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MARION's 90% STOCK APPRECIATION IN FIRST HALF

Executive Summary

MARION's 90% STOCK APPRECIATION IN FIRST HALF continued the firm's rapid run-up and kept Marion in the top group of market performers among publicly traded drug companies. With outside estimates on Cardizem and Carafate predicting sales growth in the just-finished year at about 60% and 95%, respectively, the firm continues to draw glowing comments and steady investment from the financial community. In late May, for example, Cowen analyst James Keeney strongly portrayed the company as an "inexpensive" purchase despite a 50% premium to the market based on per share earnings estimates for fiscal 1988. Marion's "ultra-strong earnings per share growth," Keeney declared, "compares favorably with any potential cyclical earnings rebound." [EDITORS' NOTE: Marion's continuing rapid market gains confounded preparation of a mid-year stock performance chart, in the July 6 issue of "The Pink Sheet." The chart and accompanying story, failed to take into consideration Marion's two-for-one split during the first half of the year. That type of error is easily caught prior to publication -- except in cases when a company is doubles in value. The company's stock has split two-for-one four times in just over four years.] Analysts are looking ahead to new indications -- such as hypertension and myocardial reinfarction -- for Cardizem to continue that product's sales momentum. Keeney notes potential competition from new calcium channel blockers but dismisses the impact. "We do not anticipate release of new chemical entity Ca-blockers in the U.S. much before calendar 1989 given that Bayer [and Roche, nitrendipine] and Sandoz [isradepine] drugs have yet to be reviewed before FDA's cardiorenal drugs advisory group, while Syntex's drug [nicardipine] received a poor review before this committee in September 1986."
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