Access Update- #35

I can’t believe that a week later, we’re still waiting for the government to
approve a bailout package. I hate the idea of taxpayers coming to the rescue
and the stifling of free markets, but the situation is very serious and something
needs to be done to restore confidence in the markets.

Until that occurs, I don’t expect any of the stocks in our portfolio to trade based
on the fundamentals. As fear and hope alternately grip the overall market, I
expect the Access portfolio to behave in tandem with the wider population of
stocks.

The good news is that we’re not in these stocks for the expected performance
over the next 30 or even 60 days. These are companies we believe will produce
extraordinary returns over the next 12-18 months.

Regardless of what is going on in the financial markets, if Synta
Pharmaceuticals’ (Nasdaq: SNTA) elesclomol proves safe and effective in
treating late stage melanoma, the stock is going to surge. Perhaps not as much
as it might in a bull market, but the returns should still be spectacular.

The same is true for all of our names.

This week Cytori Therapeutics (Nasdaq: CYTX) announced some clinical
results reported by two surgeons, one of which, Dr. Michael Scheflan, was on
our conference call back in May. If you’re new to Access and haven’t yet
listened to the CYTX call, you can do so here.

The two physicians agreed that the use of Cytori’s Celution System improved
volume retention of tissue compared to traditional fat grafts with no side effects
or infections. We expect Celution to continue to gain traction around Europe
and Asia in the near term.

New Reco Soon

We are working diligently on our new recommendation, which should be ready
in a couple of weeks. It’s an exciting and non-traditional biotech play that
should be immune from any financial crises. We’ll keep you posted and let you
know when we’re closer to issuing the report.

Busy Biotech

Meanwhile, the biotech sector is alive and well. I came across some interesting
statistics that I’d like to share.

Currently, there are 633 biotech drugs in development, twice the number in
2004.

With big pharma ready to lose patents on $60 billion worth of drugs by 2011,
these guys are on a mission to acquire and partner with biotech companies with
promising drugs. And unlike all the troubled financial companies we’ve been
hearing about, these pharmas are flush with cash.

Pfizer (NYSE: PFE) has over $26 billion in cash on its books. Novartis
(NYSE: NVS) has $16 billion and Merck (NYSE: MRK) has $10 billion.
Xcelerated Profits Report pick Bristol-Myers Squibb (NYSE: BMY) sports over
$4 billion in cash on its books.

Like a junkie going through withdrawal, these companies need drugs and will
do what it takes to get them. I expect the biotech sector (as well as all of
healthcare) to continue to outperform the overall market over the next twelve
months. And you know that we’ll find the stocks that will lead the charge.

Have a great weekend.

Marc Lichtenfeld
Director of Research
Access Research Group

Stock
Symbol
Current Price
Comments

Synta Pharmaceuticals
SNTA
$7.84
Buy up to $13.00

ViroPharma
VPHM
$13.42
Buy up to $12.50

Cytori Therapeutics
CYTX
$5.48
Buy up to $8.00

Electro-Optical Sciences
MELA
$5.80
Buy up to $5.75