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ABBONINE-MONTH PHARMACEUTICAL/NUTRITIONAL VOLUME APPROACHES $ 2 BIL.; BIOGEN SECOND-HALF 1988 RESULTS WILL BE BREAKEVEN, CEO VINCENT PREDICTS

Executive Summary

Abbott's worldwide pharmaceutical and nutritional business approached $ 2 bil. through the first three quarters in 1988, making up just over half of corporate volume. The company reported that for the nine months ended Sept. 30, sales of pharmaceuticals and nutritionals totaled $ 1.9 bil., a 14% increase over the comparable 1987 period. Fueled by a strong international performance, total shares rose 15.1% to $ 3.6 bil. during the nine months. Sales in international markets, including direct exports from the U.S., rose 21.2% and reflected both unit growth and a weaker U.S. dollar, while domestic volume increased 12.1%. Net earnings for the period surpassed $ 500 mil., increasing almost 20% to $ 530 mil. Abbott's other business segment, hospital and laboratory products, also achieved solid nine-month growth, advancing more than 16% to $ 1.7 bil. The company noted two product launches during the third quarter: Abbott Spectrum EPx, an automated clinical chemistry analyzer, and a new physician's office test for chlamydia. For the third quarter of 1988, Abbott reported that total sales increased 11.2% to $ 1.2 bil., while net earnings jumped 18.2% to $ 172 mil. "Improved earnings were attributable to the company's continued productivity improvement, higher volume, better product mix, as well as a weaker U.S. dollar and a lower U.S. income tax rate," Chairman Robert Schoellhorn remarked in a press release. "Abbott expects to achieve record sales and earnings for the 17th consecutive year in 1988." R&D expenses for the three months ended Sept. 30 were $ 115 mil., the firm reported, an increase of more than 25% over the third quarter of 1987. "Abbott's strong performance reflects the company's success in meeting our customers' needs for cost-effective, quality health care products," Schoellhorn continued. "We remain confident that our targeted technology, balanced diversity and the outstanding productivity of Abbott employees worldwide will continue to be a winning combination." As previously announced, Biogen reported its first profitable quarter since going public in 1983. The biotech firm booked net income of $ 361,000 for the third quarter ended Sept. 30 on revenues of $ 8.8 mil. By comparison, Biogen had revenues of $ 1.8 mil. in the third quarter of 1987 and reported a net loss of $ 6.9 mil. Contributing to Biogen's revenue stream are increased product royalties from Schering for Intron A (alfa interferon) and licensing fees from the company's hepatitis B patent. Biogen's proprietary product development program is also showing signs of life; the company announced this week that its soluable CD4 receptor product for AIDS, Receptin, has entered the clinic (see T&G-4, this issue). For the nine months ended Sept. 30, Biogen reported revenues of $ 20.8 mil., a three-fold increase over the $ 6.8 mil. reported a year ago, and booked a net loss of $ 1.2 mil. Biogen's net loss through the first nine months of 1987 was $ 19 mil. "We expect the financial results for the second half of 1988 to be breakeven or better," Biogen Chairman James Vincent remarked. "While revenues and expenses will fluctuate quarter to quarter as we continue our product development programs, results for the nine-month period clearly demonstrate that the company has achieved a financial stability which we believe is sustainable." Genetics Institute said that its two first proprietary products, macrophage colony stimulating factor and a "novel" TPA will enter clinicals "shortly." For the third quarter ended Aug. 31, Genetics Institute reported a 15% increased in revenues to $ 6.3. However, the company's net loss grew from $ 2.2 mil. to $ 4.5 mil. during the three months. "The current losses result from planned investment in self-funded pharmaceutical product development, and start-up of additional process development and manufacturing facilities in Andover, Mass." President Gabriel Schmergel explained. Chart omitted.

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