THE TIMES 100 : The Best Performing Companies in California : View From the Street : A Love Affair With Biotech Intensifies : After decades of investor fidelity to the cutting-edge technologies, their hopes are being answered.

The landscape in the land of the loved hasn’t changed much in the last year, proving that investors can indeed be faithful, particularly when their affections are returned.

And lately they have been returned with a vengeance. In 1990 Wall Street smiled on biotechnology stocks, and biotech responded by fulfilling the promises it made more than a decade ago: products, profitability and a prosperous future.

“Have you seen what these stocks have done these last two years?” asked Peter F. Drake, biotech analyst with Vector Securities International, a suburban Chicago investment bank. “It doesn’t take a genius to figure this one out.”

But a little history lesson helps in looking at this year’s Wall Street Favorites/Forlorn and Highest-Priced and Lowest-Priced Firms as compiled by MZ Group of San Francisco. In the late 1970s, biotechnology companies were hard at work ironing out the technological kinks in their miracle products. In the 1980s came the clinical trials.

By 1988 Genentech Inc. of South San Francisco brought to market the first major product based on genetic engineering. With Genentech’s TPA, which breaks down blood clots and is given to heart attack patients, biotechnology entered the commercial arena.

A few setbacks later, California’s biotechnology companies began moving up the Wall Street Favorites chart with a bullet. Today, they monopolize the top of the chart, holding seven of the first eight positions. Last year, they were spread throughout the chart, showing investor interest, but nowhere near the adoration they are generating today.

“The group had been undervalued earlier,” said Jim McCamant, editor of Medical Technology Stock Letter in Berkeley. “We now have real products and profits. . . . It takes a long time to get things from discovery through the regulatory process. When you see results in a few companies, then the anticipation starts to move the other companies up.”

Proof of McCamant’s premise can be found in Thousand Oaks, where Amgen Inc. has analysts fairly spewing superlatives. In 1989 the company received Food and Drug Administration approval for Epogen, which is used to treat anemia. Two months ago Amgen won clearance for its second drug, Neupogen, for treating white blood cell suppression in chemotherapy patients.

“This is one of those one-two punches that not only revolutionizes the way in which medicine is practiced, but literally changed the whole complexion of a company and the kind of opportunities they’re going to have before them,” Drake gushed. “They are literally going to be making money so fast that they’re not going to know what to do with it. That’s the kind of stuff that Wall Street loves.”

Hey, Peter, tell us what you really think.

“I think this is a $200 stock in the next 12 months,” he said of the company, whose shares are trading in the low $130-dollar range. “That’s how bullish we are. This stock’s got $200 written all over it. In other words, don’t think the party’s over.”

Hyperbole aside, Amgen rose to the No. 6 spot on the Wall Street Favorites list, which ranks companies by market price to sales ratio. The company’s market value in mid-April was $5.3 billion, while sales were $299 million. Last year, Amgen weighed in at No. 10.

In addition, Amgen shot from No. 22 to No. 1 on the list of this year’s Highest-Priced Companies list, which ranks companies by market price as a percent of book value. With market value at $5.3 billion and book value at $298 million, investors are paying a very high price for their stock. Put another way, Amgen’s investors are willing to spend $18 for every $1 in company assets, a price largely built on faith.

Other biotech favorites holding high spots on the Wall Street Favorites list are Xoma Corp. of Berkeley, which is awaiting approval for a product to treat severe infections, and Chiron Corp of Emeryville, a leader in developing diagnostic tests for the blood-banking industry.

Lest you think this wave of good fortune will last forever, McCamant has a few words to persuade you otherwise:

“It’s going to be more selective from here on. Instead of having all of the stocks go up, we’re going to have some do well and others not. . . . It can’t go on forever. It wish that it would.”

