Warner-Lambert Executives Sell at High: Insider Focus (Update1)
Bloomberg News
August 14, 1998, 3:50 p.m. ET
Warner-Lambert Executives Sell at High: Insider Focus (Update1)
(Updates with company comment in 5th, 6th paragraphs.)
Morris Plains, New Jersey, Aug. 14 (Bloomberg) -- Warner-
Lambert Co. executives, led by President Lodewijk de Vink, sold
$34 million in stock in July as rising sales of two of new
blockbuster drugs helped push shares to record highs.
De Vink, who is considered the top candidate to succeed
Chief Executive Melvin Goodes, used options to buy 263,835 shares
on July 23. He sold the shares the same day, making a $19 million
profit.
Warner-Lambert has soared on sales of the cholesterol
reducer Lipitor and the diabetes pill Rezulin, both introduced in
1997. Warner-Lambert, which also makes Listerine mouthwash,
Trident gum and Schick razors, touched a record high 85 15/16 on
July 20 after reporting that second-quarter profit rose 46
percent to $338 million. In the quarter, Lipitor had sales of
$533 million.
''You never like to see it,'' said Linda Miller, who manages
John Hancock's $200 million Global RX Fund, which holds some
Warner-Lambert shares. ''But the stock's had a huge run and it
would be unusual not to see some selling.''
The sales, said company spokesman Stephen Mock, are
''routine.''
''We view stock options as part of our compensation
package,'' he said.
Morris Plains, New Jersey-based Warner-Lambert rose 63
percent in the past year as Lipitor sales passed $1 billion in
its first 12-months on the market. The drug, one of about 25 with
$1 billion or more in annual sales, helped turn Warner-Lambert
into an industry superstar after years as an also-ran.
U.S. regulators cracked down on Warner-Lambert in 1993 after
finding drug manufacturing quality problems, forcing the company
to shut much of its production. Many analysts and investors
expected the company to shed its pharmaceutical unit and focus on
consumer goods.
Persevering
Instead, Warner-Lambert's CEO Goodes persevered with
development of Lipitor. Few predicted that drug would become a
blockbuster so quickly. Two of the world's largest drugmakers,
Merck & Co. and Bristol-Myers Squibb Co. already had sold similar
medications.
Lipitor quickly stole market share from rival products, such
as Merck's Zocor, as doctors turned to Lipitor for its potential
to reduce cholesterol with lower dosages than other drugs. Goodes
also pushed for development of Rezulin, a diabetes drug licensed
from Japan's Sankyo Co. Rezulin had second-quarter sales of $226
million.
''He virtually bet the shop on Lipitor and Rezulin and he
won his bet,'' said Neil Sweig, an analyst with Southeast
Research Partners, who has a ''buy'' rating on the stock.
Goodes, 63, must retire in April 2000, following a company
policy that requires officers to step down at 65.
De Vink, 53, who also is Warner-Lambert's chief operating
officer, is expected to succeed him. ''He's the chosen
successor,'' Sweig said.
Sales
De Vink joined Warner-Lambert in 1988 as president of
international operations. In 1991, he was elected to the board.
De Vink earlier was a senior vice president at rival drugmaker
Schering-Plough Corp. based in Madison, New Jersey.
De Vink used options to buy 226,635 shares on July 23 at
$6.17 a share and 37,200 shares at $12.28 a share. He sold
261,000 shares at $80.15 a share and 2,835 shares at $79.44 a
share. De Vink still holds almost 39,000 shares.
Other sales include:
Richard Keelty, Warner-Lambert's vice president of public
affairs, used options to buy 12,000 shares at $11.07 and 19,200
shares at $11.51 a share on July 21. He sold 31,200 shares the
same day for $81.88 each, making a profit of $2.2 million.
S. Morgan Morton, the executive in charge of the consumer
health-care sector, which includes Listerine and Sudafed sinus
medicine, used options to buy 6,057 shares at $9.08 and 1,500
shares at $12.28 on July 21. He then sold 7,500 shares at $83.06
and 57 shares at $82.25, making a profit of $554,220.
Philip Gross, the executive in charge of Warner-Lambert's
technology and supply purchases worldwide, used options to buy
24,450 shares at $11.51 a share on July 21 and sold them at
$81.88 a share, making a profit of $1.7 million. The next day, he
used options to buy another 24,450 shares at $11.51 a share and
sold them at $81.24 a share, making a profit of $1.7 million.
Gregory Johnson, general counsel, used options to buy 30,110
at $11.07 a share and 7,500 at $12.28 a share on July 21. He sold
the shares that day at $81.88 a share to $82.31, making a profit
of $2.7 million.
William Woodson, treasurer, used options to buy 3,000 shares
at $9.08 a share on July 21 and sold them at $81.37, making a
profit of $216,870.
Harold Oberkfell, the executive in charge of Warner-
Lambert's operations in Asia, used options to buy 19,200 shares
at $9.08 a share on July 21. He then sold them at $82.03 a share,
making a profit of $1.4 million.
Rae Paltiel, corporate secretary, used options to buy 6,900
shares at $9.08 a share on July 21. Paltiel sold them for $81.88
a share the same day, making a profit of $502,320.
--Kerry Dooley in the Princeton newsroom (609) 279-4016/jmg |
