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

To: Dan Spillane who wrote (1987)	4/27/1999 9:05:00 AM
From: jopawa	Respond to of 2539

Magic 25 Apr 26, 1999 Is Monsanto Looking to Sell or Spin-off of High-Flying G.D. Searle? Hot on the heels of earnings which, while beating estimates, still declined by 37.5% on a diluted basis, there is increased speculation that Monsanto (NYSE:MTC - news) is considering spinning off or selling its rapidly growing pharmaceutical unit, G.D. Searle. Why, you might ask, would Monsanto get rid of its fastest growing business, one which grew sales 55% on a quarter-quarter basis? The reason: It would reward shareholders as, according to drug analyst Hemant Shah, Seale could command a market value of as much as $40 billion compared to Monsanto's total market capitalization of $27 billion. (Much of Monsanto's enterprise value is tied up in its massive debt load). Simply put, Searle, with its flagship product Celebrex (estimated to grow to $2.1 billion in annual sales in the year 2000), can post excellent earnings if it were not continually dragged down by the huge debt and amortization costs associated with Monsanto's $8 billion acquisition spree in the crop biotechnology sector. Monsanto currently has over $8 billion in total debt and close to $5.8 billion in goodwill, a fact which cost the company $215 million in the most recent quarter. The weight of this burden is further evidenced by the fact that EBITDA coverage of interest expense fell to 4.4 times, down from 7.5 times in the prior year's quarter. In either scenario, be it a spin-off or sale, this move is good for Monsanto. In the case of a sale, assuming a conservative value of $20 billion, Monsanto could wipe out its debt, have sufficient cash to sustain its burn-rate and would be in the position to acquire additional companies to build its Life Sciences business, a stated goal of Montsanto's. In the case of a spin-off, assuming that Monsanto will retain a significant percentage of the stock, the company will benefit from the richer multiple which Searle will garner. While the possibility of either a sale or a spin-off is not definite, we're inclined to believe that it's very likely. Monsanto has repeatedly stated that it would like to move away from the pharmaceutical business and focus more on the Life Science sector. In addition, the fact that the possibility has been raised both on Bloomberg and in today's edition of The Wall Street Journal, makes it likely that "where there's smoke, there's fire". Investors obviously agree as they've pushed shares of Monsanto up $4.50 today to $46.75. Analyst: Will Frankenhoff Updated on 4/25/99 with MTC at $46.75 Recommended 11/16/98 at $40.56 -------------------------------------------------------------------------------- For more in-house professional stock analysis and commentary, visit us at Individual Investor Online. -------------------------------------------------------------------------------- Archives -------------------------------------------------------------------------------- Enter one or more ticker symbols, or you may look up the symbol by company name. Basic DayWatch Fundamentals Detailed Quotes Chart Research -------------------------------------------------------------------------------- Copyright © 1999 Yahoo! All Rights Reserved. Copyright © 1999 Individual Investor Online This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written permission of Individual Investor Online. See our Important Disclaimers and Legal Information. Data is provided for informational purposes only, and is not intended for trading purposes. Yahoo and Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. Questions or Comments?

To: Dan Spillane who wrote (1987)	4/27/1999 9:05:00 AM
From: jopawa	Respond to of 2539

