Burroughs Wellcome Outlook Reviewed

While it is the anti-AIDS drug Retrovir (zidovudine) that has garnered publicity for Burroughs Wellcome, it is Zovirax (aciclovir) that accounts for 37% of the company's sales and almost half of its operating profits.

But with Zovirax patents expiring in the USA at the same time it is facing competition from SmithKline Beecham's Famvir (famciclovir), and zidovudine (often called AZT) sales falling because of questions about its efficacy in the early treatment of HIV-positive patents (Marketletters passim), there are now some questions about whether the company can remain independent, especially with rapid industry consolidations.

The Wellcome Trust's ownership of 39.5% of shares of Wellcome, the UK parent of Burroughs Wellcome, makes it relatively safe from a hostile takeover, but some analysts feel that if the company cannot bring some new life to its product line, it might be forced to consider some offer.