But biotech companies weren’t the only ones that made Wall Street swoon. Tejon Ranch of Lebec, the farming and livestock company in which Times Mirror owns a substantial interest, is a perennial favorite, ranking No. 1 on the loved list for four years running. And it also clinched a spot on the Highest-Priced list, although Amgen pushed it out of No. 1 this year.

So, who don’t you love? Well, that’s one of those tough questions, the kind that rank right up there in the “Who’s-buried-in-Grant’s-tomb?” category. Ready? Here’s the answer: Savings and loans, developers, retailers. Or, cribbing from the Forlorn List: Great America Bank of San Diego, Landmark Land Co., Carter Hawley Hale.

WALL STREET’S FAVORITESCompanies with highest ratio of stock market value to sales.

4/12/91 1990 Price- mkt. value revenue to-sales Rank Company ($ millions) ($ millions) ratio 1 Tejon Ranch Co. 306.0 13.0 23.62 2 Cetus Corp.* 522.4 23.4 22.31 3 Molecular Biosystems Inc. 218.8 10.6 20.67 4 Alza Corp. 2,027.8 99.3 20.43 5 Xoma Corp. 386.3 20.5 18.86 6 Amgen Inc.* 5,349.5 298.7 17.91 7 Calif. Biotechnology 180.0 12.4 14.49 8 Chiron Corp. 1,124.3 78.5 14.32 9 Cisco Systems Inc. 786.1 69.8 11.27 10 Occupational Urgent Care 204.0 19.2 10.60 11 Magma Power Co. 721.5 77.8 9.27 12 Adobe Systems Inc.* 1,312.5 168.7 7.78 13 Integrated Systems Inc. 123.8 17.9 6.93 14 Genentech Inc. 3,124.7 476.1 6.56 15 Xilinx Inc.* 536.8 83.7 6.42 16 Symantec Corp.* 492.6 77.4 6.36 17 Syntex Corp.* 9,383.6 1,521.0 6.17 18 Diagnostic Products Corp. 447.1 75.9 5.89 19 Autodesk Inc.* 1,262.6 225.6 5.60 20 Synoptics Commun. 919.7 176.0 5.23 21 Berry Petroleum 279.7 53.7 5.21 22 Franklin Resources Inc.* 1,485.3 287.9 5.16 23 Novellus Systems Inc. 319.9 67.1 4.77 24 California Energy Co.** 450.7 95.3 4.73 25 Acuson Corp. 1,301.3 282.8 4.60

*See exceptions, page 55. **See company notes, page 55.

WALL STREET’S FORLORNCompanies with the lowest ratio of stock market value to sales.

4/12/91 1990 Price- mkt. value revenue to-sales Rank Company ($ millions) ($ millions) ratio 1 Great Amer. Bank San Diego 18.0 1,543.8 0.01 2 First Executive Corp. 23.8 1,296.5 0.02 3 Homestead Finl. Corp. 4.6 243.6 0.02 4 Carter Hawley Hale Stores* 64.9 2,982.8 0.02 5 Leisure Technology Inc. 3.0 117.9 0.03 6 American Pacific Mint Inc. 1.5 45.5 0.03 7 Distributed Logic Corp. 1.6 44.9 0.03 8 Intermark Inc.* ** 45.1 1,229.8 0.04 9 Businessland Inc.* 60.3 1,353.6 0.04 10 CM Communications Inc. 1.0 22.3 0.05 11 Barry’s Jewelers Inc. 8.8 176.8 0.05 12 Homefed Corp. 94.0 1,867.4 0.05 13 Genisco Technology 1.5 28.6 0.05 14 Mediagenic 2.3 41.0 0.05 15 Merisel Inc. 66.4 1,192.4 0.06 16 Erly Industries 22.4 388.6 0.06 17 Precision Aerotech Inc. 4.3 70.2 0.06 18 Landmark Land Co. 25.0 389.1 0.06 19 Coast Savings Finl. Inc. 70.3 1,075.6 0.07 20 CMS Enhancements Inc.* 12.5 187.7 0.07 21 Advanced Marketing Serv. 12.0 180.0 0.07 22 Fireplace Manufacturers Inc. 1.6 22.9 0.07 23 Riverbend International 5.8 72.5 0.08 24 Fries Entertainment Inc. 2.4 29.7 0.08 25 Kerr Glass Mfg. 25.7 303.3 0.08

*See exceptions, page 55. **See company notes, page 55.

