Stock Market Chumps..........9-22-06

Advanced Analogic Technologies, Inc. (AATI)

Last Trade:	5.68
Trade Time:	1:15PM ET
Change:	1.42 (20.00%)

Shares of Advanced Analogic Technologies Inc. fell on Friday to their lowest level since listing more than a year ago, after the chip maker cut its quarterly outlook, prompting at least two brokerage rating downgrades.

The stock fell 18.31 percent to $5.80 in afternoon Nasdaq trade, after touching a year low of $5.75. The stock listed in August 2005 at $10.

Late Thursday, Advanced Analogic, which makes power management chips in audio devices and mobile phones, cut its third-quarter forecast citing falling sales in Korea and Taiwan and softness in the wireless handset market.

RATING CUTS

Analyst Quinn Bolton of Needham & Co. lowered his rating on the stock to "hold" from "buy".

He said the magnitude of Advanced Analogic's pre-announced revenue and profit shortfall for the second half of 2006 raises many questions regarding the company's business with Samsung Electronics Co. Ltd. <005930.ks> and LG Electronics <066570.ks>, which are its two largest customers.

The miss also highlights the risk associated with the company's concentration at the two Korean companies, which account for 50 percent of sales, the analyst added in a research note.

Bolton also said the uncertain revenue outlook together with Advanced Analogic's lawsuits with Linear Technology will pressure its shares in the near-term.

Analyst Michael Davies of Next Generation also downgraded his view to "neutral" from "buy".

Davies noted that Samsung, which accounted for 27 percent of Advanced Analogic's revenue in the second quarter of 2006, has faced challenges in the handset market and has been slow to order newer products such as the switching regulator until after a ruling on the dispute with Linear Technology.

The companies are disputing over patent infringement.

REDUCED OUTLOOK

On Thursday, Advanced Analogic said it expects a third-quarter loss of 4 cents to 6 cents a share, on revenue of about $19 million to $20 million.

The Sunnyvale, California-based company previously said it expected to report third-quarter earnings ranging between a loss of 1 cent a share to net income of 1 cent a share, on revenue of $22 million to $24 million.
Prior to the outlook announcement, analysts on average were expecting the company to earn 3 cents a share, excluding exceptional items, on revenue of $23.4 million, according to Reuters Estimates.

EPIX Pharmaceuticals Inc. (EPIX)

Last Trade:	4.32
Trade Time:	4:00PM ET
Change:	0.99 (18.64%)

Shares of Epix Pharmaceuticals (EPIX) were among health care stocks' losers Friday, plummeting 15.6% on disappointing study results of its experimental anxiety drug.

Epix Pharmaceuticals Inc. said on Thursday that early results from a pivotal-stage trial of its experimental treatment for general anxiety disorder show it does not work better than a placebo.

"Based on these top-line results, we plan to refocus our efforts away from anxiety to evaluate the benefit in depression more closely and assess opportunities for initiating a Phase 2 clinical trial in depression sooner than originally planned," Chief Executive Michael Kauffman said in a statement.

The company said the anxiety trial showed a trend in favor of patients treated with PRX-00023, but the outcome may have been affected by a higher than expected response in the placebo-treated patients.

Epix also said a preliminary review indicated that the treatment was well tolerated and that side effects, including impact on sexual function and sleep, in patients receiving PRX-00023 were similar to placebo.
Boston Scientific Corp. (BSX)

Last Trade:	14.85
Trade Time:	4:03PM ET
Change:	1.51 (9.23%)

Boston Scientific Corp. shares tumbled to a four-year low on Friday after the company issued a profit warning for the third quarter, prompting at least one major Wall Street firm to raise questions about the company's management and cash situation.

The late-Thursday profit warning sparked several broker downgrades and led to the biggest one-day share-price decline in about 5-1/2 years.

The sell-off reflects not just weaker-than-expected profits, but also concerns about an impending cash crunch, said Citigroup analyst Matt Dodds.

"Is there something worse lurking here? They've got a lot of debt and not a lot of wiggle room. This company is on a tight rope," said Dodds, who until this week was the only Wall Street analyst who had a "sell" rating on the stock.

The company was not immediately available to comment.

Boston Scientific earlier this year took on about $9 billion in debt to help pay for troubled cardiovascular device maker Guidant Corp.

Fueling investors' concerns was the lack of clarity about the company's long-term prospects.

The company is scheduled to report its third-quarter results on October 18 and will provide another update to Wall Street on November 6 when it holds an analyst meeting at its headquarters.

RELIANT ON TAXUS

The acquisition of Guidant, Dodds added, has served to make Boston Scientific more reliant on Taxus drug-coated stent sales. That market is slowing amid growing concerns that the newer generation of stents carry a higher risk of developing sometimes deadly blood clots.

"Where is the board?" he said. "This board has allowed this company to implode."

Late Thursday, the company said adjusted earnings excluding acquisition charges, third quarter sales and worldwide sales for its top-selling Taxus drug-coated stent would fall well short of estimates.

The stock was down $1.66, or 10.2 percent, at $14.70 in heavy midday New York Stock Exchange trade after touching a low of $14.45 earlier in the session.

Prudential Financial analyst Lawrence Biegelsen cut his investment rating to "underweight," citing deteriorating fundamentals, and lowered his share-price target to $14.

Banc of America, RBC Capital Markets, Morgan Stanley and

UBS also reduced their ratings, and Citigroup dropped its price target to $14 from $15. CIBC also cut its price target, to $28 from $29.

"The (implantable cardioverter defibrillators) and stent markets are each contracting, competition is increasing in stents, and on both sides of the business there are important outstanding issues to be resolved with the FDA," JP Morgan analyst Michael Weinstein wrote in a research note.

"This outlook must improve before the stock starts working again, and before the Street can gain any confidence that Boston Scientific has in it the ability to earn at least $1 a share," he added.