Rx DRUGS OVER THE INTERNET
Advanced Health (ADVH) found out just how edgy investors
can be when an analyst reduced fourth-quarter revenue projections for
the health-care management company. The stock tumbled--from 14 a share
to 10--right after the analyst made the move on Dec. 27. By Jan. 13,
Advanced Health, which had traded as high as 16 7/8 on Dec. 3, had
slumped a bit more, to 9.
The analyst, Jason Rosenbluth of the San Francisco investment firm
Volpe Welty, tried to reassure investors that the company, which
provides doctors with integrated management services, including quick
clinical and insurance information on patients, should be judged on
earnings growth, not revenues. He was sticking, he said, to projections
of 48 cents a share for 1997 and 99 cents for 1998. And his 12-month
target for the price stays at 23.
He argues that the stock's decline provides a ''terrific buying
opportunity'' because of Advanced Health's brightening prospects. Here's
why: Advanced Health has become the first such outfit to offer online
prescription services, linking doctors with pharmacies via the Internet.
Its electronic prescription-writing service, called Script Writer, lets
physicians write prescriptions on-line and file them immediately with a
pharmacy. The patient's prescription history is also made available
online.
On Jan. 14, Advanced Health signed a pact with
Physicians Online to
market the service, initially through its 135,000 members. ''The
agreement positions Advanced Health as a leading player in the
doctor-Internet technology arena,'' says Kathy Miner, an analyst at
Cowen, who also is high on the stock. She expects the company to
announce several deals, including strategic alliances with larger
companies. One deal believed to be forthcoming is for another large
health-care company to buy a stake in Advanced Health.
BY GENE G. MARCIAL
|