Monday April 26, 8:03 pm Eastern Time INTERVIEW-China seen swiftly adopting transgenic cotton By Julie Vorman WASHINGTON, April 26 (Reuters) - China planted more than one million hectares of genetically modified cotton during the past year to improve crop yields, and is likely to boost that amount in the next planting season, Monsanto Co. (MTC - news) officials said on Monday. China's adoption of Monsanto's Bt cotton for about one-fourth of its crop is evidence that the use of genetically modified plants will continue to grow despite European opposition, they said. Monsanto's cotton is engineered to contain the bacterium Bacillus thuringiensis (Bt), which produces a toxin that kills bollworms, a major cause of crop losses. ''What really impresses me is not only the overall amount of acreage, but the fact that some 600,000 Chinese farmers decided to plant Bt cotton,'' Robert Fraley, co-president of Monsanto's agricultural sector, told Reuters in an interview. ''Biotechnology is high on China's priority list,'' Fraley said. ''We expect to see them continue to expand in this area.'' China has declined to comment on the nation's policy toward transgenic crops, with one agriculture ministry official recently calling it a ''state secret.'' China, with 1.2 billion people to feed, faces crop yields that lag far behind those of the developed world. China last year planted about 4.25 million hectares of cotton, according to U.S. Agriculture Department estimates. Bt cotton has increased U.S. crop yields by 8 to 10 percent, and boosted crops in China and other less-developed nations by as much as 50 percent, Fraley said. Fraley and a team of three other Monsanto scientists were in Washington to receive the national medal of technology from President Bill Clinton on Tuesday. They will be recognized for two decades of research that resulted in Roundup Ready soybeans, which will be planted on half of the 75 million U.S. soybean acres this year, according to analysts. Bt cotton is also expected to be used on more than half the U.S. cotton acreage planted in 1999. U.S. farmers' swift adoption of genetically modified organisms -- known in the industry as GMOs -- is evidence that the products are here to stay, despite complaints from some environmental groups, Fraley said. The European Union has been slow to approve new GMO crops, under pressure from activists who contend that health risks have not been fully researched. Several U.S. grain processors said earlier this month that they would not buy certain types of GMO corn from U.S. farmers until the types were approved by the European Union. ''These are the most carefully studied plants ever to exist in agriculture,'' said Stephen Rogers, head of biotechnology projects in Monsanto's European division. ''Each of more than 30 countries have conducted studies on the food and feed safety, environmental and pesticide risks of these plants, and they have been found completely safe.'' Labeling of GMO products and foods is likely to be ''one of the solutions'' to open up the European market, Fraley said. ''The free flow of trade in agriculture is important,'' he said. ''We cannot end up with one trading bloc controlling these products.'' Plant researchers at Monsanto and other companies hope to soon leap beyond genetic engineering that simply builds in better resistance to pests or disease. They envision designer crops in the future that will easily withstand drought, produce healthier cooking oils, provide more nutrients to animals, and manufacture enzymes and proteins for use in human drugs. ''The level of innovation is breathtaking,'' Fraley said. ''Monsanto alone expects to roll out at least 40 new products over the next two or three years.'' Among the new products will be likely be wheat engineered to resist fungal diseases, he said. GMO wheat has lagged behind corn, tomatoes, canola and other crops because it carries three copies of each gene and is more difficult to engineer. ''We're very optimistic about the opportunities with wheat,'' Fraley said. -------------------------------------------------------------------------------- More Quotes and News: Monsanto Co (NYSE:MTC - news) Related News Categories: chemicals, food/beverage, household/consumer, US Market News -------------------------------------------------------------------------------- Help -------------------------------------------------------------------------------- Copyright © 1999 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. See our Important Disclaimers and Legal Information. Questions or Comments?

To: Dan Spillane who wrote (1987)	4/27/1999 9:07:00 AM
From: jopawa	Read Replies (1) \| Respond to of 2539

