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

To: R. Ramesh who wrote (770)	5/20/1999 3:15:00 PM
From: Anthony Wong	Respond to of 942

Ramesh, the merger rumors may come to nothing, but it's the catalyst in turning the stock price up. We need some action, man!

To: R. Ramesh who wrote (770)	5/20/1999 9:30:00 PM
From: Anthony Wong	Read Replies (1) \| Respond to of 942

Schering-Plough/Warner-Lambert union seen doubtful By Ransdell Pierson NEW YORK, May 20 (Reuters) - Wall Street analysts said they would be surprised if Warner-Lambert Co <WLA.N> and Schering-Plough Corp <SGP.N> were engaged in serious merger talks as stated in a report published earlier Thursday. Bloomberg News on Thursday quoted an anonymous source as saying the two U.S. drug makers had been holding talks for two years and that the discussions had intensified in recent weeks. The report said no agreement was pending, however. Officials of both companies declined to comment on the report. Schering-Plough is the eighth largest U.S. drugmaker, and Warner-Lambert is number nine. "As a matter of policy, we do not comment on speculation about market matters," said Warner-Lambert spokesperson Carol Goodrich. Schering-Plough spokesman William O'Donnell also declined to comment, citing company policy. Hambrecht & Quist drug analyst Alex Zisson said both companies were riding high financially, making it unlikely either would need to seek out a merger partner. Warner-Lambert's diluted earnings per share jumped 40 percent last year thanks to sizzling sales of its flagship drug, the popular cholesterol-lowering Lipitor, with 1998 sales of $2.2 billion. Schering-Plough's 1998 per-share earnings jumped 22 percent thanks mainly to the popular antihistamine Claritin, which had 1998 sales of $2.3 billion. Zisson said he doubted Warner-Lambert's new chief executive officer Lodewijk de Vink would make such a bold merger move only weeks after taking over from retiring CEO Melvin Goodes. "Normally, the first act of a new CEO is not to go out and sell the company, but usually to set out a plan to build his own company," Zisson said. "And Schering-Plough has always said it had no reason to merge as long as it was growing faster than its industry peers," Zisson added. Warner-Lambert, which earlier this week completed its $2.1 billion acquisition of California biotech company Agouron Pharmaceuticals Inc, is predicting per-share earnings growth of 30 percent in 1999 and 20 percent in 2000. De Vink told Reuters on April 27, days before taking the helm, that the company had the financial wherewithal to buy other companies and products. But he declined to say if he had any immediate acquisition plans. Brown Brothers Harriman drug analyst Mike Krensavage said he believed the world's large drug makers will continue a recent trend of merging to achieve cost savings, economies of scale and to combine their research and development budgets. "But Warner-Lambert and Schering-Plough are not now on the top of my list of likely merger players," Krensavage said, adding both were unlikely to risk the corporate culture clashes that often accompany mergers. "I imagine that a lot of drug companies are talking to each other on a routine basis in order to weigh (merger) possibilities," Krensavage said. It would not be surprising if Warner-Lambert and Schering-Plough had been in discussions, Krensavage said, but he doubted they were in advanced talks. Warner-Lambert closed up $1.25 to $68.12 on Thursday, while Schering-Plough rose 69 cents to $48.19. Heavy purchases of May and June call options on Warner-Lambert were seen Thursday at the Chicago Board Options Exchange. Purchases of the options, giving investors the right to buy shares in May at $70 per share and in June at $75, indicate investors believe Warner-Lambert's share price will rise above those levels. Investors often buy call options of companies expected to be taken over by a larger company. Warner Lambert's market capitalization is $57 billion, compared to Schering-Plough's $70 billion.