AVAN: A Speculation on Anthrax

02/07/2003 12:00 am EST

Focus:

John McCamant

Editor, Medical Technology Stock Letter

"In this market of slowly eroding prices, we can only try to take solace in the fact that we think most the stocks we follow represent tremendous values at current price levels," says John McCamant, editor of The Medical Technology Stock Letter . "Thus, we recommend waiting out all of the negativity for what are likely going to be excellent long-term returns." Among his most speculative picks is this play on Anthrax.

"Avant Immunotherapeutics (AVAN NASDAQ) reported that they have been awarded a government contract for the development of an oral vaccine, which utilizes the cholera bacterium, that will protect troops against both anthrax and the plague. It will also protect against cholera. AVAN will get $2.8 million up front, and up to $8 million over the next two years. While the vaccine is years away, if it ends up working, it could be very big for AVAN, because current vaccines are injectables. Furthermore, the military's current anthrax vaccine involves six shots over 18 months, and the multiple-injection plague vaccine is no longer being manufactured. Another positive that arises out of this deal is that it will give AVAN enough cash so that they will not have to sell their stock to raise more money. We continue to hold this stock in our model portfolio. The stock is a buy up to $1.50 a share. Our long-term price target for the stock is a move to $8."

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