SEARLE CALAN SALES PROPEL MONSANTO DRUG DIVISION TO FIRST PROFITABLE QUARTER SINCE MERGER; CALCIUM CHANNEL BLOCKER ON WAY TO $325 MIL. 1989 SALES
Searle Calan (verapamil) sales are expected to "exceed $325 mil." in 1989, Monsanto predicted in its third quarter sales and earnings report. Monsanto attributed Searle's rebounding performance "in large part to the Calan family of antihypertensive drugs," which the company said "will exceed $325 mil. in 1989." The diversified chemical company also noted that the launches of the prostaglandin anti-ulcer drug Cytotec "are proceeding" in the U.S., the U.K., and Canada, and that sales of the drug "are anticipated to eventually reach several hundred million dollars annually." Searle sales of $299 mil. in the three months ended Sept. 30 were up 24.1% over the same period in 1988, generating $14 mil. in operating profit compared to a $7 mil. operating loss the previous year. The profitable quarter was Searle's first since being acquired by Monsanto in 1985. "It's a milestone," Monsanto Chairman and CEO Richard Mahoney pointed out. He added that Searle will be profitable this year; through nine months the unit had operating earnings of $2 mil. on sales of $868 mil., putting Searle on track to easily surpass $1 bil. in sales. Mahoney noted that as recently as 1987 Searle posted operating losses of "nearly $120 mil." The growth of the Calan brand has been fueled largely by Calan SR, a once-daily verapamil product approved for hypertension that could generate $300 mil. in sales this year by itself. Searle has been openly proclaiming the success of the sustained release verapmail. In recent trade journal advertising, the company headlined Aug. 23 as the day that Calan SR topped the $200 mil. mark for 1989. Searle's product was the first sustained release calcium channel blocker and the first to carry a hypertension claim. However, the product is facing increased competition as Marion and Pfizer are in the process of launching sustained release versions of their respective calcium channel blockers -- Cardizem SR (see related brief) and Procardia XL. Pfizer reported flat earnings in the third quarter due to "continued strong investment in R&D and in marketing expenses for the launches of several new products." The launch costs presumably include Procardia XL. Approved on Sept. 6 ("The Pink Sheet" Sept. 11, p. 3), Procardia XL is being discounted to Pfizer's immediate release Procardia by 18% on a per treatment day basis in order to encourage switching to the newer product. Pfizer has said that the "relative discount will probably remain" beyond the launch period ("The Pink Sheet" Oct. 9, T&G-7). "Procardia XL is already available in drug stores, and we expect it to contribute significantly to Pfizer's growth over the next several years," the company noted in its sales and earnings release. Procardia is already a large franchise for Pfizer in the U.S. with $364 mil. in sales last year. For the third quarter, Pfizer reported a 4% increase in sales to $1.44 bil. Net earnings were up .3% to $217.5 mil. Through nine months, Pfizer sales are up 4% to $4.18 bil. while net income is off 8.6% from 1988 at $594 mil., due largely to a poor second quarter. Pfizer reported that health care sales increased 3% and consumer product sales grew by 23% in the three months ended Sept. 30. Within the health care segment, Pfizer said, pharmaceutical sales increased by 4% and sales of hospital products grew only 1%. The strong dollar is hurting overseas sales comparisons with last year for most of the multinational pharmaceutical firms. Pfizer, for example, reported that the "continued strengthening of the U.S. dollar reduced third quarter sales growth by 3 percentage points." Similarly, Merck Chairman Roy Vagelos noted that "the effect of a stronger U.S. dollar relative to foreign currencies reduced third quarter and nine month sales growth by 2 and 3 percentage points respectively." For Merck, Vagelos said, "sales outside the U.S. accounted for 47% of sales for the first nine months, compared with 50% for the same period last year." Overall, Merck sales grew 11.2% in the third quarter to over $1.6 bil., generating a 25% increase in net income to $390.5 mil. For nine months, Merck sales are up 8.7% to $4.79 bil. while net earnings have increased 25.3% to nearly $1.13 bil. "Income growth for the nine months resulted from strong unit volume gains, a better product mix, expense control actions, productivity improvements and a lower tax rate," Vagelos said. Merck credited the company's sales performance to "strong sales gains" by Mevacor, Vasotec, Pepcid, Primaxin, Zocor, Prinivil, and ivermectin. Upjohn reported that foreign pharmaceutical sales "were flat due primarily to the strengthening of the dollar" while worldwide human health care product and services sales grew 8%. Overall, third quarter sales grew 9.7% to $715.3 mil. Net earnings were up 7.2% to $96 mil. for the quarter. "Pharmaceutical sales in the U.S. benefited significantly from preannounced price increases on several major products," Upjohn said. The company followed 14% price increases for Xanax and Halcion in February with price increases of another 7% in September. Upjohn also raised prices for Micronase and Ansaid in September. "Sales of Micronase, the oral antidiabetes agent, were up significantly compared to third-quarter 1988 sales," Upjohn reported. "Ansaid and Motrin IB . . . contributed significantly to U.S. sales growth during the quarter." The company said that Ansaid "has achieved a 4% share of its market since its introduction in January." While Xanax sales were up, the company noted, Halcion sales "declined from year-earlier levels." Bristol-Myers Squibb reported its last quarterly sales and earnings performance as separate companies. Bristol-Myers sales increased 5% to $1.59 bil. while net earnings grew 15% to $266 mil. Squibb sales were up 7% to $730 mil. with net income up 17% to $144.5 mil. Combined sales on a pro forma basis, Bristol-Myers Squibb said, "increased 6% to $2.32 bil. for the quarter" while combined net earnings "increased 16% to $410.7 mil. Through nine months, Bristol-Myers Squibb pro forma sales increased 6% to $6.8 bil. with net earnings up 14% to $1.1 bil. On a combined basis, Bristol-Myers Squibb reported, "domestic sales for the quarter increased 7% while international sales increased 3%, and for the nine months, domestic sales increased 6% while international sales increased 7%." Chart omitted.
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