Drug Stocks In Demand On World Exchanges

Pharmaceutical shares are back on the priority list of investors on the international stock market. Market sources in Frankfurt, Germany, note that a year ago there was a pronounced drift away from drug stocks in the wake of government intervention to cut health service costs in a number of countries, particularly Germany. Uncertainties over US health reform propelled the trend further.

Javier Latorre of the Dresdner Bank's International Research Institute says that 1993 was the "black year of the drug industry." Since then, pharmaceutical companies have reacted by cost-cutting and extensive rationalization, and selective searches for interesting stocks are underway. The DB's IRI has completed a study of 14 international drug companies and its list of selections is headed by Roche Holdings AG and Pfizer Inc.

Roche And Pfizer Favorites Roche's business is intensively cross-linked, making a number of new synergies possible, and the geographical division of R&D, production and distribution is seen in the study as an excellent feature. Roche also has liquid reserves available for further growth, as well as overall sales of 14.7 billion Swiss francs ($12.32 billion), of which drug sales accounted for 8.4 billion francs. Funds for further acquisitions are estimated at 14 billion francs.