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Wednesday, October 04, 2006

MAD MONEY Re-Cap (Oct. 3, 2006) Buy ARNA, ARRS; Sell DIVX

Cramer on last night's MAD MONEY discussed his new favorite biotech play.

Cramer gave a backgrounder: he said on Jan 11 his Zymogenetics (ZYMO) pick is now up 15% and he still likes it. He also discussed Myogen (MYOG) because it is being acquired by Gilead (GILD) and he picked MYOG to be bought. He wanted to look for another Myogen.

Cramer has a new favorite name in biotech development is Arena Pharmaceuticals (ARNA). He said Arena has a weight loss drug in their pipeline, and it should be a huge revenue generator. He said it isn't just because of obesity, but he says people are going to take it just to look better too. He said this drug in Phase III does not have side effects of other obesity drug companies.

After Cramer discussed this it popped 7% after-hours. It had a market cap of $603 million as of the $12.75 close. He did note ahead of his call not to trade it right after he discussed it in after-hours because you'll get robbed.

Cramer was also positive on Amgen (AMGN) and Genentech (DNA).

Cramer said he would still like DivX (DIVX) but you have to ring the register since it is up 20% in a week.

Cramer now said he likes Arris (ARRS), but he knows it has been a disappointment. He said they are a play on this triple Play conversion for cable offerings. He said it is actually a "Worst of Breed" as it is behind Motorola and Cisco and either could kill Arris. He said the trend is so strong that you'll make money even on the worst of breed pick.

Jon C. Ogg

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