A Lab That's In The Pink

In the past two years, probably no other pharmaceutical startup has inked as many alliance pacts with big U.S. and foreign drug companies as Columbia Laboratories. Yet its stock, traded on the American Stock Exchange, has been in the doldrums, down from 10 1/2 a share to 7 since January. One reason: Some analysts expect Columbia to report poor fourth-quarter 1991 earnings in a few weeks. But a few big investors aren't worried.

One bull is money manager Ed Heubner, president of Chestnut Hill Management, which owns some 2% of Columbia stock. He sees 1993 earnings of 75 a share. Says Heubner: "If the deal with Warner-Lambert gets going fast, Columbia could earn $1 in 1994."

Columbia has signed five marketing agreements--one with Warner-Lambert for its patented "bioadhesive" system of delivering drugs to mucosal parts of the body, such as the mouth, stomach, vagina, or rectum. Warner-Lambert has exclusive marketing rights in the U.S. and Canada to Columbia's Replens, a nonhormonal product that treats vaginal dryness, a condition common primarily among postmenopausal women. Replens is also being sold in Europe.

But some pros are betting that Columbia's big hit will be its spermicide, which is expected to have substantial advantages over existing contraceptives in efficacy and duration. Columbia says its product will be effective up to 24 hours. Says Heubner: "The spermicide, to be marketed next year, has the potential to be Columbia's blockbuster product."

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