Merck's double-digit growth may see rocky ride ABN Amro's Keeney: Vioxx sales over $1.3 billion 'difficult' By Stephanie O'Brien, CBS MarketWatch Last Update: 4:39 PM ET Apr 26, 1999 Movers & Shakers WHITEHOUSE STATION, N.J. (CBS.MW) -- Merck & Co. may struggle to maintain double-digit earnings growth next year, an ABN Amro analyst said Monday. In a note to clients, James Keeney said the U.S.' largest drug maker (MRK: news, msgs) doesn't appear to be maximizing sales of its new drugs. Keeney also said that Vioxx, a new pain reliever awaiting FDA approval for sale and for which Merck has high hopes, may not be able to generate sales strong enough to boost the company's growth rate significantly. Last week, the "super aspirin" Vioxx received backing from an advisory panel to the U.S. Food & Drug Administration. The panel voted to approve Vioxx for the treatment of arthritis and for acute pain. The FDA will decide at a later date whether to approve Vioxx for sale. The drug, from a class of medications known as COX-2 inhibitors, is aimed primarily at treating arthritis, but could treat other types of pain with fewer side effects, such as ulcers and internal bleeding. Sufferers of pain such as severe menstrual cramps or discomfort following dental or other surgery may have an alternative to prescription forms of non-steroidal anti-inflammatory drugs. Examples of those are naproxen, which is sold over-the-counter as Aleve, and ibuprofen, sold over-the-counter as Advil. Today on CBS MarketWatch London shares hit a fresh high while Europe surges EBay beats Wall Street by 3 cents G.E. of Britain to pay $4.5 billion for Fore Dell gains ground on Compaq 'Boring' U.K. firms make Web dollars More top stories... CBS MarketWatch Columns Updated: 4/27/99 7:55:20 AM ET Earlier this year, the FDA approved a COX-2 inhibitor manufactured and marketed by Monsanto Co.'s (MTC: news, msgs) G.D. Searle unit and Pfizer (PFE: news, msgs) under the name Celebrex. Analysts were watching to see if Vioxx's potency and safety profile is better than rival Celebrex, which has been hugely successful. The uses for Vioxx backed by the FDA panel may be narrower than Merck had hoped, Keeney said. "...Although denied by management, we believe that Merck may have been counting on a better label for gastrointestinal and kidney side effects for its pending Vioxx than was recommended last week by FDA's advisory meeting," Keeney said. Further, he said, a lack of differentiation between non-steroidal anti-inflammatory drugs' class-related side effects when compared with Celebrex may make it difficult for Merck to capture a dominant share of the market for arthritis drugs. "Consequently, sales of Merck's pending Vioxx product in 2000 may have difficulty exceeding $1.3 billion, as little differentiation in side effect labeling may slot it for use primarily in the short-term analgesic use market," Keeney said. At that level of Vioxx sales, with no other major new drugs scheduled for introduction in 2000, we estimate that Merck's EPS growth rate next year may struggle to maintain a double-digit rate," Keeney said. Shares of Merck fell 1 3/4 to 74. Other large-cap pharmaceuticals makers also fell. WLA NYSE Last Chg. 66 7/8 -1 % Chg. Vol. -1.47% 3,334,400 Day Lo. Day Hi. 65 3/8 68 1/16 Open Prev. 68 67 7/8 As of Apr 27/99 9:04 am ET Last Trade Apr 26/99 5:01 pm ET 20 MIN. DELAY Pfizer (PFE: news, msgs) was down 3 2/4 to 123 3/4; Schering-Plough (SGP: news, msgs) slipped 7/8 to 52 13/16; Johnson & Johnson (JNJ: news, msgs) fell 1 9/16 to 100 3/16.Warner-Lambert (WLA: news, msgs) fell 1 to 66 7/8. On Monday, the company posted first-quarter earnings that were a penny ahead of Wall Street's estimates. See full story. Bucking the trend, SmithKline Beecham (SBH: news, msgs) rose 2 3/16 to 69 9/16. Keeney said sales of $1 billion to $1.3 billion for Vioxx in 2000 may provide no lift to Merck's EPS growth. Stephanie O'Brien is a reporter for CBS MarketWatch. For more breaking news, visit our Front Page. Also, search our news archives: Ticker Keyword (For more options use our Advanced Search) CBSMW MarketPlace • Want the best mortgage rate around? Check out our loan center New! • Best Flower and Online Gift Shop: JustFlowers.com • Discover all kinds of fun, innovative gifts @ sharperimage.com • MarketWatch MarketPlace: Click to shop for great deals. Free Products/Trials • FREE 2 week AUDIO subscription to The Wall Street Journal! New! • Check out Baseline's free Company Report of the week. • Free trial subscriptions to investment newsletters. • Free annual reports for hundreds of companies. 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