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Biotech / Medical : Ligand (LGND) Breakout! -- Ignore unavailable to you. Want to Upgrade?

To: Machaon who wrote (19159)	4/17/1998 12:19:00 PM
From: tonyt	Read Replies (1) \| Respond to of 32384

Speaking of 'predictable', looks like the MM's are having trouble finding buyers -- the ask was just lowered to 14 9/16's.

To: Machaon who wrote (19159)	4/17/1998 12:59:00 PM
From: Henry Niman	Respond to of 32384

Speaking of predictions, here's what Dow Jones had to say about the big boys: Dow Jones Newswires -- April 17, 1998 U.K. Drug Stocks Weaker As Valuations Come Under Scrutiny LONDON (Dow Jones)--Drug stocks have been hit by a solid dose of reality Friday, as investor attention gradually swings away from mega-mergers and back to the more mundane - organic growth prospects. Around 0945 GMT, shares in Glaxo Wellcome PLC (GLX) are down 33 pence, or 2.0%, to 1640 pence, SmithKline Beecham PLC (SBH) has lost 4 pence to 721 pence and Zeneca Group PLC (ZEN) is down a hefty 51 pence, or 2.0%, to 2524 pence. While the declines are partly due to weakness in the overall market, analysts say less than inspiring drug updates in recent days from SmithKline and Merck & Co. (MRK) of the U.S. also haven't helped. 'They're all on very high valuations at the moment,' said Robin Gilbert, an analyst at Panmure Gordon. 'They've been pushed up enormously and I think now it's time for a bit of a rest period.' At an research & development presentation in London Thursday, SmithKline Beecham's Chief Operating Officer Jean-Pierre Garnier sought to hose down recent merger speculation surrounding the company. Garnier told reporters the company's main priority is organic growth, adding he isn't concerned that SmithKline's shares are coming off their recent lofty highs. 'I think a lot of the speculative money has gone out of our stock, and frankly I'm happy about it,' he said. 'I don't want people in our stock for two weeks. We're after the long-term investors.' But analysts were generally uninspired by the company's pipeline of new drugs. 'It wasn't a terribly sparkling presentation,' said Panmure Gordon's Gilbert. 'Their angle is that they have products coming through longer term, but short term we need to see something also.' Meanwhile, a first-quarter profit result by Merck also brought analysts back to earth somewhat. The results, while only slightly below expectations, showed weaker-than-expected growth in certain key drugs. That forced analysts to reassess their forecasts for Merck and had an impact on the U.S. drugs sector as a whole. Shares in Merck slipped 4 2/16 to 119 6/16 in New York Thursday, with fellow pharmaceutical companies Bristol-Myers Squibb Co. (BMY), American Home Products Corp. (AHP) and Johnson & Johnson (JNJ) among those to follow suit. The latest declines continue a week-long retracement in the sector. While analysts and fund managers remain excited about drug companies' average growth rates of up to 15%, they warn huge price/earnings ratio valuations are bound to create volatility. One U.S.-based analyst noted that average PE/ratios for drug companies in the early 1990s were around 12 times forecast earnings compared with an average of 16 times for the S&P 500 stock index. Now, most big drug stocks are trading at 30 times earnings or higher. Setting the pace is Pfizer Inc. (PFE) of the U.S., currently trading at around 56 times forecast earnings. 'I think these sorts of valuations can probably be sustained because this is such an exciting sector,' the analyst said. 'The real question is whether we can go any higher from here.'