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City File: Wellcome gains from sector review

Saturday 20 March 1993 19:02 EST
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IF THERE is a re-rating of the drugs sector, which optimists expect once Bill Clinton elaborates on his healthcare reforms, Wellcome is bound to be a big beneficiary.

Wellcome is not suffering, like some of its rivals, from the general mood to cut healthcare costs, thanks to its specialisation in anti-viral drugs, such as the Aids treatment, Retrovir, and the herpes drug, Zovirax.

Its half-year results, due on Thursday, will show profits rising by a third to about pounds 320m and, while most of its rivals are suffering from a slack first quarter, Wellcome is expected to show that it is powering on.

At 886p, the company's shares trade on 18.5 times this year's expected earnings. This is cheap on a year's view.

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