Here is what the SD Union Tribune has to say about the tracking stock:
uniontrib.com
Note that one has to select the Business section on the left then select "more business news" at the bottom then page down to Local Stocks to select the article on Agouron. (See below)
LOCAL STOCKS
Agouron to set new course for oncology division
By Don Bauder
November 22, 1998
Agouron Pharmaceuticals will ask shareholders on Dec. 16 to approve the creation of a separate company for its oncology division.
"This means that up to $50 million in research and development expenses will drop off the core division's income statement," says Jim McCamant of the Medical Technology Stock Letter in Berkeley.
Some sales and administrative expenses should move to the new company, too, which should help Agouron's stock price, McCamant says.
One share in the oncology division will be issued for every two shares of Agouron common, and the oncology stock should trade in the $8 to $11 range.
Initially, Agouron's stock price might drop $4 to $5.50, but not for long, says McCamant, who believes that Agouron is a buy under $40.
Elise T. Wang of PaineWebber says that Agouron's Viracept enjoyed one of the most successful launches in the history of pharmaceuticals.
Viracept has 33 percent of the HIV protease inhibitor market and is in first place in U.S. dollar sales and total prescriptions, Wang says. And that's against competition such as Merck, Roche and Abbott.
PaineWebber rates the biotech stock a buy and continues to rate it as one of the firm's "Analysts' Best Calls" issues.
Not so safe?
Even San Diego's seemingly safest stock, Safeskin, has fallen into dangerous territory. The stock has been more than halved, even though it is helped by having its manufacturing in low-wage, weak-currency nations.
Melissa Wilmoth of Salomon Smith Barney has downgraded Safeskin from a buy to a neutral. Earnings per share estimates have been lowered for next year to $1.22 from the earlier $1.29 and for 2000 to $1.46 from $1.61.
"Negative trends in accounts receivable and inventories prompt us to take a cautious stance on Safeskin going forward," says the analyst, who wants to see how the next few quarters turn out before she turns bullish again.
However, Standard & Poor's Outlook publication included Safeskin in its list of 30 companies that should enjoy strong earnings gains next year. S&P is looking for Safeskin to earn $1.01 a share this year and $1.25 next year.
S&P rates stocks from one star (lowest) to five stars (highest). Safeskin merits four stars.
Copyright 1998 Union-Tribune Publishing Co.
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