Chicago, IL – August 27, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: United Heathcare Group (UNH), Aetna (AET), Wet Seal Inc. (WTSLA), VeriSign Inc. (VRSN) and Syniverse Holdings Inc. (SVR).

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Here are highlights from Wednesday’s Analyst Blog:

CBO Overstates Healthcare Costs

Some of the more outrageous types of misconduct by the likes of United Heathcare Group (UNH) and Aetna (AET) might be curbed, such as the cancelling of policies as soon as someone gets sick and puts in a substantial claim. Morally, that is just plain fraud ("You didn't tell us that you went to see a dermatologist for your acne when you were 16, so we will not cover your cancer treatment at age 55"), although the insurance companies have very good lawyers who write the contracts to make sure they can get away with it.

It might even end the practice of discriminating against sick people (aka pre-existing conditions). It will come at the expense of using the force of law to get the young and the healthy to buy coverage. Since the young, on average, seldom make expensive claims, those customers would be a gold mine for the insurance companies.

None of those things are likely to stop the relentless rise in Health Care costs as a share of GDP. The nation may go bankrupt, but the health insurance companies will not. They will be even more prosperous than they are today. Their investment in people like Sen. Max Baucus (D-MT) and Kent Conrad (D-ND) has to go down as one of the most profitable in history.

Wet Seal Reports Modest Results

Wet Seal Inc. (WTSLA) reported modest results for the second quarter with earnings of 3 cents per share, which was in-line with the Zacks Consensus Estimate. However, earnings were down 9 cents year-over-year. Wet Seal is a specialty retailer, operating apparel and accessory items stores for female customers in the U.S.

Net sales for the quarter declined 8.5% year-over-year to $136.4 million. However, Internet sales grew 12.7% year-over-year. Overall comparable same-store sales declined 10.6%. Comparable same-store sales in the Wet Seal segment declined 11.9%, and at the Arden B segment it declined 4.1% year-over-year.

VeriSign Divests Messaging Biz

VeriSign Inc. (VRSN) yesterday agreed to sell its messaging business to Syniverse Holdings Inc. (SVR) for $175 million. The transaction is subject to certain closing conditions and regulatory approvals.

Headquartered in Mountain View, California, VeriSign provides essential Internet infrastructure services to companies, service providers and website owners.

Tampa, Florida-based Syniverse provides wireless voice and data services for telecommunications companies worldwide. The company said that the deal will expand its mobile messaging capabilities and increase its global footprint through nearly 300 additional employees in the United States and Asia Pacific.

The messaging business has had an annual revenue run-rate of approximately $140 million over the last 12 months. With this divestiture, VeriSign will be left with only one of its thirteen businesses to divest. From November 2007 to date, the company has sold twelve non-core units for $750 million. The business which remains to be sold is Global Security Consulting.

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With the acquisition of Medarex, Bristol-Myers will get the UltiMAb Human Antibody Development System, which produces high affinity, human antibodies for use in a broad range of therapeutic areas, including immunology and oncology. It will also obtain Medarex’s next-generation Antibody-Drug Conjugate (ADC) technology, which is a novel and proprietary platform that could open new fields in cancer treatment.

Medarex’s has seven antibodies in clinical trials under its sole funding and is developing three other antibodies under partnership contracts. Importantly, Bristol-Myers will acquire full ownership and rights to ipilimumab, which, if approved, could be a major contributor to the company’s future growth.

Ipilimumab, a novel immunotherapy, is currently in phase III development for metastatic melanoma. It is also undergoing phase II study for lung cancer and other late-stage studies for adjuvant melanoma and hormone-refractory prostate cancer.

The Medarex acquisition should help Bristol-Myers offset the loss of revenue after its key product Plavix loses exclusivity in 2011. The company is building a strong pipeline of candidates to boost sales in the coming years. Additionally, management is working on reducing costs and shedding less profitable and non-core businesses.

