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Keep Your Eye On COR Therapeutics

Well, we finally stood our ground and attacked Afghanistan. No one knows how long the military campaign will last or what the outcome will be, but we must stand together and remain strong.

As the U.S. took military action, the markets fell, but history has shown the markets will recover after times of crisis. So if you are willing to do some bottom-fishing, one company that looks especially attractive is COR Therapeutics (CORR).

Just before the market closed last Wednesday, COR warned that its third-quarter profit would fall short of expectations due to weak September sales of its anticlotting drug Integrilin, lower interest income and a possible delay in a milestone payment.

Integrilin, COR's lead product, is marketed with partner Schering-Plough (SCH) in the U.S. for the treatment of acute coronary syndromes, and is used to prevent blood clots during angioplasty, a procedure that is used to clear clogged arteries.

In its warning, the company said that third-quarter sales of Integrilin to wholesalers in the U.S. would be approximately $53 million, while worldwide sales would be approximately $59 million for the third quarter of 2001, primarily due to lower-than-expected demand in September. The company had originally anticipated worldwide sales of Integrilin for the quarter to be $67 million. While analysts had been looking for a profit of 8 cents per share in the quarter, the company now says it expects to earn just a penny per share.

On COR's conference call, management reaffirmed that it is on course to meet fourth-quarter revenue expectations, but the call left me wondering why there wouldn't be an upside to fourth-quarter numbers. If the Sept. 11 attack in New York City caused a postponement in people getting surgery, I would think those same patients would still need to reschedule their angioplasty procedures, allowing COR to regain lost sales.

One possibility is that sales were lost because competition may be tougher than anticipated, although the company had said sales were robust up until the week before the tragedy. So the next question that looms in my mind is, can Integrilin continue to capture market share from Johnson & Johnson's (JNJ) ReoPro and Merck's (MRK) Aggrastat, its primary competitors?

There are a couple of factors to consider. First, COR has a marketing deal with Genentech (DNA) that should accelerate growth through the end of the year. Second, COR plans to present additional data from the Phase IIb Integrilin trial at the American Heart Association meeting in November. Finally, and perhaps most important, COR and Schering-Plough plan to present preliminary data from their 60,000-patient study to assess and promote implementation of guidelines from the AHA and the American College of Cardiology for early use of IIb/IIIa antagonists, of which Integrilin is one. COR hopes this information will help boost sales and reinforce the credibility of Integrilin as a good drug.

While I'm disappointed with the pending formal announcement of the third-quarter results, I'm not discouraged by Integrilin's sales growth. It's a viable drug that has the potential to penetrate the market, but probably not at the rate previously anticipated by Wall Street or COR.

COR's management remains confident that the sales trend for Integrilin will continue to grow, despite the slowdown in demand after Sept. 11. However, the latest warning has dampened the momentum of COR's share price, sending it down close to its 52-week low of $17.50.

This may be a good time for investors to consider adding COR to their portfolios, as Integrilin's sales will continue to grow. I'd also like to see management's plans for the cash the company has accumulated, having hinted in the past about possible acquisitions or licensing agreements that would help enhance the company's drug pipeline. I advise investors to keep a close eye on Integrilin's sales trend going forward, which can act as a catalyst for COR's share price in the next 12 months. I look for a 12-month target price of $40.

Nadine Wong is the editor, publisher and co-founder of the BioTech Sage Report and a biotech columnist for worldlyinvestor.com. At the time of publication, Wong had no position in any of the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While she cannot provide investment advice or recommendations, Wong invites you to send comments on her column to Nadine Wong.

TheStreet.com and Wong are parties to a joint marketing agreement relating to the BioTech Sage Report, a monthly biotech newsletter written and owned by Wong. Under the agreement, TheStreet.com provides marketing services, including promotion of the BioTech Sage Report on TheStreet.com's Web properties and in her columns that appear on RealMoney.com. In exchange for these services, Wong shares with TheStreet.com a portion of the revenue generated by subscriptions to the BioTech Sage Report resulting from those marketing efforts.

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