Defined Asset Funds [SM]
Focus Series 1999 B
Sector Strategy
Merrill Lynch Research
BIOTECHNOLOGY IRA Ideal!
PORTFOLIO
A Research Focus
on the Biotechnology Sector
[ML Logo] Merrill Lynch
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[LOGO]
MERRILL LYNCH RESEARCH: A REPUTATION FOR EXCELLENCE
With 500 equity research analysts globally, Merrill Lynch has earned its
reputation as a world-class research organization. Its Global Research and
Economics Group provides in-depth coverage of more than 4,000 companies in 53
countries worldwide.
For each of the last four years, Merrill Lynch was awarded the top rank in
Institutional Investor's "All-American Research Team" survey of equity analysts
based on the total number of team analysts.
In 1951, scientists Francis Crick, James Watson and Maurice Wilkins unveiled a
profound biological finding - deoxyribonucleic acid, otherwise known as DNA.
They described the molecular structure of their Nobel Prize-winning discovery as
a double helix, or a spiral staircase with many individual steps. Today, we
recognize DNA as a monumental discovery of the 20th century, marking the first
step of the biotechnology revolution. Defined Asset Funds(sm) offers you an
opportunity that seeks to capitalize on the potential of this burgeoning
frontier with our . . .
Biotechnology Portfolio
A Pioneering Sector
Since its infancy in the early 1950s, the science of biotechnology has grown
from one of theoretical possibility to one of real-world application. Many
pioneering biotechnology companies have matured, and are now capable of
producing viable products and services, as well as managing and improving
corporate earnings.
At Merrill Lynch, we believe the biotechnology sector is just beginning to
realize its full potential, for several reasons:
Companies with Profit Potential
Many biotechnology companies are now operating with good cash flow, low
corporate debt and competitive share prices.
New Products and Applications
More new products and applications are being developed, and biotechnology
companies are spending more on Research and Development.
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FDA Approval
Biotechnology products have been receiving faster FDA approval. For example,
from 1982 to 1994, a total of 15 biotechnology products received approval. In
1998 alone, the FDA approved eight new biotechnology drugs.
An Economically Resistant Sector
Because many drugs directly impact the quality of life for patients, products of
biotechnology companies may be resistant to cyclical economic trends.
Competitive Advantage
Due to the complexity of its products, the biotechnology industry is not
currently prone to generic competition.
Our Sector Strategy
The Defined Asset Funds Biotechnology Portfolio seeks capital appreciation by
investing in a number of potentially dynamic companies in the biotechnology
sector. The stocks were researched and selected by Merrill Lynch Global Research
and Economics Group for their capital appreciation potential and strong
fundamentals. Portfolio stocks represent a range of market capitalizations.
The Portfolio
Like all Defined Asset Funds, the Biotechnology Portfolio follows a disciplined
"buy and hold" strategy. It invests in a selection of stocks for a fixed period
of time, in this case, two years. At the end of this time, you may choose to
reinvest in the new Biotechnology Portfolio, if available, or you can redeem
your investment.
A DEFINED PORTFOLIO
COMPANY SYMBOL
AFFYMETRIX, INC. AFFX
Develops and commercializes gene chip DNA protein technology for automated gene
analysis and management of complex genetic information.
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ALKERMES, INC. ALKS
Develops innovative pharmaceutical products based on four proprietary systems
for delivering both therapeutic proteins and small molecules.
AMGEN, INC. AMGN
The largest biotechnology company with sales approaching $3 billion. It spends
over $800 million annually on Research and Development. One of its drugs, NESP,
is used to increase red blood cells.
BIOCHEM PHARMA, INC.* BCHE
A Canadian biopharmaceutical company emphasizing drugs, vaccines and diagnostics
for infectious diseases and oncology. Its anti-HIV drug, Epivir (3TC), is
marketed by Glaxo Wellcome. Its drug for hepatitis B, Zeffix, is being launched
worldwide by Glaxo.
BIOGEN, INC. BGEN
Develops drugs for autoimmune/immunological and cardiovascular disorders.
