Alex To
Credit Suisse First Boston
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 | | Report Card | | 3* | Overall rank | | 3* | Rank by institutions | | 19* | Rank by stock picking |  | Makes money for me |  | Saves me from disaster | | | Makes me think |  | Tells the truth | | Meaningful service, not overkill | | Well-connected | *Out of 27.
Best star rating is 3 stars. Click here for our methodology. |
3rd Place
Biotechnology
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Bio
B.S., M.D., Boston University; M.B.A, Wharton School of the University of Pennsylvania. To joined Credit Suisse First Boston as a director and head of the biotechnology group in 1999. Before that, he was the senior biotech analyst at Deutsche Bank Securities and at Donaldson Lufkin & Jenrette. Prior to becoming an analyst, he worked in venture capital. Industry Outlook and Style
Like first-place analyst Meirav Chovav, Alex To gives his highest rating -- strong buy -- to industry leaders Amgen (AMGM Quote - Cramer on AMGM - Stock Picks) and Genentech (DNA Quote - Cramer on DNA - Stock Picks). To also likes several companies involved in genome-related research. Unlike Chovav, To isn't attempting to call the outcome of Amgen's suit charging Transkaryotics Therapies (TKTX Quote - Cramer on TKTX - Stock Picks) with infringement of its Epogen patent. (The drug is a genetically engineered form of a hormone that enhances red blood-cell production.) Win or lose, To considers Amgen a good long-term bet. "In the worst-case scenario, Amgen will lose $300 million to $500 million of revenue from Epogen," he points out. "But the four products it has slated to come to market should ultimately generate $3 billion worth of incremental revenue opportunities." The four drugs are NESP (a second-generation Epogen product), Kineret (for rheumatoid arthritis), Abarelix (for prostate cancer and endometriosis) and Filgrastim SD-01 (a new version of Amgen's blockbuster cancer drug, Neupogen). Further afield, To has buys on several companies involved in genome-related research. In his view, three research subsectors will attain prominence as companies scramble to find commercially viable ways to put the gene-sequencing map to use. (On June 26, the public-private consortium, Human Genome Project and Celera Genomics Group (CRA Quote - Cramer on CRA - Stock Picks), announced that they had completed a rough draft of the human genome.) The first subsector he singles out is SNP, or "snip" analysis. SNP research assesses how small variations in individuals' genetic sequences influence susceptibility to disease. A name To particularly likes in this group is Orchid BioSciences (ORCH Quote - Cramer on ORCH - Stock Picks). (See our related story.) To also foresees a bright investment future for functional genomics, which is research to determine the function of mapped genes. Knowing a gene's function is necessary before drugs can be developed. He favors Lexicon Genetics (LEXG Quote - Cramer on LEXG - Stock Picks). Lexicon produces so-called "knockout mouse models" -- laboratory mice with one gene made nonfunctional. By studying the deficiencies in the full-grown mice, researchers can determine the damaged gene's function. The third research area highlighted by To is "lead generation and optimization" -- the process of identifying genes that will make good targets for drug "discovery" (i.e., development). He is recommending Praecis Pharmaceuticals (PRCS Quote - Cramer on PRCS - Stock Picks). The company has developed Abarelix, which is used to treat prostate cancer and endometriosis. Amgen is comarketing it. To recently downgraded several stocks to a hold because of pipeline concerns: Gilead Sciences (GILD Quote - Cramer on GILD - Stock Picks) (downgraded July 21) and Biogen (BGEN Quote - Cramer on BGEN - Stock Picks) (downgraded five months ago). And right now he is worried about valuations: The biotech group has gone up about 70% since the April low. In mid-July, he downgraded Immunex (IMNX Quote - Cramer on IMNX - Stock Picks) from strong buy to buy because of valuation concerns. Shares of the company, whose primary product on the market is Enbrel (for rheumatoid arthritis), had doubled in the preceding three months. (CSFB has investment banking relationships with Genentech, Lexicon, Orchid and Praecis.) The CSFB analyst also warns investors to be selective: "There are a lot of companies without true substance," he says. Voters in TheStreet.com's Analyst Rankings -- Equity 2000 survey give To rave reviews: One calls him "a phenomenal stock picker," while another describes his report on genomics as "outstanding." Still another client says that "Alex has the best feel for the broader market and how biotech stocks trade within it than anyone on the Street." Stock Pick
Favorite stock for next 12 months:
Amgen
Comment:
"Amgen's lawsuit should be over by early fall. This will allow the investment community to focus on the company's pipeline. Four new products will be launched in the next 18 months."
Rate Their Stock Picks: Which stock do you like best? Chovav and To: Amgen Ho*: MedImmune *Chovav and To each gave us their top stock pick for the next 12 months. Ho gave us her top pick for the year 2000.
TSC Staff
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