Executive Summary

Ketchum (up 3-1/8 to 22-1/2) and Block (up 3 to 35-1/2) led all issues in June on the Monthly "F-D-C" Index of O-T-C stock issues. Since April, Ketchum's stock has soared 6-5/8. The whslr's. market valuation is up 45% from the close of 1984, to $24.3 mil. With the current wave of acquisitions in the drug whsle. business, Ketchum issued a statement mid-month asserting there are no "undisclosed events" to justify the recent stock increase. Although 19 of the 38 stocks on the Index advanced, with 16 declining, and three unchanged, the O-T-C Composite lost ground for only the second time in 1985. The Index lost ground due to point-or-more losses by Cetus (1-1/2 to 10-3/4), Enzo (1-1/4 to 12-1/4), Nelson R&D (1-1/4 to 7); Natl. Patent (1-3/8 to 13-5/8) and Jeffrey Martin (1-1/8 to 5-3/4), as well as fractional drops by heavily-weighted Beecham (7/8 to 4-1/8) and Glaxo (3/8 to 15-7/8). Generic companies, led by Zenith (up 2 to 23), LyphoMed (up 1-3/4 to 22-3/4) and Mylan up (1-1/4 to 24) continued to perform strongly. Zenith is the top point gainer, with 16-1/2, among all issues during the first six months of the year. In that time period, the company's stock valuation jumped over 250% to $236 mil. (See box below). In the first half, LyphoMed's valuation is up 145% to nearly $228 mil., Par up 131.9% to $124 mil., and Reid-Provident (up 2 to 6-5/8) up 120.8% to 46.3 mil. LyphoMed's stock received a boost during the month when the firm announced the purchase of Invenex Labs from Life Technologies. Based on 1984 pro forma sales, the acquisition will create an over $60 mil. hospital generic business. During the month Reid-Provident completed a merger with Rowell Labs. Several other Pharmaceutical issues, fared well in June, including Paco (up 1-7/8 to 15-1/2) and Viratek (up 1-1/4 to 18-1/4). In its first month on the Index, Moore Medical (formerly Optel) gained 1-1/8 tp 18-5/8. The New Britain, Conn.-based whslr. began trading on the AMEX on May 23. The company, which includes the H.L. Moore Drug Exchange, had unaudited net income of $935,000 for the first quarter ended March 30 on sales of $33.0 mil. (FOOTNOTE) Charts omitted.