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Executive Summary

Forest's 76% jump in revenues to $16.9 mil. during the second quarter of fiscal 1987 benefited from recent acquisitions and the launch by Parke-Davis of Nitrogard in Forest's Synchron system, the company indicated. However, Forest President Howard Solomon noted that the strong performance in both sales and earnings during the three months ended Sept. 30 resulted from "strong sales growth in virtually all of our marketed products in the U.S. as well as sales of our recently acquired products." Forest's net income for the second quarter of 1986 grew 83.6% to $2.9 mil. from $1.5 mil. in the same quarter last year, while pretax income increased 150% to $4.1 mil. For the six months ended Sept. 30, Forest reported a sales gain of 58.3% to $30.4 mil. with net earnings up 77.5% to $5.5 mil. Solomon noted that the company recently completed its sales force expansion from 80 to 135 representatives, "who are now actively detailing our full product range." The company has made three product acquisitions for the U.S. market in a little over a year, including the butalbital/acetaminophen/caffeine combo Esgic, acquired from Gilbert Labs in 1985, Sus-Phrine, an injectable epinephrine purchased from Berlex in February, and AeroBid, the metered-dose inhaler acquired from Key this past summer. In reporting its third quarter financial results, Biogen announced that initial analysis of double-blind placebo-controlled trials of its Immuneron gamma interferon "supports previous findings of activity in the treatment of rheumatoid arthritis." The Phase II/III studies, conducted in Europe and the U.S., involved a total of 131 patients treated for six months. According to an abstract of the European study, presented in Israel the first week of November, there was "a significant decrease of the tender joint index" in the Immuneron group and "the number of subcutaneous nodules . . . increased in the placebo group during the trial period." The abstract states that "other variables were in favour of Immuneron but variations did not reach statistical significance." Twenty-six patients entered the European study, of which 22 were evaluable. Biogen stated that as in previous studies, gamma interferon produced no serious side effects in the recent trials. Final data analysis will not be completed until early 1987, Biogen said. The company added that "significant additional studies will be necessary before an NDA can be submitted." Biogen has indicated that it is looking to license its recombinant gamma interferon for rheumatoid arthritis to another company. In June, Biogen signed a letter-of-intent licensing agreement with Baxter Travenol, giving Baxter marketing rights for Immuneron in the U.S. and Europe for the treatment of cancers ("The Pink Sheet" July 14, p.4). For the three months ended Sept. 30, Biogen reported a net loss of $7.5 mil. on a 70% revenue decline to $1.7 mil., which compares to a net loss of $4.8 mil. in the same quarter last year. For the nine month period, Biogen showed a net loss of $20.5 mil. on revenues of $8.4 mil., versus a net loss of $12.6 mil. on revenues of $17.3 mil. the previous year. Biogen Chairman and CEO Jim Vincent said the decline in revenues was "due primarily to the scheduled end of payments by our research and development limited partnership and to fluctuations in revenues from licensing agreements." Alco Health Services' annual sales volume topped $1 bil. for the first time in fiscal 1986 ended Sept. 30, the drug wholesaler recently reported. Sales increased 34.6% to $1.29 bil. for the fiscal year, while net earnings grew 20.7% to $15.6 mil. In the fourth quarter, Alco Health Services' sales volume jumped 43.8% to $370.6 mil.; earnings were relatively flat, adding 2.6% to $3.9 mil. Alco said that the fourth quarter results "were less than expected and were caused primarily by the LIFO [last-in-first-out] accounting treatment of unanticipated increases in manufacturers' prices which occurred late in the period, and by several competitive situations which now have been largely overcome." Chart omitted.

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