Should Santa Stuff the Stocking with Sony Stock Certificates?

By Natalie Pace, CEO, iSophia

Sony's Home of the Future

nvestors were shocked to learn this quarter that Sony management had managed to fall behind in the gaming and audio division (remember the old Sony Walkman?), but all indications are that Sony, a seasoned champion in the electronics world, may be incorporating Muhammed Ali's Rope-a-Dope trick, taking a beating this quarter, in order to win in the final round. And while the company is against the ropes, during this quarter's downturn and reduced annual projections, they'll likely get in a few solid punches, especially during the holiday season. Sony Walkman and Playstation 2 hardware and software sales may be anemic in December, especially against X-Box and the upcoming release of Halo 2 (the best action game ever made, according to my teenager), but in the gifts for guys department, Sony electronics sales are poised to take the season. SONY still slaughters the competition in television, digital still cameras and camcorders sales, with 16.4%, 17.9% and 42.1% of the market share, respectively, and ranks number two, behind Toshiba, in sales of DVD players, at 14.3%. PC notebook sales place fifth, behind HP, Dell, Toshiba and IBM. Retailers report that digital electronic products are flying off the shelves, and 54% of consumers surveyed said that they will be browsing for electronics gifts this year.

Will strong DVD and digital camera sales be enough to stop Sony's slide?
Unfortunately, outdated product isn't the only brute that forced Sony to adjust their annual outlook for fiscal year ending March 31, 2004 downward. According to the company's quarterly report, "sales and operating income exceeded July expectations," but "gains from increased sales have been offset by a change in our exchange rate assumptions for the second half of the fiscal year." Bush's policy for the weak dollar, which according to C. Fred Bergsten, Director of the Institute of International Economics "has to continue to be weak in order to keep foreign investment coming," is expected to continue to negatively impact the strong holiday sales and bottom line of the world's favorite brandÑSony.

Sony's shares take a hit, along with European and Japanese ADRs, every time headlines explode on the declining dollar. Last week, on November 19^th, shares of Sony declined again, on continued worries that the American dollar will erode foreign profits. The Zach's Average Brokerage Rating for Sony is a Moderate Sell, per www.MoneyCentral.msn.com. Institutional investment in Sony is sitting in the corner, stalled at 9.4%, while troubled American multi-media giants, Time Warner Inc. and Disney, still weigh in at the powerhouse 60%+ institutional investment levels. As we enter a season that is bound to team with conflicting headlinesÑstrong sales, weak dollarÑSony's share price gains and losses are likely to be quite a wild ride. (Investors who get seasick easily might want to wait on shore until the tides become more predictable.)

Did Sony drop the joystick?
Sony's gaming software shipments have been reduced by 10 million units. If you read the future strictly by the bottom line, Play Station 2 is last year's news, a death sentence in the rapid-fire innovation world of gaming geeks, where software like Duck Hunter quickly become relics in the Pong graveyard. However, the story told in the most recent quarterly report filed with the SEC on 10.23.03 sounds much more like the Sony American consumers have come to respect and love over the past few decades. "Operating income decreased significantly in the Game segment due to an increase in research and development expenses, primarily for semiconductors designed for use in future businesses, and due to a decrease in sales." R&D for future businesses? Just what does Sony have on the drawing board?

It appears that Sony is not so short-sighted as to abandon the field they dominated just a few short years back, when parents were bidding beyond five hundred bucks for Play Station 2 gaming consoles to put under the tree for their tweens. Sony executives have poured their money and R&D into what they are calling the Ubiquitous "Value" Network, where the gaming console has Internet capacity and also multi-tasks as a DVD player, a digital still photo/video projector and a television remote control. This new gaming console of the future is called the PSX, and is touted to be the first commercial product in which Electronics and Game converge. Similarly, the old "Walkman" will become the PSP, a portable entertainment system that is designed to compete with iPod and retail for just $60.

