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ELAN NET EARNINGS INCREASE 87% THANKS TO CARDIZEM SR AND VERELAN; MEDIMMUNE CYTOGAM REVENUES REACH $ 3.9 MIL. IN FIRST SIX MONTHS OF 1991

Executive Summary

U.S. sales growth for Cardizem SR and Verelan helped Elan post an 87% increase in earnings to (BRITISH POUND)2.6 mil. ($ 3.8 mil.) for its fiscal 1992 first quarter (ended June 30), the company reported Aug. 7. The sharp increase "can be attributed to the continued growth in the U.S. market for Cardizem SR and Verelan and to improved operating efficiency in our manufacturing units," Chairman and CEO Donald Panoz said. Marion Merrell Dow markets the twice-a-day formulation of Cardizem (diltiazem) in the U.S.; Lederle and Wyeth-Ayerst comarket the once-a-day verapamil formulation Verelan. Elan reported a 15% increase in first quarter revenues to (BRITISH POUND)13.6 mil. ($ 20.1 mil.). Panoz predicted continued growth for the company and said the company's $ 43.5 mil. stock offering in June will enable Elan "to continue the rapid development of its new technologies and products while maintaining a strong balance sheet." Elan had (BRITISH POUND)41 mil. ($ 60.4 mil.) in cash on hand as of June 30. Gaithersburg, Md. startup MedImmune reported second-quarter revenue of $ 4.5 mil. compared to revenue of $ 675,000 last year, including $ 1.5 mil. in product sales from its CytoGam immunotherapeutic for cytomegalovirus infection in renal transplant patients. MedImmune's revenues for CytoGam are from the company's licensing partner Connaught, which has not yet begun commercial sale of the product (formerly referred to as CytoMune-I.V.), but intends to do so "in the near future," MedImmune said. MedImmune has shipped $ 3.9 mil. of CytoGam to Connaught since January. MedImmune licenses CytoGam from the Massachusetts Public Health Biologic Lab, which developed the I.V. immune globulin product and received marketing approval from FDA in April 1990. MedImmune noted that CytoGam shipments were lower in the second quarter because of "a scheduled shut-down of the manufacturing facility for renovation." Modifications in the plant will "triple production capacity." The factory came back on line this month, the company noted. Another boost to revenues came from a $ 1.7 mil. milestone payment from Merck, MedImmune said. The payment reflects "the successful completion of the first phase" of the company's development of a Bacille Calmette Guerin (BCG) derived AIDS vaccine, the company said. Under a November agreement, Merck has committed over $ 13 mil. to the project. For the quarter, its first as a public company, MedImmune reported net income of $ 1.2 mil. versus a loss of $ 700,000 in the same period a year ago. Through the first half of the year, MedImmune has revenues of $ 8.3 mil. and net income of $ 1.5 mil. The company's initial public offering, completed in May, coupled with a prior private placement netted MedImmune a total of $ 29.1 mil. to further its research and development, the company noted. U.S. Bioscience's Hexalen second-quarter sales increased 64% over the first quarter to $ 1.1 mil. Since its launch in late January, the ovarian cancer treatment has generated sales of $ 1.7 mil., the company said. Total revenues for U.S. Bioscience were $ 2 mil. for the quarter and $ 3.5 mil. for the first half, more than double the company's figures for the previous year. For the quarter, the company reported a net loss of $ 2.2 mil. For the six months, the net loss was $ 3.7 mil. U.S. Bioscience noted that "operating expenses increased over the prior year due to increased expenditures for research and development, which included developmental activities associated with the chemical scale-up of Hexalen and other drugs and increased clinical trials in both the U.S. and Europe." R&D spending for the first half of the year increased 76% to $ 3.8 mil. Moore Medical reported that sales for the second quarter from its wholesaling business increased 8% to $ 84.3 mil. while first half sales are up 10% to $ 168 mil. The company noted that it had "strong second quarter sales growth in our generic pharmaceutical line and medical and surgical supplies." However, President and CEO Mark Karp said that "brand name pharmaceuticals have continued to yield inadequate gross margins. As a result, we have raised selling prices and have cut operating expenses through layoffs of management and other personnel. It is too early to know how much these measures will offset the lower anticipated sales." Net income for the quarter declined 57% to $ 144,000, the company reported. For the first half, net income is down 20% to $ 401,000. "Our 1991 goals and actions continue to focus on improving the financial performance of the company," Karp said. The company recently sold its West-ward Pharmaceuticals generic manufacturing business to Hikma. West-ward was treated as a discontinued operation in Moore's report. Chart omitted.

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