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Biotech / Medical : Monsanto Co. -- Ignore unavailable to you. Want to Upgrade?

To: Anthony Wong who wrote (752)	12/10/1998 2:16:00 PM
From: jopawa	Respond to of 2539

Thursday December 10, 11:55 am Eastern Time Merck eases after lower-than-expected '99 guidance By Ransdell Pierson NEW YORK, Dec 10 (Reuters) - Shares of Merck & Co (NYSE:MRK - news) slipped Thursday following lower-than-expected 1999 earnings guidance given a day earlier by company chief executive Raymond Gilmartin. Merck, whose shares fell 6-3/4 on Wednesday, was off another 2-5/8 to 149-1/4 in morning trade Thursday. Gilmartin told analysts at Merck's annual business briefing Wednesday he was confident the company would deliver 1998 diluted earnings per share within the range of $4.27 to $4.34 that was the consensus forecast of analysts polled by First Call. For 1999, Gilmartin said he was confident diluted earnings per share would be between $4.85 and $4.95. That entire range was below the First Call consensus forecast of $4.97 for 1999. Wall Street analysts had widely varying reactions to the Merck presentation, ranging from disappointment to glee. Le Anne Zhao, a drug analyst for Southeast Research Partners, said Merck's 1999 per-share earnings would be about six cents higher if not for the fact that Merck is now adding 700 sales people to its 4,000-person U.S. sales force to bolster sales of newer drugs. Merck said Wednesday that 600 of the new salespeople would focus on primary care doctors and help support the sale next year of the company's new painkiller, Vioxx, a potential blockbuster drug now awaiting U.S. marketing approval. The Whitehouse Station, N.J., company said the other new salespeople would promote Merck's flagship anti-cholesterol drug Zocor and make sales to hospitals. Merck also said it would increase its research and development budget to $2.1 billion in 1999, up 14 percent from 1998 levels. ''Merck is expanding its sales force and its research effort to build for the future and maintain consistent (longer-term) earnings,'' Zhao said, adding she believed the expenses required to achieve those ends justified somewhat lower 1999 earnings. Hambrecht & Quist drug analyst Alex Zisson said Gilmartin's 1999 earnings guidance was ''the only negative note'' at Merck's all-day business briefing and no doubt the cause of its sliding share price. He said although Merck presented highly positive safety and efficacy data about Vioxx, some analysts were a bit disappointed the company did not unveil any new promising drugs in the company pipeline. Morgan Stanley drug analyst Paul Brooke on Thursday described the Merck meeting as ''disappointing'' and reduced his own 1999 diluted per share earnings guidance to $4.95 from $5.05. Brooke, who has a neutral rating on Merck, trimmed his 2000 earnings per share forecast to $5.65 from $5.75. Warburg Dillon Read analyst Jerome Brimeyer cut his rating on Merck to hold from buy, adding the stock look fairly valued considering the lack of ''significant upside earnings or fundamental surprises.'' Lehman Brothers analyst Anthony Butler, who stuck to his outperform rating on Merck, told Reuters he believed the company made a compelling presentation Wednesday on Vioxx and its key newer drugs. ''The real swinger was Vioxx,'' said Butler. He said that if approved, the drug's package insert label might include more-favorable safety data than a related pain drug developed by Monsanto Co (NYSE:MTC - news), Celebrex, which is also awaiting approval from the U.S. Food and Drug Administration. Gruntal & Co analyst David Saks raised his rating on Merck to strong buy from buy, saying the company had fed Wall Street ''new product excitement.''