Sony president and COO Kunitake Ando describes the vision this way. "By connecting AV, PC and mobile devices, we will create a huge platform for the creation and enjoyment of rich digital content." The various toys capable of linking into this interconnectivity include digital cameras, cellular phones, flat screen televisions, PCs, a home server and an online music service to compete with iMusic, each with online, wireless capacity, and access to Sony Entertainment's first-run features and televised shows. The American nuclear home accommodates the separate digital needs of each family member, with Junior battling friends in cyber space gaming scenarios, Pops screening the latest heavyweight bout, Mom making dinner reservations online and Sis chatting on instant messenger platformsÑand each of these personal devices can be synced up, linked up, filmed, photographed, viewed on a flat screen and/or downloaded through the family home server.

What's the star date of this future family phenomenon? 2010? The PSX and PSP both go on sale in Japan this year, with the US and European product launch slated to be in 2004. By 2006, Sony projects an increase in operating profit to 10% (from 2002's 4%), thanks to cost cuts, streamlining, new product and strategic partnerships with companies like Intel, Samsung, Bertelsmann BMG and Ericsson.

Looks good on paper and Power Point, but will the Japanese, European and American consumers really embrace this vision? Research shows that Americans can hardly wait. According to Taylor Nelson Sofres Intersearch's study of 1,030 US adults, ages 18+, 47% of those surveyed selected plasma TV models as the #1 trend consumers are looking to become more affordable and mainstream in the next five years. 47% also said that they would like to upgrade their primary TV with new technology. "Our vision for Sony remains the sameÑthat of being the strongest consumer brandÑas we promote the convergence of Electronics and Game, Music and Pictures." Nobuyuki Idei, Chairman and Group CEO, Sony.

Hummm. So should Santa put Sony stock certificates in your stocking?
Holiday sales this year are expected to be up at least 12%. Holiday online sales alone, according to Jupiter Research, are expected to exceed $16.8 billion, up 21.7% from last year, to round out a whopping Q4 2003 with $17.5 billion in online retail sales (Retail Forward). According to the Department of Commerce, e-commerce sales for 3Q 2003 were $13.291 billion, with the grand total of 3Q 2003 retail sales in at $872.5 billion. What's the hottest gift item this season? CoolSavings reports that the most popular item to shop for online this year will be electronics (56% of households). With Sony's top-line market share in consumer electronics, like camcorders, digital cameras, DVD players and televisions, sales may turn up even more robust than Sony executives are predicting.

Of course, even with an expected seasonal earnings surprise and assuming that their new products will enjoy wild success in the 2004 launch, there are still a few problems in Sony, beyond the dollar/yen war. So far, it is the Financial Services, not the Electronics, division that is the Cinderella story of Sony. In fact, Sony is planning an IPO for the Sony Financial Services in 2006, and, in anticipation of that time, the company intends to separate and scrutinize the balance sheets of the Financial Services and Electronics divisions "thus making apparent the value" of the two distinctly different businesses. This could mean trouble in Tinseltown, should Sir Howard Stringer's Sony Film unit continue to turn in disappointing numbers. According to Sony's 10.23.2003 6-K, "In the Pictures segment, an operating loss was recorded due to the disappointing performance of certain theatrical releases." (Can you say Gigli?) Radio, Sony's newest release, has only brought in $47.1 million as of 11.17.2003, and is losing traction, though Spiderman 2 is hoped to be the blockbuster in 2004 that the first one was in 2002.

Certainly Sony Entertainment has not yet achieved the customer satisfaction levels that the electronics divisions have earned with consumers. Americans rated Sony #1 in Harris Interactive's best brands survey FOR THE 4^TH YEAR IN A ROW, in an online survey conducted between 6.16.2003 and 6.22.2003. Over the past nine years, since Harris began asking this question, Sony has never fallen lower than the third best brand with consumers.

