See GENZ's official
investor relations' site
here.
See the Yahoo!
Finance profile for
GENZ
here.
See Opening Segment 2,
below...
After this segment, you
can see Jim's Lightning
Round picks
here...
. . . .
.
JJC:
Ugliness came back with
abundance today... banks,
brokers, rails... they all
got crushed as the oils,
at last, seemed to find
their footing... and the
natural gas stocks - the
worst hit group, other
than banks - actually
rallied...
What's happening?...
I believe that oil and
natural gas have finally
come down to a level where
there might be some
demand... Gasoline,
I told you $3.50...
that's where people pump.
$110 oil... our original
price target, give or take
a buck or two... and the
cleaner carbon natural
gas... it's trading at $8.
Coal's worth $7.50.
They're at parody...
Meanwhile, the banks...
they're back on the
red-hot griddle... as,
suddenly, the analysts
community has turned on
them big, citing weaker
earnings, bad equities
markets... the usual
negatives...
And most importantly
though, we are back where
the SEC is allowing the
kind of free-fire zone
short sell that we can
condemn on this show.
The rules that ban bear
raids are once again
gone... What?
Do you think these stocks
went down for no reason?
The rules are gone.
They are the rules that
stop endless, motivated
declines by short
sellers... who take your
stocks and slam them in
your face, using rules
that should be enforced...
and other rules that they
just threw away that could
really stop this.
The SEC and its academic
bedfellows are out and
doing it again...
Here's a memo, SEC...
Have me come down... I'll
explain to you the way the
world really works... how
the hedge funds drive
these stocks down, now
with your complicity...
and you can explain to me
your position, which
allows banks to get raided
and, ultimately, run into
the ground, perhaps with
bank runs... by
hedge funds needing to
make oodles of money by
rich clients...
Shame on you, SEC...
. . . .
.
My take is that you can
take an oil or bank... if
you don't own either...
and begin the process of
buying, into tomorrow's
raiding. They're
going to raid them all
week and, believe me, they
will raid them...
Oh, by the way, the
rails... totally raided
today... I think they're
going to crush them.
You've got to leave that
group... you've got to
leave them. It's one
of my favorite groups, but
let the hedge funds do
their damage. They
decided to operate on the
rails. They're going
to take them down...
. . . .
.
Now let's play some
offense...
For us on Mad Money, well,
we're playing offense by
playing biotech...
You've heard of "Shark
Week"... this is "Biotech
Week"...
Biotech was the
best-performing group in
1990... It was led
by
Amgen Inc. (AMGN)...
It's also generally
beloved by the democratic
party, even as they hate
big pharma, and they seem
to be poised to win big
this December...
There have been takeovers
galore in the group, the
biggest being Roche's bid
for 45% of
Genentech Inc. (DNA)...
And, finally, for
everything there is a
season... and, for
biotech, that season's
usually the fall...
because it tends to be
loaded with medical
conferences and drug
approvals... a lot of news
coming...
Hey, why does this
matter?... Because,
in this wild market, where
people are shooting at you
from left to right, and
it's anything but (easy),
you need to be grounded in
something in the future...
grounded from lightning
strikes... and you'll know
you'll hold on when the
stocks go down, and you
won't panic...
. . . .
.
So we're looking for biotech stocks that
fit somewhere in this template, and the
one I've got today is...
Genzyme Corp. (GENZ).
While the democrats generally love
biotech, they absolutely adore biotechs
like GENZ, that focus on developing
drugs that treat rare diseases with
small constituencies.
GENZ makes drugs that fall into what's
called "orphan" status... meaning that
they treat diseases that affect less
(fewer) than 200,000 people in America,
or in the EU (European Union of
countries)... diseases that occur in
less (fewer) than 5 in every 10,000
people.
If you make orphan drugs in America, you
get seven years of exclusivity, which is
really just another word for no
competition... We still love
a government for, by and of the
corporation... in addition to tax
credits for R&D (research and
development)... great, great,
great... and just imagine how
those tax credits could balloon if Obama
wins... It still looks like he's
going to, although the defense stocks
(which would respond better to a McCain
win) are saying it's getting even.
