But all three companies in any combination look attractive. Promising new drugs are on the way. American Home Products sells at 29 times this year's estimated earnings. Warner-Lambert is using much of its profits from Lipitor to fund research on new drugs. The stock sells at 40 times this year's projected earnings.
Biotechnology is no longer a wish and a prayer.
Amgen already has two big drugs on the market, one of which helps patients with chronic kidney failure, and has four potential blockbusters in late-stage development. MedImmune also has two major drugs, one of which protects children from respiratory virus, and several promising ones on the way. Amgen sells at 42 times this year's estimated earnings, while MedImmune trades at 54 times earnings. Profits at both firms are growing fast. The Kiplinger Washington Editors, Inc.