We currently have an Outperform rating on the stock. We believe that the current price represents an attractive entry point for long-term investors.

The open-label, multiple dose study is designed to evaluate the tolerability, safety and efficacy of the inhibitor following the oral administration of the drug to advanced cancer patients with solid tumors on a daily basis. The study is expected to commence in the third quarter of 2009.

Array is also evaluating the candidate for arthritis and chronic obstructive pulmonary disease (COPD). Currently, a worldwide phase II, double-blinded study (n=200) for ARRY-162 with active rheumatoid arthritis is in progress.

We think that Array's decision to evaluate its most advanced MEK inhibitor in the field of cancer will benefit cancer patients immensely. Further, management believes that ARRY-162 is not only well-suited for cancer treatment but possesses significant advantages over other MEK inhibitors currently in development, including greater potency, and improved safety and pharmacokinetics.

In addition to its proprietary pipeline, the company has entered into collaborations with leading pharmaceutical and biotechnology companies like AstraZeneca (AZN) and Celgene Corporation (CELG). However, we are concerned about all of Array's R&D programs being in a very early stage of development. This contains high operational risks. Any trial failure(s) is bound to affect its share price adversely. It has no product in the market and, given the early-stage of its pipeline, an Array product hitting the market looks like a distant possibility.

The company is currently seeking to enter new drug discovery collaborations, which will provide research funds. We have a Hold rating on the company's shares since Array possesses a higher risk profile than most investors may be interested in undertaking due to its early-stage pipeline, and its reliance on third-party clinical support.

The company plans to become the third largest player (from current seventh) in cancer medicine, which contributed about $2.5 billion of sales in 2008. At present, many of its products under clinical trial are for cancer treatment and six more will be added from the acquisition of Wyeth.

A number of factors such as high unmet need, favorable demographics, increased life expectancy and aging population are responsible for the renewed interest in this area. The anti-cancer drug market value is expected to grow to $85 billion in 2013 from $67 billion in 2008. Leading products for cancer therapy (fifth-largest therapeutic class globally) include MabThera/Rituxan, Herceptin and Avastin (of Roche).

Pfizer intends to exit the areas of heart disease, obesity and bone health in order to commit more resources to the treatment of oncology, pain, inflammation, diabetes, Alzheimer’s and schizophrenia.  These are the areas that the company believes where it will be able to take leading position. Wyeth also has some complementary products and research.

Pfizer has established a separate business unit focused specifically on oncology as management expects this area to offer significant opportunities for future growth.  The Oncology Business Unit has been established to expedite the launches of novel oncology agents and focus research efforts on cancers common in Asia.  While the business unit will have a global focus, they will have a significant interest in emerging markets as Pfizer believes this to be a region that has substantial unmet needs.

We have a Hold recommendation on the stock, based on our reservations whether Wyeth will provide the opportunity to grow revenue in the long-term, the significant reduction in the company’s net cash balance and the substantially lower-than-expected financial guidance for 2009.

Invitrogen provides life science technologies for disease research, drug discovery and commercial bio-production through more than 4,700 scientists in 70 countries around the world.

The company produces 35,000 products and services that support academic and government research institutions, and has been involved in stem cell research, the discovery of the AIDs virus, and advancements in cancer treatment.

IVGN has two segments: BioDiscovery and Cell Systems. When it combines with Applied Biosystems, the company will focus on uncovering links between genes and illnesses.

In the merger, Applied Biosystems' shareholders will receive $38 per share distributed as 55% in Invitrogen common stock and 45% in cash. However, shareholders will also have the option of requesting all stock or all cash.

Invitrogen Grows Revenues by 14.3% in the Second Quarter

Invitrogen has been operating on all cylinders going into the ABI buyout. The company recently surprised on second quarter estimates by 19.30% as revenues rose 14.3%.

