Pink Sheet is part of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call +44 (0) 20 3377 3183

Printed By

UsernamePublicRestriction
UsernamePublicRestriction

P. LEINER REBOUNDS WITH THREE-POINT MOVE IN FEBRUARY; BEGLEY PACES CHAINS

Executive Summary

The stock of vitamin supplier P. Leiner showed signs of rejuvenation in February, moving up three points to 9-1/2 during the month. The leap year closing left the issue at roughly the same trading price as in late October, but at only half of its July 1986 peak. Market support for the Torrance, California-based firm may have focused on the February acquisition of Vita-Fresh, a move that will push P. Leiner's annual sales above $100 mil. The stock run-up occurred despite the company's most recent operating results -- P. Leiner reported declines in both sales (15% to $17 mil.) and net income (19% to $75,000) for the third quarter ended Dec. 31. As one of the two largest vitamin suppliers to mass market retailers, P. Leiner has been adversely affected by restructuring in the chain drug industry, according to Kidder Peabody analyst Barbara Kahn. Following changes in ownership, managements tend to focus more on finances rather than operations, and inventory levels, as a result, tend to decline. On the other hand, Kahn notes, mass market retailers will continue to pick up sales at the expense of health food stores, direct sales and mail order businesses. At the same time, an uncertain industry environment will put pressure on small manufacturers, thus increasing opportunities for the larger players. Kahn estimates the U.S. vitamin market at about $2.7 bil., of which mass market retailers have a 56% share. "We believe P. Leiner has considerable opportunity to increase market shares," Kahn concludes. "Based on calendar 1986 sales of $72 mil. and the assumption that manufacturer sales represent 60% of retail sales, P. Leiner has approximately a 4% share of the total market and an 8% share of mass market sales. With the current difficult industry environment, many of the smaller manufacturers may be vulnerable to market share erosion or to acquisition." A relatively sluggish Pharmaceutical Component somewhat slowed growth of the Index Composite, which was up just over 4% for the month. The Composite's gain was more than a percentage point behind that of the S&P 400, which climbed 5.4% in February, and nearly two percentage points behind the Dow, up 6% to 2071.62. Overall, 38 issues listed on the "F-D-C" Monthly O-T-C Index advanced, 17 declined and three remained unchanged. Chain stock Begley (up 7-1/2 to 25) and Diversified stock IMS (up 7 to 37-1/4) were the month's two top advances. Both gains resulted from merger offers. Pharmaceutical market research firm IMS was purchased by Dun & Bradstreet in a stock swap deal valued at $1.8 bil. More recently, Kentucky-based Begley agreed to a $28 a share "white knight" offer from Rite-Aid. Begley stock headed an 11.5% advance of the Chain Component. The group's other three members -- Arbor (up 1-3/4 to 11-3/4), Big B (up 1-1/4 to 12) and Medicine Shoppe (up 1-1/4 to 23-1/2) -- all posted gains in excess of a point. Meanwhile, Alco (up 2-5/8 to 18-1/8) and Durr-Fillauer (up 1-5/8 to 11-1/2) paced a 10% advance for the Wholesaler Component. Chart omitted.

You may also be interested in...



Part D Discount Liability Coming Into Focus: CMS Releases Drug Cost Data

Newly released Medicare Part D data sheds light on the sales hit that branded pharmaceutical manufacturers will face when the coverage gap discount program gets under way in 2011

FDA Skin Infections Guidance Spurs Debate On Endpoint Relevance

FDA appears headed for a showdown with clinicians and the pharmaceutical industry over the proposed new clinical trial endpoints for acute bacterial skin and skin structure infections, the guidance's approach for justifying a non-inferiority margin and proposed changes in the types of patients that should be enrolled in trials

Shire Hopes To Sow Future Deals With $50M Venture Fund

Specialty drug maker Shire has quietly begun scouting deals with a brand-new $50 million venture fund, the latest of several in-house investment arms to launch with their parent company's pipelines, not profits, as the measure of their worth

UsernamePublicRestriction

Register

MT142464

Ask The Analyst

Please Note: You can also Click below Link for Ask the Analyst
Ask The Analyst

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts

Cancel