Of all of the MEGA MEDIA companies, including Disney, News Corp., Vivendi Universal, Time Warner Inc., Viacom and InteractiveCorp., Sony has the most sales by far ($62.3 billion for Fiscal Year ending 3.31.03), with one of the lowest market capitalizations ($31.25 billion). Should Sony's virtual life catch fire in an emerging digital, wireless world, there's plenty of upside if a tsunami of institutional participation washes in, from the low-tide of 9.4%. Finally, with Gateway, Dell and Canon in the flat screen TV markets, and iPod in the personal digital music field, prices are likely to become consumer friendly in a relatively quick period. Research and history both show that when prices become affordable on technology that consumers are dying to have, sales can reach the distant galaxies. Sony may well be the starship to take us there, though if you buy a ticket now, you may find yourself waiting a few months for others to join you.

Remarks by Nobuyuki Idei, Chairman and Group CEO of Sony Corporation:

During the second quarter ended September 30, 2003, sales and operating income in the Game segment decreased, but we saw the beginnings of a recovery in the Electronics segment, where we are improving the competitiveness of our products. Looking forward to the second half of the fiscal year, we will increase our range of product offerings in advance of the year-end holiday selling season, and we will continue to aggressively expand our business. We will also begin to implement, in earnest, fixed cost reductions (including headcount reductions) and will work to achieve further growth through a renewed concentration of management resources on important areas of our business and an improvement in the competitiveness of our products. (Form 6-K, www.sec.gov/edgar. Sony Corp. 10.23.03).

The question may boil down to this. Can the world's best brand win back the support of institutional investments with great products alone, or will the war between the dollar and yen continue to scare off investors, particularly institutional investors, to perceived safer ground? Will early bird investors get the worm or simply a bumpy ride down the global boulevard of broken dreams? When picking the winner, it doesn't hurt to pick the champion, especially if the company has been training hard, pouring money into the latest R&D and trimming off the fat, in order to win the race.

Full Disclosure: Natalie Pace owns shares of Sony Corporation (SNE: NYSE)

Stock Report Card: Sony, Disney, News Corporation, Viacom, Time Warner, Vivendi.

They all have movies out in the hottest season, but which ticket is the best for your portfolio?

iacom, News Corporation and InteractiveCorp. have each increased their bottom lineÑincome--while Sony's profitability has taken a severe slide, largely on the weakening dollar, with a side order of weak sales in their gaming and motion picture sectors. As consumer confidence improves and technology advances entice the American consumer into transforming their living rooms from dial-up to digital and Wi-Fi, which of these media giants are poised to lead the new broadband/cable dominated market? Which companies will benefit from holiday blockbuster films?

Check out the two attached report cards, one from June and one from November, to make your own decisions about which companies are faltering, and which are on the fast track to improved products and operations.

Tis the Season for the Santa Rally,

Tis the Season for the Santa Rally, by Paul Woods. Pwoods@OdysseyAdvisors.com. 310.568.4710

Paul Woods CEO, Odyssey Advisors Pwoods@OdysseyAdvisors.com 310.568.4710

ne of the things professional investors grudgingly accept as they gain experience is that the stock market is mostly unpredictable. We can't get investors in at the bottom and out at the top. When we try, we sometimes end up doing the reverse. Yes, there's no shortage of systems or market letters out there that claim amazing results and dazzling track records. Reality, however, is that if you spend a lot of money for one of these, the only thing you can count on is that someone besides you will be a bit richer.

Until someone develops a crystal ball that works, predicting the stock market is going to remain extremely difficult. That being said, however, many experienced investors still enter certain times of the year with a bounce in their step, while other periods produce a queasy feeling in the pit of their stomach. There is a lot of evidence out there that indicates some times of the year tend to be more rewarding than others for investors.

We looked at monthly returns from 1971 to be able to compare the S&P 500 with the Nasdaq. In a nutshell, July through October is usually the worst time of the year to own stocks. The golden period in the stock market usually starts in November and ends after January, but returns usually remain positive through June. Following are average monthly returns from March 1971 through October 2003É

By month, average returns were as followsÉ

Interestingly, this appears to be a global pattern. Historic returns on European and Japanese stocks tend to show the same pattern of high returns in the winter and low returns in the summer. Psychologists have come up with tortured explanations for this phenomenon that involve daylight periods and psychology, but it may not be that complicated.

