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Executive Summary

Genentech's Activase (tissue plasminogen activator) had a net sales gain of 25.3% to $48.1 mil. in the first quarter of 1989, up from $38.4 mil. in sales a year ago, the biotech firm reports. Compared to fourth quarter sales of $34.7 mil., Activase sales were ahead 38.6% in the first three months of 1988, the company noted in a recent financial release. Genentech CEO Robert Swanson attributed the sharp rise in Activase sales to the firm's increased promotional outlays for the product, saying: "We believe our increased marketing expenditures are paying off." The company is in the process of bolstering its sales force to 300 from 200 to cover expanded detailing of TPA to office-based cardiologists. On May 1, Activase will receive a boost from co-detailing by Boehringer Ingelheim's 400-person U.S. sales force. Genentech also has enlisted 150 cardiologists to speak at medical symposia on the benefits of throm-bolytic therapy. In addition, Genentech received FDA approval on Feb. 23 for a reduced infarct size and mortality reduction indication. The expanded claim removed one of Activase's marketing disadvantages to I.V. streptokinase, which was initially approved with the reduced mortality claim. "Thus far," Swanson noted, "we are on target in meeting our goal of increasing Activase sales 20% to 25% this year" to $180-$190 mil. Genentech sales of Activase in 1988 were $151.4 mil. While boosting revenues, the strengthened marketing efforts took their toll on earnings: net income dropped 51.2% in the quarter to $7.4 mil. The earnings decline was "primarily due" to the Activase promotions, but also stemmed from higher R&D outlays, Genentech said. The company increased marketing, general and administrative expenses by $10.2 mil. in the first quarter to $29 mil. Research and development expenditures climbed 42.8% to $37.7 mil. Overall, Genentech generated $91.1 mil. in revenues during the first quarter, up 22.4%. Net product sales increased 15% to $73 mil., although volume for Genentech's Protropin (somatrem for injection) were flat -- sales of the human growth hormone were $24.9 mil. in the first quarter compared with $25.1 mil. in first quarter 1988 sales. Worldwide sales of Squibb's ACE inhibitor Capoten (captopril) grew 18.8% in the first quarter to $293.5 mil. Domestic sales of Capoten and Squibb's captopril/diuretic combo Capozide climbed 17% to $117.8 mil. By comparison, international volume gains outpaced U.S. growth for the two therapies, rising 20% to $175.5 mil. Commenting on the continuing success of the ACE inhibitor, Squibb Chairman and CEO Richard Furlaud said that Capoten "appears on track to achieve its projected sales volume for the year of $1.3 bil., following its billion dollar performance last year." Capoten accounted for a little more than half of Squibb pharmaceutical sales, which reached $571 mil. in the quarter, a gain of 12% over the year-ago period. In addition to Capoten, Rx drug revenue growth was led by the monobactam antibiotic Azactam, Squibb's antifungals and the diagnostic imaging product Isovue, the company said. Azactam (astreonam) was the primary gainer among Squibb's antibiotics. With volume of $33.3 mil., it generated 28% higher worldwide sales than in the first quarter of 1988. Sales of other antibiotics were flat, the company reported, and Velosef (cephradine) volume declined due to pressure from generics; however, the company's multisource antibiotic products turned in sales increases, which helped to "largely offset" the Velosef drop, Squibb noted. Sales of the non-ionic cardiology and radiology diagnostic imaging agent iopamidol (Isovue) topped $44 mil., a gain of 27% from last year. Older diagnostic imaging agents experienced "small decreases" in sales as did Squibb's CNS drugs. "Traditional" pharmaceutical product sales were flat, the company said. Consolidated revenues rose 11% to $662.7 mil. and net income increased 17.2% to $106.5 mil. The net sales gain was 4% less than it would have been if the company had not closed the first quarter reporting of U.S. sales five days earlier than in previous years in a data processing and accounting efficiency move, Squibb pointed out. Chart omitted.

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