The EU gives orphan drugs 10 years of
exclusivity. They may be orphan
drugs but, to me, they could make you
Daddy Warbucks...
About 51% of GENZ's sales come from
drugs that treat Lysosomal storage
disorders... They're a group of
rare genetic disorders where a patient
lacks an enzyme that allows their cells
to function normally. There are
over 40 different kinds of these
disorders, and they go by really
difficult names... things like Gaucher
disease, Fabry disease and Pompe
disease, the big three Genzyme treats...
Even though not many people have these
diseases, GENZ still makes a lot of
money selling the drugs, because they
can charge the exorbitant prices...
For example, GENZ's biggest drug is
called Cerezyme... It's for
Type 1 Gaucher disease, which is an
enzyme deficiency that causes fatty
material to collect in the spleen, the
liver, the kidneys, the lungs... brain
and bone marrow. This was a $1.1
billion drug in 2007, even though less
than 5,000 people take it, because the
annual cost of Cerezyme is $250,000...
The New York Times may not think this is
worth it, but the patients do, and
that's what matters...
. . . .
.
Cerezyme's manufacturing patents expire
in 2010 here and 2013 in the EU, but
GENZ's got plenty more drugs that still
have exclusivity... it is a beautiful
pipeline...
It's got Fabrazyme for Fabry
disease... that causes lesions and
burning pain in the extremities...
The stuff that they cure is so awful.
This is an amazing company. It
causes kidney failure if not attended
to...
GENZ has U.S. exclusivity here until
2010. Last year, it was a $424
million drug, but the number of people
who take it is expected to grow 18% this
year, 12% next year...
GENZ has so many of these orphan
drugs... It's got Myozyme
for Pompe disease. That's a
metabolic disorder where the patient
doesn't have the enzyme needed to break
down sugar for energy...
patent-protected through 2013...
Aldurazyme for another metabolic
disorder... it has exclusivity until
2010... although GENZ pays
BioMarin Pharmaceutical Inc.
(BMRN)
royalties for this one...
BMRN
has come right back down. I've got
to do some work on that...
It's expected to grow to a $1.1 billion
franchise and all of these drugs cost
between $220,00 and $300,000 a year on
average for just a single patient, and
yet, they've got to pay.
Those are just the orphan drugs.
GENZ's got a great kidney franchise,
which management expects to generate $1
billion in sales by 2010.
. . . .
.
Then there's the pipeline...
I mean, I could see a traditional pharma
company buying GENZ just for what it's
got in the late-stage pipeline, although
they should have bought it years ago,
it's been such a winner...
There's Mozobil, a stem cell
transplant drug that could be worth
$150-250 million. The FDA will
decide in the third quarter whether to
fast track that one.
How about Mipomersen (yes, we had
to look up these names on
the Genzyme website pipeline chart)
for familial high cholesterol.
This one's in Phase III studies.
$450 million... maybe $900 million... a
catalyst coming in the form of four
trials GENZ's doing in collaboration
with Isis, sometime during the second
half of the year...
How about the biggest kicker of all?...
A drug called Alemtuzumab... this
is for Multiple Sclerosis, and it's
already in Phase III. It could be
years away... the last phase of studies
before the FDA approves or rejects the
drug. Look, I don't even know how
big this one is, but the global market
for MS treatment is over $6 billion...
. . . .
.
I think GENZ has what you want from a
biotech...
...extraordinarily expensive drugs, with
exclusive orphan protection... democrats
endorse that... along with what appears
to be a fabulous pipeline.
I don't know... how about $92
instead of $78?...
Remember, biotech works. A $78
stock I think goes to $92... that's if
nobody decides to buy it for a
takeover...
. . . .
.
The Bottom Line!:
I believe the time is still right
for biotech, particularly when the banks
go down... biotech tends to go up the
next day. I think
Genzyme Corp. (GENZ),
with its orphan drugs, is going to be a
big winner, come November. The
democrats love this kind of company, as
much as they hate big pharma. I
think GENZ... yesterday, we did
another biotech stock. You
know we're going to stay on biotech all
week. These are the winners.
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Focus Fund
Top 25 holdings - The No.
