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Seven analysts and top management from one hundred eighty-seven sector firms examine the Healthcare sector in this special 673-page Third Annual UBS Warburg LLC Healthcare Conference issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info426.htm

TWST: Your coverage area includes many disciplines. What, if any, are the commonalities of the companies that you review?

Mr. Olsziewski: I follow small and mid-cap device companies across a broad spectrum of disciplines — ophthalmology, urology, gynecology, cardiology, cancer treatment, and others. So I don’t tend to have a broad, macro overview. My coverage is all about individual names. Generally speaking, people are always looking for new technologies that make a procedure faster, safer, or less invasive, reduce recovery times, or provide better clinical outcomes. While we clearly are looking for those characteristics in an investment idea, we’re also keenly aware of the importance of reimbursement. In the old days, you could have all the bells and whistles you wanted. Today, if there isn’t reimbursement in place at an attractive economic level, a procedure won’t be adopted. You do need a broader backdrop for evaluating these companies, consistent with most analysis methodologies. Those basic things include a dominant market position, broad product portfolio, attractive valuations, competitive advantage — things that any investor would be looking for. Compare my coverage list to that of David Lothson, who follows the cardiology/hospital supply area. That is a tidy universe of companies. Clearly, on the cardiology side, you have new products driving the space. In the hospital supply universe, relative valuations are generally constructive in determining when to buy and sell those stocks. In contrast, my space is a little less easy to categorize and a lot of the companies that I follow don’t have long trading histories.

TWST: When you fall back on fundamentals, the management team is a significant determinant. How do you, as an analyst, rake through the muck with each management team as they tout the market opportunity?

Mr. Olsziewski: In real estate, it’s location, location, location. In my space it’s management, management, management.

TWST: Why should I disabuse my preconception that as a contact lens business, this is more of a retail, economically tied stock than what you’ve described?

Mr. Olsziewski: That’s not entirely untrue, but there are other drivers. Certainly in the toric market, a lot of people who have an astigmatism have been told for years that they couldn’t be fitted for contact lenses. But with the development of new products and materials, that’s in fact no longer true. In addition, when you look at the US, the demographic trends are pretty favorable. The teen population accounts for more than 90% of new contact lens fits, and teens represent one of the fastest growing segments of our population. That secular driver should benefit the industry throughout the rest of the decade.

TWST: Also on your coverage list is Varian Medical Systems (NYSE:VAR). What is compelling about their investment opportunity?

Mr. Olsziewski: Varian Medical Systems is about a 65 stock. They’re a big player in the linear accelerator market, the equipment used to generate radiation for the treatment of cancer. They’re also a driving force in the move to intensity modulated radiation therapy (IMRT), and that’s the new wave in cancer treatment. This technology allows for the beam to be precisely sculpted to the shape of the tumor and is also able to adjust or modulate the intensity of the beam within the tumor for a more effective treatment — better clinical outcomes and lower side effects. We’re probably in the second inning of a nine-inning game, so it’s early in the adoption cycle and new, more favorable reimbursement became effective January 1, that should also help drive the growth of IMRT. With a backlog of more than 500 million, Varian has good earnings visibility and we think the stock should hit 80 within 12 months.

This special conference issue includes:

1) Outlook for Health Care Sectors - In an in-depth (2,900 words) Analyst Interview, Geoffrey Harris, Head of Global Healthcare Research & Annabel Saminy, Associate Director in the healthcare group, both at UBS Warburg, examine the outlook for the sector including biotechnology, life sciences, tools and share specific stock recommendations. Stocks mentioned in this interview include AMGN, GENZ, IDPH, GILD, IMCL, IMNX, PDLI, ICOS, IMNX, BGEN, CHIR and BMY.

2) Medical Device & Hospital Supply Outlook - In an in-depth (3,000 words) Analyst Interview, David J. Lothson, Managing Director in the healthcare group at UBS Warburg, examines the outlook for the sector including hospital supply, medical device stocks and shares specific stock recommendations. Stocks mentioned in this interview include ABT, BAX, JNJ, BDX, MDT, EW, BSX and GDT.

3) Small & Mid-Cap Biotechnology Stocks - In an in-depth (2,600 words) Analyst Interview, Andrew Gitkin, Executive Director at UBS Warburg, examines the outlook for the sector including small and mid-cap biotech companies, consolidation and shares specific stock recommendations. Stocks mentioned in this interview include NBIX, REGN and GSK.

4) Medical Device Companies/Small & Mid-Cap - In an in-depth (2,600 words) Analyst Interview, Charles Olsziewski, Executive Director at UBS Warburg, examines the outlook for the sector and specific stock highlights included in this interview are Medtronic and Cooper Companies. Stocks mentioned in this interview include MDT, BSMD, STE, VAR, COO, CPTS and ENDO.

5) Genomics & Diagnostics - In an in-depth (1,100 words) Analyst Interview, Ricky Goldwasser, Director at UBS Warburg, examines the outlook for the sector including genomics groups, diagnostics services group and shares specific stock recommendations. Stocks mentioned in this interview include MLMN, MYGN, LH, CRA, DIAN, UCOR, HGSI, DGX and SP.

6) European Biotechnology Companies - In an in-depth (1,800 words) Analyst Interview, Karl Keegan, Head of the European Biotechnology research team in London at UBS Warburg, examines the outlook for the sector including life sciences companies, specialty pharma, biotech companies - both platforms and therapeutic and shares specific stock recommendations. Stocks mentioned in this interview include CATG, CLL, CRXL, LEON, OGSI, SRA and SHIPGY.

7) CEO interviews (average 2,500 words). Top management of one hundred eighty-seven sector firms examine the outlook for their firm and the sector. .