For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.
"My favorite speculative stock for 2008 is Elan (NYSE: ELN)," says Ken Kam, editor of Marketscope, who also featured the same stock as his favorite in last year's report.
"The stock started this year at $14 and now trades at over $24 -- up over 70% for the year, and more than triple from our original recommendation. It is hard to believe it, but I think Elan still has more room to run.
"I originally recommended it in June 2005 at $7 after the company withdrew Tysabri, a multiple sclerosis drug, from the US market. After being reapproved by the FDA nearly 17 months ago, Tysabri is used by less than 20,000 out of more than 1 million potential patients in North America and Europe.
"For all the gains we've seen so far (up 70%), these Tysabri sales have ramped up more slowly than I expected. However, next year there is a good chance that Tysabri sales will hit an inflection point where sales can more than double in a short time.
"What's holding back usage of Tysabri is the fear among patients and doctors of a reoccurrence of the complication (PML) that caused Tysabri to be withdrawn in 2005. The longer Tysabri is on the market without any new cases of PML turning up, the better the risk/reward trade-off looks to MS patients and doctors who are on the fence -- and there are a lot of them.
"In addition to Tysabri, Elan and its partner Wyeth have announced that they are going to advance Bapineuzumab to Phase III trials for Alzheimer's Disease. What is really unusual about this announcement is that it came before the Phase II trial is completed.
"The companies went out of their way to point out that 'No conclusion about the Phase II study can be drawn until the study is completed and the final data are analyzed and released in 2008.'
"But a multi-center Phase III trial can cost over $100 million. I can't believe they would start such a program without good reason to believe that the Phase II trials were successful. Thus, 2008 could bring good news on Tysabri's sales ramp and on the effectiveness of Bapineuzumab for Alzheimer's. Either of these events could drive another double for Elan."
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Reader Comments (Page 1 of 1)
12-25-2007 @ 5:13PM
lamboo7 said...
Elan is not at $24.00 and has not been in the last week. It did swell to just over its 52 week high within the last month.