Biogen's drug, AVONEX, is considered the drug of choice for multiple sclerosis,
and we believe it may provide continued strong sales and earnings growth.
CHIRON CORPORATION CHIR
A leading biotechnology company focused on therapeutics, vaccines and blood
testing. Chiron spends approximately $300 million on Research and Development
annually.
GELTEX PHARMACEUTICALS, INC. GELX
An early-stage biopharmaceutical company that develops therapeutics to target
and eliminate specific substances from the intestinal tract. Its lead drug,
RenaGel, is a phosphate binder for patients with chronic kidney failure.
GENENTECH, INC. DNA
A leading biotechnology firm that develops drugs for oncologic, cardiovascular,
pulmonary, neurological and immunological diseases. It has ten products on the
market and spends over $400 million per year on Research and Development.
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GENZYME CORPORATION GENZ
Develops and markets therapeutics and diagnostic products and services. Key
include Cerezyme to treat Gaucher's disease and RenaGel for dialysis patients.
It also has promising therapeutic proteins for three to five other diseases.
GILEAD SCIENCES, INC. GILD
An emerging biotechnology company focused on therapies for AIDS, hepatitis and
influenza. Drugs in development include Preveon (oral reverse transcriptase
inhibitor), GS4104 (treatment/prevention of influenza) and PMPA (inhibitor of
HIV replication).
HUMAN GENOME SCIENCES, INC. HGSI
A leading biotechnology company in discovering, sequencing and cataloging all
human genes, in order to discover and develop novel drugs. It has filed more
than 6,000 patents on full-length gene sequences and related proteins.
IDEC PHARMACEUTICALS CORPORATION IDPH
Develops immunologically active antibodies designed to target immune system
cells to fight disease. Its lead drug, Rituxan, co-marketed by Genentech, is the
first monoclonal antibody approved by the FDA to treat cancer, and we believe it
may provide continued strong sales and earnings growth.
IMCLONE SYSTEMS, INC. IMCL
Develops interventional therapeutics, cancer vaccines and blood cell growth
factors for the treatment of cancer and related disorders. Its lead drug, C225,
is in late-stage testing for head and neck cancer.
IMMUNEX CORPORATION IMNX
A diversified biopharmaceutical company focused on cancer and inflammatory
diseases. Its lead drug, ENBREL, is becoming the leading medicine for the
treatment of Rheumatoid Arthritis.
MEDIMMUNE, INC. MEDI
A developer of novel vaccines and immunotherapeutics for infectious diseases and
organ transplants. Its lead drug, Synagis, helps prevent RSV pneumonia in
high-risk infants, and is the only drug available for the disease. Additional
products are in development for transplantation, oncology and vaccines.
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QLT PHOTOTHERAPEUTICS, INC.* QLTI
Focuses on cancer treatment, opthamology and autoimmune diseases. Its key drug
in clinical development, BPD, may be launched in late 2000 with marketing
partner Ciba Vision.
SANGSTAT MEDICAL CORPORATION SANG
An emerging pharmaceutical company whose drugs, devices and services address
patient needs in each stage of transplant care.
VERTEX PHARMACEUTICALS, INC. VRTX
A drug-discovery company that uses the structure of target proteins to design
new drugs. Its leading anti-HIV drug, Agenerase, developed with Glaxo, was
recently launched in the U.S.
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*This is a foreign corporation; dividends, if any,
will be subject to withholding taxes.
DEFINED ASSET FUNDS - OUR PHILOSOPHY
At Defined Asset Funds, we are ever mindful that behind every investment dollar
lies something infinitely more important - your investment goal. This is why we
offer a full range of defined investments designed to meet a variety of
objectives.
We are committed to providing our investors with some of today's most attractive
equity and fixed-income investments, within the convenient "buy and hold"
structure of a unit investment trust. For income, for growth or for total
return, we believe that time in the market can be an effective strategy for
growing your portfolio.
At Defined Asset Funds, we set the foundation for all of our portfolios in this
way, because we too have an important goal in mind - yours.