Once third quarter earnings are reported, investors usually begin to look at earnings expectations for the following year. As investors begin to gain more confidence that earnings will be higher in a year, money begins to flow into stocks again. In addition, cash usually flows into the stock market from bonuses and contributions to retirement plans in the first few months of each year.

Summer is usually a holding period. There's not much in the way of new cash flowing into the equity markets, and it's still too early to get a handle on the following year. Most people go on vacation sometime during this period, and the stock market tends to get the blahs. For what it's worth, September tends to be the worst. It's the only month that usually produces negative returns for both the S&P 500 and the Nasdaq.

We also looked at the volatility of monthly returns, and one thing stood out. Halloween belongs in October, because that's the scariest month for investors. Notable stock market crashes have occurred in 1929 and 1987, but there have been enough good years to offset the bad ones. Overall, however, October produces the widest range of returns. The only thing investors know for certain is that October will usually be an exciting month. There's usually a sigh of relief when it's over.

NASDAQ stocks showed a few differences versus the S&P 500. Both tended to have lousy Septembers. However, for the NASDAQ, July is typically also a down month. A partial offset was that NASDAQ stocks showed very high returns in January. The explanation for this is known as the January effect. The NASDAQ is made up of stocks in more small companies. These tend to be riskier companies and those that are down usually come under selling pressure at the end of each year as investors take losses to offset gains for tax purposes. Once the year ends and the tax selling pressure is lifted, these stocks usually recover the following January.

To avoid volatility and below-average returns, it's tempting to get out of the stock market in June and get back in November. However, it's important not to get too cute. If investors are diversified and have some exposure to both markets, average returns are still much higher than the current monthly returns on cash equivalents. If trading costs and short-term capital gains taxes are factored into the mix, doing nothing is usually a pretty good strategy in most years.

iSophia note: Short-term capital gains occur when you buy and sell a stock within a 12-month period. You are taxed at your personal tax rate, rather than the reduced 15% capital gains tax rate. This can be a significant hit on your earnings. Day-traders take note!

One of the things that makes the current rally in stock prices look convincing is that stocks continued to climb in the summer of 2003, even though there was a bit of the usual backsliding in September. July through October produced an 8.45% return in the S&P 500 and a 19.27% return in the NASDAQ. Now, we're entering a period of historically high returns. At the same time, earnings estimates are being revised upward and stock valuations still appear reasonable relative to interest rates. Without making a prediction, let's just say that it wouldn't be too surprising to see stock prices keep climbing. Remember, Ôtis the season.

Sexy Interest Rates, A Strong Currency, & Stormy Politics, Oh Canada! .

By Meri Ann Beck-Woods, CFO, Odyssey Advisors. 310.568.4711. mabwoods@OdysseyAdvisors.com.

Meri Anne Beck-Woods CFO, Odyssey Advisors mabwoods@OdysseyAdvisors.com 310.568.4711

n November 19, 2003, the Bank of Canada sold $3billion in Canadian dollars ($2.3 billion in U.S. dollars) of 28 day Treasury Bills maturing Dec 18, 2003, at an average yield of 2.73 percent and a price of 99.79132. On the same day the comparison to a U.S. Treasury bill maturing on Dec 18, 2003 had a yield of .93 percent, a 1.80 percent difference. Meanwhile 5 year Canadian bonds yielded 4.085 percent and 10-year Canadian bonds yielded 4.817 percent compared to U.S. 5 year yields at 3.22 percent and 10 year yields at 4.24 percent. The biggest difference is in short-term rates and that's because the Bank of Canada's target interest rate for overnight lending among commercial banks is 2.75 percent, 1.75 percentage points more than the comparable U.S. rate. The Bank of Canada has lowered interest rates to help spur the economy but not as much or as fast as the U.S. and is expected to hold them steady on Dec 2^nd when they next meet to decide on short-term rates.

