DRUG FIRMS ARE STOCK MARKET DARLINGS

The success of UK pharmaceutical companies overseas, especially in the USA, "has ensured their place in the world drugs league despite the modest size of their domestic market," observe Fiona Walsh and Helen Kay writing in the Sunday Times last week.

And commenting on the USA, the Pink Sheet says that drug stocks "are winners across-the-board," although price rest-raint is gaining Wall Street attention. The 30-issue Pharmaceutical Component of the FDC Index showed an increase of 52.4% from end-1990 to end-1991, its second best performance since the Pink Sheet started its indexing of the sector. This compares with a 20.3% rise in the Dow Jones and a 26.2% increase in the S&P 500. In 1985 the Pharmaceutical Component posted a 53% gain.

Pfizer was the most attractive of the US stocks, according to the Pink Sheet, showing a gain in 1991 trading of over 100%. More spectacular stock price rises were reported for smaller companies, such as ICN Pharmaceutical (up 526.1%) and Bolar (up 468.4%). Two laggards in the USA were Eli Lilly, up just 14%, and Marion Merrell Dow, which stayed flat at $36.38 over the year. The Pink Sheet notes that both Lilly and MMD had the "odd, but noteworthy, distinction of having investment portfolios made up of stakes in other drug companies that outperformed the growth of their own stocks in terms of percentage increases."