GENENTECH PROTROPIN SALES TOP $5 MIL. IN 1985 FOLLOWING LATE OCTOBER LAUNCH; REVENUES UP $43 TO $26 MIL. IN FOURTH QUARTER; BIOGEN REPORTS 1985 LOSS
Genentech's Protropin (somatrem for injection) launch in October generated over $5 mil. in sales during the fourth quarter of 1985, the biotech firm said in its preliminary sales and earnings report for the last quarter and year. Touting the launch as a "major success," Genentech Chief Executive Officer Robert Swanson noted that the October introduction of the recombinant human growth hormone "resulted in over $5 mil. in sales in the fourth quarter and the first profits Genentech has earned from the sale of our own products. The company launched the product shortly afer Oct. 17 approval by FDA. Although the market for human growth hormone is small, Genentech's Protropin filled a market void that occurred when naturally derived human growth hormone products were pulled off the market in May 1985 due to reports of viral contamination. For the fourth quarter, Genentech reported revenues up 43.1% to $25.9 mil., generating a nearly four-fold increase in net earnings to $2.2 mil., up from $612,000 in the fourth quarter of 1984. For the full year, Genentech's net income more than doubled to $5.6 mil. on a 28% gain in revenues to $89.6 mil. Biogen's fourth quarter and 1985 financials showed total revenues for the year declining 32% to $21.4 mil. with a net loss of $19.1 mil. Fourth quarter revenues dropped 55% to 4.2 mil. contributing to a quarterly net loss of $6.5 mil. As a result, Biogen's cash and short-term investment position decreased from $72.2 mil. at the end of 1984 to $53.5 mil. at the close of 1985. "In the fourth quarter of 1985, we began a reevaluation of our licensing program to accommodate positive scientific and clinical developments regarding our products, particularly gamma interferon, interlukin-2 and the colony stimulating factors," Biogen's new chairman and chief exec James Vincent stated. "Biogen currently has the largest number of projects available for licensing in its history, some having advanced as far as clinical trials." Biogen's goal, Vincent said, is to "strike appropriate arrangements with strong partners that reflect the increase in value in these promising therapeutics." Vincent noted that while the strategy review resulted in increased losses during the fourth quarter, Biogen expects to increase revenues from licensing activities in 1986. Amgen recently got a quick payback from J&J by signing research agreements further into the develoment cycle for genetically engineered products. Upjohn's worldwide sales of human health care products and services increased 18% during the fourth quarter and 7% for the year. With human health care segment sales at 1.45 bil. in 1984, the 7% increase translates into 1985 health care sales of $1.55 bil. Xanax and Halcion "posted record sales, as did the antibiotic Cleocin phosphate," Upjohn noted. The firm's second generation hypoglycemic Micronase "led all products in rate of sales growth," Upjohn added. Motrin sales declined, "although unit sales increased." Sales figures for Upjohn products from Pharmaceutical Data Services' annual meeting in New York, showed Halcion retail sales (at pharmacy acquisition cost) doubling to $50 mil. in 1985 and Xanax retail sales jumping 85% to $152 mil. According to the PDS data, Micronase sales grew to $32 mil. in the product's first full year of marketing in 1985, up from $5.7 mil. in 1984, offsetting a decline of approximately $25 mil in Tolinase sales in 1985 to $55 mil. PDS projections put Motrin retail sales at approximately $120 mil. for the year, down 30%. Overall, Upjohn sales for the year increased 6.2% to over $2 bil., contributing to a 17.1% gain in the income to $203 mil. Fourth quarter sales were up 14.1% to $514.2 mil. with net income from continuing operations increasing 14.9% to $50.3 mil. Sterling reported a marginal increase in sales by ita U.S. Rx pharmaceutical segment in 1985 to $268.9 mil.; however, operating income from pharmaceutical specialties increased 15.1% to $61.3 mil. Fourth quarter segment sales grew 2% to $78.1 mil. "While sales of Sterling's domestic pharmaceutical specialties were strong overall in the 1985 fourth quarter, sales of Amipaque (metrizamide) were off from last year in anticipation of FDA approval of Sterling's NDA for Omnipaque (iohexol), Sterling noted. The second generation in vivo diagnostic was approved at the very end of 1985. "Acceptance of the new product was immediate and enthusiastic," the firm said. Citing an increase in Bayer aspirin sales, Sterling reported that its proprietary products business increased 11% during the fourth quarter to $80.5 mil., and 3% for the year to $280 mil. Total corporate sales were up 8.9% to $468.2 mil. for the fourth quarter and 1.6% for the year to $1.75 bil. The drug whslr. FoxMeyer, which is in the process of being acquired by National Intergroup ("The Pink Sheet" Feb. 10, p. 6), reported a 68% gain in revenues during the third quarter of fiscal 1986 ended Dec. 31 to $315.3 mil. However, net income for the quarter was down 20%, primarily due to the whslr.'s switch to the LIFO (last-in-first-out) method of inventory valuation from FIFO (first-in-first-our). If FoxMeyer had not switched accounting methods, third quarter net income would have been up slightly to $3.1 mil. Through nine months, FoxMeyer net income grew 11.5% to $7.1 mil. on a 71.1% jump in sales to $859.4 mil. Chart omitted.
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