For investors in the U.S., Canadian bonds are attractive relative to U.S. Treasuries, but, before you dive into the higher yields, you need information on the United States-Canada Income Tax Treaty. There are tax consequences related to Canadians buying U.S. stocks and bonds and Americans buying Canadian stocks and bonds. Generally for dividend income, the U.S. and Canada have agreed to tax each other's citizens at the rate of 15%. For Canadian source income received by U.S. residents, the Canadian income tax generally may not be more than 10%. For help on U.S. & Canadian taxes go to http://www.irs.gov/index.html. In the search bar put in Canadian Taxes, and then go to frequently asked questions. One of the references, which you can print out, is IRS publication 597 Information of the United States-Canada Income Tax Treaty. This will give you more detailed information on the sale of other assets, capital gains and such. You can also get information on Canadian taxation from the Canada Customs and Revenue Agency, which is their version of the IRS. The International Tax Services Office can be contacted at 1-800-267-5177 or on the Internet at www.ccra.gc.ca

Meanwhile the Canadian Dollar has gone up as much as 21 percent this year versus the U.S. dollar and could go higher. While this has helped Canadian bond sales to international investors, it has also raised the price of exports from Canada, impeding growth. The Canadian dollar recently reached a level of 77.02 U.S. cents (a U.S. dollar buys C$1.3043) after the favorable report on U.S. housing was released. The Canadian currency could strengthen by year -end to trade at around 78 U.S. cents. Some economists say Canada's dollar stands to gain further this year, because traders will eventually sell U.S. dollars over concern the U.S. may not be able to attract the $1.52 billion required each day to offset the deficit in its current-account, the broadest measure of trade and investment. During November, the Canadian dollar reached its' highest level since 1993.

1993 was also the year current Prime Minister Jean Chrétien's Liberals came to power. Chrétien, 69, Canada's Prime Minister for the last decade, will step down between now and February of 2004, and be replaced by the new head of the Liberal Party Paul Martin. Chrétien and Martin, who was Finance Minister, are credited with crafting fiscal budgets for Canada that ended 27 years of deficits in 1998. That began a string of surpluses that's set to extend to a record seven years, in the fiscal year ending March 31. The government also introduced a record C$100 billion tax cut in 2001, helping to make Canada's economy the fastest-growing of the Group of Seven industrialized nations.

Martin literally ran over the competition for the job of Party Leader. Chrétien fired Martin from the cabinet in June 2002 after Martin refused to end his campaign for the leadership. Chrétien officially started the race 15 months ago by announcing he would retire. John Manley, the current finance minister, dropped out in July after sparring with Martin in six leadership debates, saying Martin couldn't be beaten. Industry Minister Allan Rock disbanded his campaign in January after five years of raising funds. After forcing his two strongest leadership rivals to back out, Martin raised 10 times more money than his lone rival, Heritage Minister Sheila Copps.

Martin takes over a party that holds 170 of 301 seats in Canada's Parliament. That gives him the power to start implementing an agenda that he says will include a review of government spending and lower the size of the national debt to 25 percent of the country's C1.1 trillion gross domestic product. It now stands at about 40 percent of GDP. In addition he has said he wants to give cities more money for public transit and low-income housing, and suggested giving them a portion of the federal gas tax. His other spending priorities include more health-care money to reduce wait times at hospitals and funding for research.

Relations are not good between Chrétien and Martin, and Chrétien has said he would have left in the year 2000 if Martin and his supporters had not pushed so hard to get him out. Martin 65, who is said to have the support of 90 percent of the voters, has not always had good relations with the banks either. He denied merger requests from four of the country's biggest banks in 1998, quashing Royal Bank of Canada's bid to buy Bank of Montreal and Canadian Imperial Bank of Commerce's attempt to combine with Toronto-Dominion. All of these banks may try again as they have said they need to merge to compete with U.S. and European rivals as the industry consolidates.

In Parliament, Martin has pledged to give elected Liberal legislators who aren't in the cabinet more say over lawmaking. He also wants to improve relations with the U.S. and President George W. Bush, which soured amid trade disputes over lumber and wheat and because of Chrétien's refusal to back the U.S.-led invasion of Iraq. The U.S. and Canadian economies are closely linked because about 85 percent of Canadian exports are sold to U.S. customers. This represents about a third of Canada's economy.