Both of the company's segments saw revenue growth with Cell Systems seeing a 16% increase over 2007 to $115 million. BioDiscovery wasn't far behind, as it grew revenues by 13.6%. Even excluding currency translation, growth was still 6.5% in the BioDiscovery segment.

Europe saw the largest gains, as revenue jumped 24%. Asia Pacific also saw an increase of 22%.

Stability in a Rough Market

Invitrogen is the furthest you can get from a financial or a commodities stock. While volatility continues in those sectors, IVGN is posting earnings surprises. It recently surprised for the fourth consecutive quarter and its average surprise was 18.62% over that period.

Consensus estimates have not changed in the last 2 months. Third quarter estimates call for 58 cents up from 56 cents. For the full year, estimates remain at $2.59 up from $2.43 in the last 60 days.

Invitrogen is a Zacks #1 Rank (Strong Buy) stock. It has a forward P/E of 15.16. The company reports third quarter earnings on Nov 4. The Applied Biosystems buyout is expected to be completed by the end of 2008.

"IVGN" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Invitrogen provides life science technologies for disease research, drug discovery and commercial bio-production through more than 4,700 scientists in 70 countries around the world.

The company produces 35,000 products and services that support academic and government research institutions, and has been involved in stem cell research, the discovery of the AIDs virus, and advancements in cancer treatment.

IVGN has two segments: BioDiscovery and Cell Systems. When it combines with Applied Biosystems, the company will focus on uncovering links between genes and illnesses.

In the merger, Applied Biosystems' shareholders will receive $38 per share distributed as 55% in Invitrogen common stock and 45% in cash. However, shareholders will also have the option of requesting all stock or all cash.

Invitrogen Grows Revenues by 14.3% in the Second Quarter

Invitrogen has been operating on all cylinders going into the ABI buyout. The company recently surprised on second quarter estimates by 19.30% as revenues rose 14.3%.

Both of the company's segments saw revenue growth with Cell Systems seeing a 16% increase over 2007 to $115 million. BioDiscovery wasn't far behind, as it grew revenues by 13.6%. Even excluding currency translation, growth was still 6.5% in the BioDiscovery segment.

Europe saw the largest gains, as revenue jumped 24%. Asia Pacific also saw an increase of 22%.

Stability in a Rough Market

Invitrogen is the furthest you can get from a financial or a commodities stock. While volatility continues in those sectors, IVGN is posting earnings surprises. It recently surprised for the fourth consecutive quarter and its average surprise was 18.62% over that period.

Consensus estimates have not changed in the last 2 months. Third quarter estimates call for 58 cents up from 56 cents. For the full year, estimates remain at $2.59 up from $2.43 in the last 60 days.

Invitrogen is a Zacks #1 Rank (Strong Buy) stock. It has a forward P/E of 15.16. The company reports third quarter earnings on Nov 4. The Applied Biosystems buyout is expected to be completed by the end of 2008.

"IVGN" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Our recommendation is based on the company’s attractive and unique medley of compounds which represent solid market potential. The company has developed the Protectan and the Curaxin series of compounds based on the concept of apoptosis or, programmed cell death. These compounds may find usage in a wide range of markets from cancer treatment to biodefense to tissue protection.

These compounds may also double up as a second-line treatment for patients failing treatment with G-CSF and aid in reducing the side effects associated with cancer treatment. Additionally, the safety profile exhibited by these compounds in preclinical and animal studies along with the expedited development status granted to them further enhances our conviction in the future prospects of the company. We expect the company to launch one of these compounds in 2010.

We believe that valuation-wise, the stock offers significant long-term gains. The company is uniquely positioned, with little or no competition for the Protection series of compounds. Additionally, given their unique mechanism of action, Curaxins have demonstrated the ability to be effective against various cancer types. We arrive at our target price of $6 by applying a P/S [price-to-shares] multiple of 8x to the 2011 revenue of $32.35 million, discounted back at 25 percent for 3 years.

Read the full analyst report on CBLI