GENERIC STOCKS CONTINUE THEIR ADVANCE DESPITE BROAD MARKET RETREAT
Executive Summary
Fueled by a spate of new product approvals and a constantly improving revenue picture, generic companies have caught and held the attention of investors in the first half of 1986. Generic issues were late joining the yearlong market rally, but they have shown a resilience of late in the market's recent downturn, with some moving toward historic highs as their brand name counterparts pulled back. Of the four exclusively generic companies on the "F-D-C" Weekly Index, three advanced during the week ended May 16, and one remained unchanged. Leading the gainers was Mylan (up 3-1/2 to 26-1/4), followed by Zenith (up 2-3/8 to 32-1/8) and Biocraft (up 1/8 to 10-3/4). Bolar was unchanged at 24-3/8. Mylan moved sharply on news of the companies recent ANDA approval for the antidepressant doxepin, which recently went off patient. Only two of the remaining companies on the Pharmaceutical Component -- Merck (up 2-1/4 to 182-1/8) and Marion (up 1/8 to 70-3/8) gained ground during the week. Merck, which traded as high as 187-1/2 on Wednesday, was a victim of profit taking the last two trading sessions. The runup on Merck stock may have been precipitated by a recent analyst report which valued the company in excess of $200 a share. Chart omitted.