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CAPOTEN PRODUCT SALES APPROACH $200 MIL. IN SECOND QUARTER ON 61% VOLUME INCREASE; SALES OF TAGAMET "STRONG," DYAZIDE "SOFT," SMITHKLINE REPORTS

Executive Summary

Combined sales of Capoten and Capozide rose 61% during the second quarter of 1987 to $196 mil., Squibb announced July 21. "New prescriptions reached 299,000 in June, 47% over June 1986, for an 11% share of the market (beta blockers plus synthetic antihypertensives)," the company said, noting that sales of Capoten and Capozide increased 24% over first-quarter levels. Squibb's ACE inhibitor product line also paced a 48% increase in total cardiovascular sales, which reached $241 mil. for the three months ended June 30. The difference came primarily from sales of the beta blocker Corgard, which were up 13% to $41 mil. during the quarter, the firm reported. Cardiovascular product sales made up slightly more than half of Squibb's total pharmaceutical volume during the quarter. The company said drug sales reached $457 mil., a 27% increase over the second quarter of 1986. Squibb also reported that worldwide sales of its new injectable monobactam antibiotic product, Azactam, reached $19 mil., up from $6 mil. in the second quarter of 1986. Six-month sales were $32 mil., up from $8 mil. "Acceptance by hospital formularies in the U.S. and Japan is proceeding well and exceeds expectations," the firm said. Isovue-M became Squibb's third best-selling product during the quarter, behind Capoten and Corgard, the company noted. Sales of the non-ionic imaging agent led a 63% increase in diagnostic product volume to $38 mil. for the three months and a 67% jump to $71 mil. for the six months. Squibb's second-quarter corporate volume surpassed the $500 mil. mark, rising 25% to $532 mil. from $424 mil. a year ago. Net income climbed 40% to $95 mil. Net sales for the first six months of 1987 were just over $1 bil., up from $811 mil. Six-month net income was $165 mil., an increase of 34%. "The excellent results for the quarter and half reflect, primarily, the continued strong performance of our cardiovascular pharmaceutical products, diagnostic imaging agents and ConvaTec business, as well as continued favorable impact from foreign exchange rate fluctuations," Chairman Richard Furlaud remarked. Tagamet's second-quarter sales growth in the U.S. sparked a 16% advance in ethical pharmaceutical volume to $512 mil., SmithKline reported July 20. "U.S. sales of Tagamet were strong in the quarter and Dyazide was soft, both reflecting wholesaler buying patterns," the company explained, adding that the quarter "was market by Tagamet growth in the U.S., stable Tagamet sales internationally and the benefit of currency exchange." Ethical drug sales made up roughly half of SmithKline's corporate volume, which increased 16% to just over $1 bil. for the three months ended June 30, the company's seventh consecutive quarter of double-digit sales growth. Net earnings were up 7% to $132 mil. "Strong performance from our major businesses kept us on target toward our primary corporate goal of at least 10% growth in operating income," Chairman Henry Wendt remarked. "Our non-pharmaceutical businesses, including Beckman Instruments, SmithKline Bio-Science Labs and Allergan, reported double-digit sales increases and grew operating income faster than sales." Operating income was $203 mil. for the quarter, an increase of 11% over the comparable 1986 period. However, sales by SmithKline's consumer health care division were off 20% from the previous second quarter to $23 mil. Wendt explained that the $29 mil. achieved in 1986 reflected "heavy wholesaler orders for the reintroduction of Contac." He added that the product finished the 1986-87 season as the top-ranked cold medicine in A. C. Nielsen ratings. Eye and skin care reported the largest quarterly sales increase, 32%, of any SmithKline operating unit. The group's sales reached $133 mil., "led by its pharmaceutical and optical units," the company said. Eye and skin care was followed by animal health, up 16% to $70 mil., and Beckman Instruments, up 14% to $286 mil. Approximately five percentage points of SmithKline's total 16% quarterly sales increase could be attributed to favorable foreign currency exchange rates, the company indicated. The firm explained that the translation "had the effect of adding $44 mil. to quarterly sales." For the first six months of 1987, SmithKline reported sales of just over $2 bil., an increase of about 16%. Net income rose 18% to $392 mil. Again, ethical pharmaceuticals, up 15%, made up about half, or $1 bil., of corporate volume. The company noted that six-month U.S. sales of Tagamet rose 14%, while Dyazide sales grew 3%. Genentech reported a 21% improvement in sales of Protropin during the second quarter. Sales of the recombinant human growth hormone product reached $20 mil. in the three months ended June 30. The biotech firm also generated an additional $24 mil. in contract revenues, pushing total revenues to $48 mil., an increase of 46%. Net earnings climbed 102% to almost $6 mil. "after the effect of extraordinary item after a tax loss carryforward," the firm explained. For the first six months of 1987, Genentech reported revenues of $86 mil., an increase of 40% over the first half of 1986. Net income rose 95% to nearly $9 mil. Six-month sales of Protropin were up 111% over the previous year, the firm said. Carafate became Marion's second $100 mil. product in fiscal 1987 (year ended June 30), the company noted, with sales growing approximately 80% over the previous year. "Carafate's total prescriptions now amount to a 10% market share in the highly competitive anti-ulcer field," Marion said. "Total prescriptions are now being written at a rate of approximately 300,000 per month, compared to 204,000 per month a year ago." Marion also reported that total prescriptions of its calcium channel blocker Cardizem are currently being written at a rate of 895,000 per month, up from 690,000 a year ago. "Cardizem is now the largest-selling cardiovascular product in the U.S.," the company noted. "Fiscal 1987 sales of Cardizem reached nearly $350 mil., up more than 85% over the prior year." Marion reported that sales for the fourth quarter ended June 30 increased 59% to $188 mil., while net earnings rose 96% to $29 mil. Twelve-month sales increased 50% to $597 mil., and net earnings were up 76% to $97 mil. "This constitutes the fifth consecutive year of annual earnings growth of 50% or more," the company remarked. "Earnings growth exceeded 40% for the 20th consecutive quarter." Chart omitted.
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