SMITHKLINE BEECHAM's AUGMENTIN ON PACE FOR $ 1 BIL. SALES IN 1991 WITH 32% SALES GAIN IN FIRST QUARTER; BARR SALES UP 31% TO $ 70 MIL. THROUGH NINE MONTHS

Worldwide sales of SmithKline Beecham's Augmentin grew 32% in the first quarter -- a pace that if sustained through 1991 would put the product over $ 1 bil. in sales. At a recent meeting with analysts, SmithKline Beecham predicted that Augmentin (amoxicillin/clavulanate) is on track to become the company's second product, after Tagamet, to generate over $ 1 bil. in sales annually ("The Pink Sheet" April 22, p. 5). Sales of Augmentin, the number-two selling oral anti-infective in the world behind Lilly's Ceclor, grew by 47% to $ 793 mil. in 1990, the first full year of marketing with the support of SmithKline's sales force. Timentin (ticarcillin/potassium clavulunate), with a 14% sales gain worldwide in the first quarter, is also apparently benefiting from the increased marketing support. The company noted in a May 8 press conference that Augmentin's and Timentin's double-digit gains "continued to build on the exceptionally strong" 1990 first quarter. In addition, Tagamet sales (cimetidine) increased 8% worldwide in the first three months of 1991. Sales for the hepatitis B vaccine Engerix-B grew 6% in the U.S. and 27% worldwide in the quarter, the company added. Despite the continued sales growth of major products, SmithKline Beecham's worldwide pharmaceutical sales declined 4% in the quarter to $ 1.1 bil., due primarily to the effect of the stronger dollar. Trading profits of $ 344 mil. were 10% higher, but "adverse conditions in isolated areas affected results," the company said. Excluding the currency impact, pharmaceutical sales would have increased by 5% and trading profits by 20%, the company calculated. Currency changes also had an impact on corporate revenues, which declined 4% to $ 1.92 bil. SmithKline Beecham noted that the U.S. dollar was "12% weaker than during the first quarter of 1990." Corporate trading profit from continuing operations rose 9% to $ 463 mil. SB's consumer brands "continued to grow in the face of difficult conditions in some markets," the company said. Contac sales grew 31% to lead a "strong performance" in the U.S., and Tums sales had a 12% increase. However, the company's personal care products, which include Oxy and Aqua-Fresh, did not fare as well. Personal care sales were "slightly below last year with the U.S. and U.K. adversely affected by trade destocking caused by recessionary pressures," SmithKline Beecham said. However, the company added, in the U.S., the U.K., and elsewhere, market shares "were at least maintained" for major personal care brands. On the generic drugs front, Barr Labs' sales increased 31.1% to $ 69.6 mil. through the nine months of FY 1991 ended March 31. Three month revenues of nearly $ 25 mil. were 33.8% ahead of the same period last year and represented Barr's third consecutive quarter of 20%-plus sales increases. Barr earnings posted equally impressive gains. Quarterly net income was 20.3% higher at $ 1.3 mil. and was $ 3.6 mil. through nine months, an increase of 251.4% over the same period a year ago. Barr attributed its improved profitability to second quarter ANDA approvals that boosted sales, and to an improved product mix that resulted in higher gross margins. One of the two main whistleblowers in the ongoing generic drugs investigation along with Mylan, Barr repeatedly has claimed that it has been a target of FDA retaliation, which, the company asserts, included a two-year moratorium on Barr ANDA approvals. However, the company has received three ANDA approvals thus far in fiscal 1991, including an Oct. 16 approval for a generic version of methotrexate 2.5 mg tabs. Barr reported that the drug price rebates required by the Pryor Medicaid Prudent Purchasing Act, which went into effect Jan. 1, cost the company $ 357,000 in net income, or what would have been about 20% of net earnings. In addition, Barr's first quarter net income was affected by a $ 1 mil. increase in R&D expense to $ 1.9 mil. in the third quarter, the company said. Chart omitted.