Defined Asset Funds
Buy With Knowledge o Hold With Confidence
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FIXED-INCOME FUNDS
Corporate Funds
Government Funds
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Municipal Funds
EQUITY INVESTOR FUNDS
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Premier American Portfolio
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Real Estate Income Fund
Tele-Global Trust
Utility Portfolio
Select Series
Select Ten Portfolio (DJIA)
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(Financial Times Index)
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Select Growth Portfolio
Select Large-Cap Growth Portfolio
Select S&P Industrial Portfolio
Select Standard & Poor's Industry
Turnaround Portfolio
Select Standard & Poor's
Intrinsic Value Portfolio
Index Series
S&P 500 Trust
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Make biotechnology part of your portfolio today!
You can get started for about $250. Call your Financial Consultant for a free
prospectus containing more complete information including sales charges,
expenses and risks. Please read it carefully before you invest or send money.
Defining Your Risks
Please keep in mind the following factors when considering this investment. Your
Financial Consultant will be happy to answer any questions you may have.
o The Portfolio is designed for investors who can assume the risks associated
with equity investments. It may not be appropriate for investors seeking
capital preservation or current income.
o There can be no assurance that the Portfolio will meet its objective.
o The value of your investment will fluctuate with the prices of the
underlying stocks. Stock prices can be volatile.
o This Portfolio is concentrated in biotech stocks and should not be
considered a complete investment program. This industry is subject to
special risks including significant expenditures on Research and
Development, FDA approval and product liability.
A Tax-Efficient Structure
The proceeds you receive when you sell this investment will reflect the
deduction of the deferred sales charge and, after the initial offering period,
the charge for organization costs.
In addition, the annual statement and the relevant tax reporting forms you
receive at year end will be based on the amount paid to you, net of the deferred
sales charge and, after the initial offering period, the charge for organization
costs. Accordingly, you should not increase the tax basis in your units by these
charges.
Generally, dividends and any gains will be subject to tax each year, whether or
not reinvested. By holding this Fund for more than one year, investors may be
eligible for favorable federal tax rates on any net long-term capital gains
(currently, no more than 20%) for individuals.
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Defining Your Costs
First-time investors pay an initial sales charge of about 1% when they buy. In
addition, all investors pay a deferred sales charge of seven monthly payments of
$2.50 per 1,000 units, deducted from the Portfolio's net asset value each year
of the Portfolio's two-year life ($35.00 total).
As a % of Amount
Public Offering Price per 1,000 units
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Initial Sales Charge 1.00% $10.00
Deferred Sales Charge Year 1 1.75% $17.50
Deferred Sales Charge Year 2 1.75% $17.50
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Maximum Sales Charge 4.50% $45.00
Estimated Annual Expenses
(as a % of net assets) 0.211% $2.09
Estimated Organization Costs $3.08
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If you sell your units before the final deferred sales charge payment in either
the first or second year, the remaining balance of your deferred sales charge
will be deducted along with the estimated costs of selling Portfolio securities
from the proceeds you receive. If you roll over to a successor Portfolio, if
available, the initial sales charge on that Portfolio will be waived. You will
only pay the deferred sales charge.
Volume Purchase Discounts
For larger purchases, the overall sales charges are reduced to put more of your
investment dollars to work for you.
Amount Total Two-Year Sales Charge
Purchased as a % of Public Offering Price
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Less than $50,000 4.50%
$50,000 to $99,999 4.25%
$100,000 to $249,999 3.75%
$250,000 to $999,999 3.50%
$1,000,000 or more 2.75%
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The information in this brochure is not complete and may be changed. We may not
sell the securities of the next portfolio until the registration statement filed
with the Securities and Exchange Commission is effective. This brochure is not
an offer to sell these securities and is not soliciting an offer to buy these
securities in any state where their offer or sale is not permitted.
32762BR-10/99
(C) 1999 Merrill Lynch, Pierce, Fenner & Smith Incorporated. Member SIPC.
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