Biotech Values

[DewDiligence]

>>so your advising to stay away even with this drop?<<

MATK is having a CC tomorrow morning. I don’t think I can offer any further advice until I hear it; however, I do think the company has a major credibility problem and that usually means it’s best to steer clear.

In today’s PR, they are burying a bombshell inside a veneer, which is quite disingenuous. The veneer message is that wholesale inventory levels are too high and this will cause somewhat lowered sales. This is bad, but not that bad -- inventory adjustments happen quite often to drug and biotech companies (e.g. it just happened to FRX).

The bombshell message – which is the main reason for the 41% drop in AH trading – is that the guidance MATK has been giving investors for several years about attainable penetration rates for their enhanced baby formula and related products is hogwash.