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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Cary Salsberg who wrote (63934)	5/22/2002 10:45:28 AM
From: JSwanson	Read Replies (1) \| Respond to of 70976

You wrote: On the contrary, for the first time in my lifetime (my dad owned Pfizer in the 50s), the ethical pharmaceutical industry does not seem to be able to continue its growth through internally generated product. It is almost as if the industry has reached an area of diminishing returns just when demographics and research seem to herald a "golden age". I have a Valueline from 1974 on the Ethical Drug Industry that is contrary to your assertion. The title of the industry summary for this issue is Drug Stock Investing is Getting Riskier. It goes on to state: "Up until 1972 drug stocks maintained, by an large, a pretty steady uptrend. Since then, increasing pricing and regulatory pressures around the world have eroded investor enthusiasm for the industry. Moreover, a nervous stock market has reacted to bad news (or rumors of bad news) with a speed and intensity never before experienced. This response has been particularly pronounced because of (1) the hefty P/E multiples these stocks carry; (2) their large institutional following (closely related to factor number 1); and (3) the nature of the products sold." It goes on to point out problems regarding weak pipelines pointing out that "companies with the most fruitful R&D programs are the most likely to prosper" and "companies selling drugs coming off patent (or already off) will find it difficult to compete." The problems being experienced in the pharma business appear to be very similar to what was happening 30 year ago. My bet is that, like 30 years ago, a wave of consolidation and a refocusing of efforts will lead to new discoveries. Just my opinion, JS