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Biotech / Medical : wla(warner lambert) -- Ignore unavailable to you. Want to Upgrade?

To: KENNETH R SANDERS who wrote (492)	1/27/1999 5:49:00 AM
From: Robert Scott	Read Replies (2) \| Respond to of 942

If you liked WLA yesterday, you like it even more today. If you didn't like it yesterday, there is no question it is a stronger company today. I wouldn't be surprised to actually see the stock move higher! Only problem I see is that the stockholders of AGPH may not approve the merger with such a small premium. However, fact that WLA can buy almost 20% of the company & $60M fee is a nice fall back if the transaction doesn't go through.

To: KENNETH R SANDERS who wrote (492)	1/27/1999 11:38:00 PM
From: Ibexx	Respond to of 942

Kenneth and thread, As I said yesterday shortly after the announcement, this acquisition of Agouron sounded like a super deal and I did add significantly to my WLA position at the open. Now the analysts apparently agreed with me: <g> ________________ Wednesday January 27, 10:21 pm Eastern Time Warner-Lambert/Agouron match seen as win/win deal By Ransdell Pierson NEW YORK, Jan 27 (Reuters) - Investors on Wednesday signaled their support for Warner-Lambert Co.'s (NYSE:WLA - news) planned acquisition of Agouron Pharmaceuticals Inc. (Nasdaq:AGPH - news) by bidding up the shares of both companies, an enthusiasm matched by most Wall Street analysts. Agouron shares closed up $2.31 at $59.12 on the Nasdaq Wednesday, while Warner-Lambert rose $3.62 to $72.12 on the New York Stock Exchange. New Jersey-based Warner-Lambert late Tuesday said it signed a definitive agreement to buy Agouron for $2.1 billion in stock. Each share of Agouron would be exchanged for about $60 worth of Warner-Lambert stock under the tax-free, pooling-of- interests transaction. Warner-Lambert said purchase of Agouron would allow it to acquire eight promising experimental oncology and virology drugs without diluting its planned 1999 per-share earnings growth of 30 percent. Agouron markets Viracept, the best-selling protease inhibitor against the HIV virus that causes AIDS, which accounted for most of the company's fiscal-year 1998 revenues of $467 million. ''It's a great deal for both companies, which gives Warner- Lambert a good AIDS franchise consisting of Viracept and other AIDS drugs Agouron has in development,'' said Lehman Brothers analyst Dr. Eric Ende. He said Agouron's other anti-HIV drugs include a non- nucleoside reverse transcriptase inhibitor in Phase II trials and Remune, a killed and altered HIV virus being tested in Phase III trials to see if it will stimulate the immune systems of infected patients. ''In addition to Agouron's pipeline, Warner-Lambert will get Agouron's research business, which is one of the best in all of biotech,'' Ende said. Ende said Agouron was a leader in rational drug design, a technology that involves first discovering the shape of a biological target and then developing small particles with the right size and shape to jam or otherwise disrupt the target. ''The merger is a good deal for both sides,'' said BT Alex Brown drug analyst Kevin Tang," who added that Viracept's annual sales of about $400 million could grow to $600 million over the next few years and thereby provide more cash flow to Warner-Lambert. Tang said one of the most interesting drugs in Agouron's pipeline is a nasal spray designed to block replication of the rhinovirus, which causes the common cold. ''It is quite promising and could be very exciting,'' Tang said of the drug, now in Phase I trials in England. Given the fact that Agouron must share its U.S. profits on Viracept equally with development partner Japan Tobacco Inc. , Tang said Warner-Lambert's $2.1 billion offer for Agouron is about eight times Agouron's annual revenues. ''It's a fair price because pharmaceutical companies usually sell for about seven times revenues,'' he added. But Jim McCamant, editor of the Medical Technology Stock Letter, believed the purchase price was ''a little low'' and should have been about $65 to $70 in view of Agouron's research strengths, pipeline and ever-increasing Viracept sales. ''On the other hand, there's no denying Agouron has been a good investment,'' McCamant said, recalling that he had first recommended the stock in 1990 when it was trading for $2 per share, on a split-adjusted basis. Dr. Charles Engelberg, an analyst for AmeriCal Securities in San Francisco, said Agouron stands to be the real winner if the merger is approved by its shareholders. He said Agouron's only approved drug, Viracept, was facing growing competition in the marketplace, including expected U.S. launches of Glaxo Wellcome Plc's (quote from Yahoo! UK & Ireland: GLXO.L) protease inhibitor, Amprenavir. ''Agouron was a company at a crossroads, potentially in big, big trouble,'' Engelberg said. Ibexx