3 Top-Performing Mutual
Fund in 2007
See TYC's official
investor relations' site
here.
See the Yahoo!
Finance profile for
TYC
here.
After this segment, you
can see Jim's Lightning
Round picks
here...
. . . .
.
Earnings season is over,
and we've got a new thesis...
The companies with the biggest earnings
beats will tend to be the ones with the
best-performing stocks over the next
three months. Empirically, it's true...
although, oddly, the ones that performed
really horribly - like some of the banks
- have come back.
The way to pick good stocks is to figure
out who beat the numbers big, and then
let the stocks come down... and then
buy.
This week, I'm giving you my favorite
stocks, among those that just reported
the biggest beats in this just-ended
earnings season...
Yesterday, it was
Jones Apparel (JNY)...
I said, at $17 bucks, I want to buy JNY.
I'm not a buyer here. There was a big
short squeeze. It took it up a little
too far... I'm not a buyer, but you're
going to put it in your shopping cart...
so, when it comes down to $17, you buy
it.
Now I want you to look at
Tyco International Ltd.
(TYC)...
Why?... Great beat. It was
just downgraded today by
J.P. Morgan, on valuation.
Maybe it will come down
enough to make me like
it...
I think the downgrade's
fantastic. I really do, I
love it...
See, this series is just
about companies... It's
about companies, not just
the beat... but the stock
itself, the price. It's
about when to buy. It's
about how to buy good
stocks in a horrible
market like we have...
. . . .
.
All right, here's the
bottom line...
The Bottom Line!:
Tyco International Ltd.
(TYC)
had one of the best beats of any company
this earnings' season. It's got
great businesses. But, again, this
thesis is not just about earnings beats.
I need you to keep your bat on your
shoulder (i.e., a baseball metaphor of a
batter at the plate, but only hits when
the pitch - or in this case, the stock
price - is right) until you get your
price, and only then swing. The
market is vicious. Keeping price
control is better than flow control.
TYC... under $42.00
■
Stock Snapshots - Includes
all stocks mentioned above
■
Jim
Cramer's
rating on
this stock
STOCK
SYMBOL
Closing
price
that
day
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price
next
day
Full Company
Name/Comments
(see comments above for
each)
Go to the LIGHTNING ROUND from
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think it is indicated by his
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Please read his comments to
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Thumbs down -
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We do our best to interpret
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his comments during the
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Back up the truck -
indicated by Jim, when he
says the stock is so good,
that he would do a
'mon-back' on the stock...
In other words, this is the
sound someone would say to a
truck driver, "Come on
back... " as he is "backing
up the truck" to load up on
his cargo. Translation
for buying stocks:
This recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point.
Stumped. - Of the
2,000+ stocks that Jim
Cramer has in his head, for
which he has an informed
opinion, he sometimes comes
across a caller with a stock
he does not know well enough
to opine on... He then
indicates he is stumped and
will have to come back to
it, after he does some
homework of his own on
the stock. This
usually occurs during the
Lightning Round, when Jim
does not know in advance who
is calling, or what their
stock question is about.
Definitions of key phrases
used by Jim, known as
"Cramerisms":
Definition: 'Pull the
trigger' is Jim's phrase for making
the decision at that point to trade -
either to 'buy' or
to 'sell' (although he
usually uses the phrase for
buying), as if to say you
should feel comfortable
enough to make the final
decision without looking
back...
Definition: 'Ring
the Register' is Jim's phrase for
selling a stock, and making
it a final sale, that you
should not look back on.
Put it behind you.
Definition:'Let It Come In' indicates how you
may wait for it to pull back, or have the
stock price come down briefly, as your
chance (after letting it come in) to buy
the rest of your position (i.e., total
number of shares you own in that stock).
Definition:'backing it up'
or 'doing a 'mon-back' is Jim's
phrase for the metaphor of backing up a
truck to load up on a stock by buying
it. 'Mon-back is short for the
imaginary worker saying, 'Come on
back...' as the truck is backing up to
receive its load... Notice that we use
the little truck icon to indicate where
Jim has mentioned this.
Translation for buying
stocks: This
recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point.
See more
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financial phrases
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