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Biotech / Medical : Pharmacia Corp. a future biotech powerhouse? -- Ignore unavailable to you. Want to Upgrade?

To: Jack Hartmann who wrote (24)	9/12/2000 3:45:46 PM
From: SteveR	Read Replies (1) \| Respond to of 35

Re: Pharmacia Unit Execute Reaps Looks like the CEO of the future Monsanto is bullish on the stock. Does anyone have any information on when the IPO will happen? SteveR

To: Jack Hartmann who wrote (24)	10/19/2000 8:33:09 AM
From: Jack Hartmann	Read Replies (2) \| Respond to of 35

IPO Brings Monsanto Back From The Dead Mark Lewis, Forbes.com, 10.18.00, 4:33 PM ET NEW YORK - Those mad scientists at Pharmacia hit the trading button on their $700 million Frankenfood IPO today, and the creature stood up and walked. Monsanto (nyse: MON) returned to the Big Board after a brief retirement. The St. Louis biotech concern was bought by New Jersey-based drug giant Pharmacia (nyse: PHA) only last spring. Pharmacia has already absorbed Monsanto's pharmaceutical business, but shed up to 16% of the more controversial agricultural unit in yesterday's offering. A total of 35 million shares began trading today, and underwriters have the option to sell an additional 5.25 million shares. And that may just be the first bite. For tax purposes related to the merger, Pharmacia can't sell more than 20% of Monsanto stock on the public market just yet. Monsanto was priced to move: at $20 per share, just below its original target of $21 to $24. Back of the envelope calculations put the value of this company at roughly one times 1999 revenue of $5.25 billion, on which it earned $150 million. "Agriculture has been weak for several years," says Mark Ravera, an analyst at Mehta Partners. Even at a bargain basement price, the offering didn't exactly pop. The stock closed out its first day of trading up 7.50% to $21.50, in an admittedly down trading day Many pharmaceutical companies are eager to divest themselves of nonstrategic, slower-growth assets. Novartis (nyse: NVS) and Astrazeneca (nyse: AZN) are planning to spin off their agriculture businesses and merge them into a new company, to be called Syngenta. And analysts expect Pharmacia to divest the rest of the company's stake in Monsanto when it's allowed to. Some investors may balk at buying into trouble, what with all the controversy over bio-engineered foods. Consumer resistance to the so-called Frankenfoods, particularly in Europe, has cast a pall over the sector for years. Last month, Aventis (nyse: AVE) took its StarLink brand of genetically engineered corn seed off the market after the corn was found in some taco shells sold by Kraft Foods, a subsidiary of Philip Morris (nyse: MO). The product is not approved for human consumption, although it is unlikely that it poses any danger to people who eat it. But the prospects for agriculture companies are beginning to brighten, says Laurie Haber, an analyst for New Vernon Associates, and Monsanto "is doing much better than all the other companies." The slow-but-steady growth of the agriculture sector just might entice investors weary of the wild ride of growth stocks. Despite the Frankenfood concerns, the Monsanto name "is not going to cause too many problems," Ravera says. Not even on the eve of Halloween. forbes.com Jack