 PM
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