In Canada, the manufacturing industry is set to accelerate as the U.S. economy improves. The Canadian economy shrank 0.7 percent in August. By comparison, the U.S. economy expanded at a 8.2 percent annualized rate in the third quarter, the fastest in almost two decades. The U.S. economy is expected to slow to a 4 percent rate in the fourth quarter. Now, the Canadian economy is beginning to shake off the temporary effects of a slowdown in tourism and shopping, after an outbreak of severe acute respiratory syndrome killed 44 people in the Toronto area by mid-August. Also the discovery of mad cow disease in one Alberta animal, forest fires on the west coast, and a power shortage in Ontario had a slowing effect, which is not expected to continue.

While I'm not a strong proponent of international investing, Canada has some attractive features. A fiscally responsible government with budget surpluses instead of deficits, a strong currency, relatively attractive interest rates, and vast natural resources. All in all Canada is not a bad place to put money.

Day-Trade, Profit-Take or Let It ride?

Profit strategies and market predictions from the pros can be the holiday gift that keeps on givingÉ Don't even think about profit taking until you read themÉ

1. Tax Burden of Day Trading. Did you know that, in the United States, if you buy and sell within the same twelve-month period, you will be taxed at your personal income rate, instead of the 15% capital gains rate? Don't be caught unaware in the short-term gains tax bracket. The first call you should make, before the broker or the click and trade, should be to your accountant to understand the tax consequences of your actions! Save half of your gains or more just by knowing, understanding and applying the tax laws of your country and state! Visit: www.irs.gov in the U.S. or www.ccra.gc.ca in Canada to get more information.
2. "I believe the dollar will continue to come down, due to the huge trade deficit... The dollar has to continue to be weak in order to keep foreign investment coming." C. Fred Bergsten, Director, Institute of International Economics. With a weak dollar, foreign ADRs (European, Japanese and other firms) have been suffering. A weak dollar makes US goods more competitive (cheaper) in the world market. Anyone interested in futures or currency trading based upon Mr. Bergsten's (and other economists) predictions should understand the risks before you dive in.
3. Short selling: Unlike regular investing, where the most you can lose is 100% of your investment, with short-selling your losses are unlimited. For example, if you sell short a stock at $6.50 and that stock rises to $85.00, you are legally required to buy back the same number of shares you sold short at that price. 100 shares at $6.50 means you took in $650, but now it will cost you $8,500 to buy them back. That's a pretty hard punch in the wallet, if you were only planning to risk a few hundred bucks!
4. "Ride the coat tails of institutions. Even if they're wrong about the markets, they're right in the short term because they're driving it." Rance Mashek, President, SpreadTrader.com Five Point Star Trader System and nationally syndicated radio personality
5. "Fourth quarter earnings growth still appears to be underestimated and should bolster stock prices through year-end." Tobias Lebkovich, The Portfolio Strategist, www.SmithBarney.com
6. "We're growing the American economy and soon we'll be growing more jobs. Today's strong performance [7.2%GDP in 3Q 2003] shows the American economy is headed in the right direction thanks to President Bush's Jobs and Growth Agenda." Donald L. Evans, Secretary, Department of Commerce. On 11.24.2003, the Gross Domestic Product, a measure of all the goods and services produced in the U.S., was revised upwards, to 8.2% annual rate, according to the Commerce Department. This marked the best quarterly performance since a 9% surge in the first three months of 1984, according to Dow Jones. Woo Hoo!!
7. "One would expect the powerful rally seen so far this year to continue based on historical precedent...the NASDAQ Composite Index may still have much more upside potential." Tobias Lebkovich, The Portfolio Strategist, www.SmithBarney.com (10.10.2003)
8. "Economic improvement was something that the market has been aware of, and the primary concern in the marketplace is valuation. We pushed the NASDAQ back to the top end of the trading range earlier in the week." Steve Massocca, president, Pacific Growth Equities in SF, on November 8, 2003, reacting to the good news that unemployment fell to 6% and 126,000 jobs were added in October. It's always a good idea to make sure that you are not racing along with the bulls toward a bubble bursting. Check P/Es of your company and compare them with the sector AND with the average S&P P/E. If the P/E is above 30, you should have a good reason for buying in. (Predicted sharp increase in earnings, company renaissance, new company just starting to pay off debt, institutional investors planning to pour into the company, etc.) Remember that some sectors, like biotechnology, have higher P/Es than the rest of the markets.
9. Don't forget that we have elections next year. Amazing things happen in election years, including economic recoveries. We think the economy will start to do better by the end of the year. Paul Woods, Odyssey Advisors. This was Paul's prediction for the economy, back in July 2003.
10. Equity investors who saw the steep yield curve (5%) in April 1992 and bet on expansion were richly rewarded. The broad Russell 3000 index gained 20% over the next two years. www.smartmoney.com (The current bond yield curve is again "steep.") For more details on what, historically, the bond-yield curve means, click here:

http://www.smartmoney.com/onebond/index.cfm?story=yieldcurve

Do the above predictions and indicators, so many of them positive for continued strength in the markets, mean that the stock market will absolutely, beyond a doubt, continue to rally through the end of the year, and perhaps well into 2004? As the saying goes, there are no assurances except death and taxes. Certainly if there is a major terrorism attack, like the tragedy of 9.11.01, the markets will tumble far and fast. On the other hand, the recovery of the markets after a severe event tends to be quick and robust, within six monthsÉ

Biotech's Beauties:

Inamed and Medicis wooed the FDA Advisory Panel into recommending approval for two collagen competitorsÑRestalyne and Hylaform. Good news for Baby Boomer women who want to look 15 years younger!

eter Nicholson, Inamed's Vice President, Business Development, told iSophia, "[Inamed] is pleased with the panel recommendation.  Not an approval though, so we are still focused on working with the FDA until they reach their decision.  We will decide upon pricing [for Hylaform] once we get the approval and launch.  Have not provided projections yet and will likely wait until December or even later to do so."

Restalyne and Hylaform are two new products that are designed to compete with Collagen as "wrinkle-fillers," mostly in those nasty lines from the nose to the mouth. The beauty of Restalyne is that it has a long track record in Europe, lasts six months and is not animal-based (therefore no skin test is required). Hylaform has been on the market in Europe since 1996 and is sold in 30 countries (according to Reuters). Both Restalyne and Hylaform are made from hyaluronic acid, a complex sugar that is reportedly well tolerated by the body and gradually absorbed. Because Hylaform is made from rooster combs, the FDA panel of physicians recommended that patients be screened for allergies before being treated.

Will Restalyne or Hylaform make collagen obsolete? According to Michael Olding, a panelist from George Washington University School of Medicine, "When you look at the safety of this product [Restalyne] and compare it to the safety of the collagen product, this appears to be a much safer product." Hylaform, being based upon the same acid, has an equally safe reputation.

If Dr. Olding's observations are true and if the FDA approves Restalyne, Medicis, in particular, may have a hit on their hands. By eliminating the skin test required for both Hylaform and collagen, youth-seeking Baby Boomer women can get instant gratification with Restalyne, and instant gratification, especially in vanity purchases, usually means a big boost in sales.

How much money is on the line? According to Allergan, makers of Botox, net sales of Botox were $439.7 million this year, an increase of over 60% from 2002. The Fountain of Youth biotechnology companies are in a billion dollar business.

Calendar:

Galas, networking, benefits, seminars and special opportunities! Check out what's happening online at the Calendar section of the web site.

pecial Members Only Chat on Wednesday, December 17, 2003 at 8:45 a.m. - 9:15 a.m. PST. Natalie Pace, CEO, iSophia, will invite special money managers into the chat room to sing praises to the Santa rally, assuming that we all get what we want this holiday seasonÑa Stock Market Rally!! (And if we don't, then join us to complain about what went wrong with the crystal ball.)

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