BW Online | June 25, 2001 | Making Eyes at Ivax

U.S. EDITION
Full Table of Contents
Cover Story
Up Front
Readers Report
Corrections & Clarifications
Books
Letter From Russia
Technology & You
Economic Viewpoint
Economic Trends
Business Outlook

News: Analysis & Commentary
In Business This Week
International Business
International Outlook
Government
Management
Annual Design Awards -- Introduction
Annual Design Awards
Finance
Media

Sports Business
Developments to Watch
BusinessWeek Investor
The Barker Portfolio
Inside Wall Street
Figures of the Week
Editorials

INTERNATIONAL EDITIONS
International -- Asian Cover Story
International -- Letter From Chicago
International -- Spotlight on Russia
International -- To Our Readers
International -- Readers Report
International -- Asian Business
International -- European Business
International -- The Middle East
International -- Finance
International -- Int'l Figures of the Week

PREMIUM CONTENT MBA Insider

BW MAGAZINE Get Four Free Issues Register Subscribe Customer Service

ONLINE FEATURES Book Reviews BW Video Columnists Interactive Gallery Newsletters Past Covers Philanthropy Podcasts Special Reports BLOGS Auto Beat Bangalore Tigers Blogspotting Brand New Day Byte of the Apple Economics Unbound Eye on Asia Fine On Media Green Biz Hot Property Investing Insights Management IQ NEXT: Innovation NussbaumOnDesign Tech Beat Working Parents TECHNOLOGY J.D. Power Ratings Product Reviews Tech Stats Wildstrom: Tech Maven AUTOS Home Page Auto Reviews Classic Cars Car Care & Safety Hybrids INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads

BW EXTRAS BW Digital BW Mobile BW Online Alerts Dashboard Widgets Podcasts RSS

RSS Feeds

Reprints/ Permissions Conferences Research Services

JUNE 25, 2001

INSIDE WALL STREET

Making Eyes at Ivax

Gene Marcial

STORY TOOLS

Printer-Friendly Version

E-Mail This Story

Chart: A Recent Revival

INSIDE WALL STREET

Making Eyes at Ivax

Horizon's Brimming Organic Milk Pail

Will Kluge Prevail at Metromedia?

If there is anything that inspires investors' confidence in Ivax (IVX ), it's CEO Phil Frost's "nose for products and deals," according to Nissim Aboodi, president of money manager Questrion Corp. Ivax, a developer and maker of generic and branded pharmaceuticals, has 34 applications before the Food & Drug Administration, thanks to Frost's constant search for new products. As for deals, Frost's latest acquisition, LabChile, a major drug outfit in Latin America, should boost earnings in 2002.

But the deal investors are really anticipating: an Ivax merger--with the likes of GlaxoSmithKline or AstraZeneca, two companies said to be eyeing Ivax. Frost, who owns 12% of Ivax, "is shareholder-oriented and receptive to good ideas--including the sale of Ivax," says Harvey Eisen, a former investment adviser to Citigroup's Sandy Weill and now president of Bedford Oak Advisors. Frost is 64, so it isn't unthinkable that he'll do a deal, he argues.

When this column featured Ivax on July 15, 1999, the stock was at split-adjusted 7. It is now trading at 37, and Aboodi thinks it could double in 18 to 24 months. "Ivax has blockbuster drugs in its pipeline," he says, including TP38, a novel immunotoxin drug for brain cancer, and paclitaxel, a generic version of Bristol-Myers Squibb's anticancer drug Taxol. Ivax has also developed a system to deliver paclitaxel orally. Early tests on TP38 indicate "encouraging results," says Aboodi. Phase I and II clinical trials are under way, and because of the drug's importance, it could get a fast-track process at the FDA, says Aboodi.

Ivax is becoming more focused on branded products, notes Merrill Lynch's Gregory Gilbert. That should bring higher margins and more sustainable growth, says Gilbert, who sees Ivax earning $1.15 a share in 2001 and $1.35 in 2002.

By Gene G. Marcial

Get BusinessWeek directly on your desktop with our RSS feeds. XML

Add BusinessWeek news to your Web site with our headline feed.

Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video.

To subscribe online to BusinessWeek magazine, please click here.

Learn more, go to the BusinessWeekOnline home page