HIGHEST-PRICED COMPANIESCompanies ranked by market price as a percent of book value.

4/12/91 Market as market value Book value Rank Company % of book ($ millions) ($ millions) 1 Amgen Inc.* 1,798 5,349.5 297.6 2 Symantec Corp.* 1,533 492.6 32.1 3 Xoma Corp. 1,462 386.3 26.4 4 Foundation Health Corp.* 1,406 115.3 8.2 5 Occupational Urgent Care 1,301 204.0 15.7 6 Intl. Rectifier Corp. 1,259 271.6 21.6 7 Adobe Systems Inc.* 1,218 1,312.5 107.8 8 Syntex Corp.* 1,216 9,383.6 771.7 9 Cisco Systems Inc.* 1,136 786.1 69.2 10 Borland International* 1,134 846.7 74.7 11 Gap Inc.* 1,028 4,313.5 419.5 12 Tejon Ranch Co. 951 306.0 32.2 13 Chiron Cor. 935 1,124.3 120.3 14 Alza Corp. 923 2,027.8 219.6 15 Synoptics Communications 916 919.7 100.4 16 Centex Telemanagement Inc. 869 339.5 39.1 17 California Energy Co.** 754 450.7 59.8 18 Office Club Inc. 725 245.0 33.8 19 Tokos Medical Corp. 708 282.4 39.9 20 Xilinx Inc.* 696 536.8 77.1 21 Trimble Navigation Ltd. 695 251.6 36.2 22 Bridgford Foods Corp.* 686 112.8 16.4 23 National Health Laboratories 675 1,733.7 256.7 24 Acuson Corp. 651 1,301.3 199.8 25 Molecular Biosystems Inc. 651 218.8 33.6

*See exceptions, page 55. **See company notes, page 55.

LOWEST-PRICED COMPANIESCompanies ranked by market price as a percent of book value.

Market 4/12/91 value as market value Book value Rank Company % of book ($ millions) ($ millions) 1 Calfed Inc. 17 191.5 1,142.9 2 Glenfed Inc.* 18 230.8 1,259.5 3 First Capital Holdings Corp. 30 116.7 383.8 4 Western Digital Corp.* 44 142.4 322.0 5 Citadel Holding Corp. 50 108.4 218.5 6 American President Cos. 63 353.4 563.8 7 Security Pacific Corp. 64 3,008.0 4,708.0 8 First Interstate Bancorp 72 2,064.7 2,868.0 9 Bay View Capital Corp. 72 132.8 184.3 10 Maxtor Corp.* 73 137.1 188.8 11 Hexcel Corp. 74 103.8 139.7 12 Imperial Bancorp 76 136.0 178.2 13 Union Bank 81 840.6 1,033.1 14 Sumitomo 82 217.9 264.7 15 Rohr Industries* 84 347.7 413.7 16 Watkins-Johnson 85 122.2 144.0 17 H.F. Ahmanson & Co. 85 1,993.4 2,342.2 18 Transamerica Corp. 88 2,650.6 3,016.7 19 Spelling Entertainment 89 186.1 210.0 20 Consolidated Freightways 92 538.0 582.0 21 Fremont General Corp. 93 174.0 187.4 22 Downey Savings & Loan 96 246.4 256.9 23 Everex Systems Inc.* 100 139.1 139.6 24 Potlatch Corp. 100 898.0 896.1 25 Cubic Corp.* 106 152.4 143.5

*See exceptions, page 55. **See company notes, page 55.