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Pastimes : son of T/FIF -- Ignore unavailable to you. Want to Upgrade?

To: scaram(o)uche who wrote (194)	9/28/1999 8:38:00 PM
From: LLCF	Read Replies (1) \| Respond to of 673

From the "duhhh 20% too late" file: Company Press Release SOURCE: Banc of America Securities Banc of America Securities Analyst Remains Cautious on Large Cap Pharmaceutical Companies SAN FRANCISCO, Sept. 28 /PRNewswire/ -- The following is being issued by Banc of America Securities, a member of the National Association of Securities Dealers, CRD number 26091: With the Amex Pharmaceutical Index down 10% since the end of 1998, and a number of issues plaguing the pharmaceutical industry, we believe there will be a number of increasingly important drivers of earnings growth for pharmaceutical companies, a Banc of America Securities industry analyst told investors. ''When numerous blockbuster drugs were developed between 1987-1998 the impact on earnings for these pharmaceutical companies was significant,'' said Banc of America Securities pharmaceutical analyst Leonard S. Yaffe, M.D. ''The last decade has seen record growth, but as the pipeline becomes less promising, and significant patents begin to expire, we remain cautious on this industry,'' said Yaffe. Yaffe's comments came at the 29th Annual Banc of America Securities' Investment Conference, which runs from September 27 through October 1 at the Ritz-Carlton Hotel in San Francisco. This former Montgomery Securities' conference bears a new name but boasts a program that lives up to its impressive reputation. The five-day conference features 250 presentations from companies that are driving the Business Services, Consumer & Retail, Energy, Entertainment, Media & Telecom, Financial Services, Health Care, Industrial Growth, Real Estate & Lodging and Technology industries. Yaffe said the definition of a ''blockbuster'' drug is one that treats a chronic condition, may have fewer side effects and can generate significant ongoing prescription volumes. Past blockbusters generated $1 billion in annual U.S. sales, but Yaffe believes that over the next three to five years there are just a few drugs in the pipeline with ''blockbuster'' potential. ''We are also looking at significant upcoming patent expiration with an estimated $34 billion in drugs facing patent expiration in the next five years, as compared to only $17 billion in the last 10 years,'' says Yaffe. ''These expiring patents represent more than 30 percent of the U.S. pharmaceutical market.'' Pharmaceutical companies are also under increasing pressure to generate blockbuster products because of pricing pressure from managed care, increasing numbers of lower-cost generic alternatives, through the institution of more restrictive formularies and greater competition within key therapeutic categories. Looking ahead, Yaffe sees some catalysts that may improve the long-term outlook for this sector. With the U.S. Drug Index trading at a P/E ratio in a range of 0.74 -1.87x the S&P 500 since 1993, a decline in the premium to 10% or less would likely result in a revision of our underweight recommendation of this sector. Consolidation could build strength in this sector driven by the lowering of SG&A expense ratios, a potential change in merger accounting rules, and other strategic benefits. Yaffe also sees Medicare reform and an expansion of coverage as a catalyst that could improve the outlook for this sector. Banc of America Securities LLC (BAS), a subsidiary of Bank of America Corporation, is a full-service investment bank and brokerage firm. With principal offices in San Francisco, New York City and Charlotte, BAS employs more than 4,000 associates in offices around the country, and with affiliates, offers capabilities worldwide. Bank of America Corporation, with $614 billion in total assets, is the holding company for one of the largest banks in the U.S., with operations in 21 states and the District of Columbia. SOURCE: Banc of America Securities DAK