Soaring Genetic Therapy stock dips after analyst sounds caution

May 13, 1993|By Liz Bowie | Liz Bowie,Staff Writer

Genetic Therapy Inc.'s stock dropped 7 percent yesterday after an analyst said the share price, which had soared by 59 percent in a month, was excessive.

The stock closed at $16.75, down $1.25, after Montgomery Securities analyst Brandon Fradd reduced his rating from a buy to a hold.

The stock had jumped from $11.50 April 8 to a closing high of $18.25 Monday amid reports that trials using the Gaithersburg company's gene therapy product to treat brain cancer were going well.

Mr. Fradd said a price over $18 exceeded what he believed was a reasonable value. He said he would not advise investors to buy the stock over $16 or $17, although he would expect the stock price to rise if results of the experiments are "spectacular."

At the company's annual meeting yesterday in Rockville, Chief Executive James Barrett said he believed investors were reacting to leaks of news from the clinical trials at the National Institutes of Health. Doctors there began treating patients in December with gene therapy.

If the patients are successfully treated, the company could be the first to market with a gene therapy product.

The first jump in price was seen after an article in Barron's in April, but a more drastic increase came after the May 5 issue of the Journal of the American Medical Association reported that investigators were "encouraged by their results so far." They have treated eight patients and have permission to treat 12 more.

But researchers and company officials have declined to give any further details on how the trials are going until they have a clear indication of whether it works.

In other news about the company, W. French Anderson, a prominent gene therapy researcher who collaborates with the company, said that NIH researchers will begin treating an 11-year-old-girl today with what is hoped will be a permanent cure for ADA deficiency, a genetic disorder that leaves children without functioning immune systems. The girl is one of two who received the first gene therapy in the world at the NIH in September 1990. That treatment, intended as a temporary fix, was successful.

Genetic

Therapy Inc.

.. .. .. .. .. .. Ticker.. .. .. .. .. .. .. ..Yesterday's .. .. ... .. .. ..Symbol .. .. .. .. ... .. .. Cls... ... Chg.

.. .. .. .. .. GTII .. .. .. .. .. .. .. .. 16 3/4 .. .. .. -1 1/4

Period ended

March 31 .. .. .. .. 1st qtr.. .. .. .. Year ago.. .. .. .. .. Chg.

Revenue .. .. .. .. $1,399 .. .. .. .. $375 .. .. .. .. .. .. +273.0%

Net Income.. .. .. ..$(2,045).. .. .. ..$(1,797).. .. .. .. .. .. --

Primary EPS .. .. .. $(0.20).. .. .. .. $(0.20).. .. .. .... .. .. --

Figures in thousands (except per share data.)

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