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Executive Summary

Upjohn expects an advisory committee review of its benzodiazepine hypnotic sleep-aid Halcion (triazolam), the company said in an April 15 sales and earnings press release. FDA and Upjohn agreed to a relabeling and repackaging of the drug in the wake of international actions to withdraw or relabel the product. The actions were precipitated by Upjohn's disclosure of errors in the original Halcion product applications and by continued concerns about the side-effect profile of the drug. Upjohn continues to "firmly believe that Halcion is a safe and effective product when used as recommended." The company said it "welcomes the opportunity to discuss the safety and effectiveness of Halcion at an FDA advisory committee meeting." FDA's Psychopharmacological Drugs Advisory Committee reviewed the safety profile of Lilly's Prozac in September and found "no credible evidence" linking Prozac to suicidal behavior. Upjohn said no date has been scheduled for the proposed review of Halcion. The negative publicity and withdrawals of Halcion, along with generic competition overseas, had a negative impact on Upjohn's first quarter results. Sales of the sleep medication declined 39%, Upjohn said. Price increases were unable to offset the decline in sales. According to "Red Book" pricing data, Halcion's U.S. price rose 10% from the first quarter of 1991 to the first quarter of 1992. Upjohn's human health care product sales increased 11% worldwide in the first quarter, the company said. "Sales in the U.S. benefited from special purchase incentives offered to customers at the end of the quarter," the company noted. Pharmaceutical sales growth was led by the progestational agent Provera, the anti-baldness treatment Rogaine, the diabetes treatment Micronase, and the anti-anxiety agent Xanax, Upjohn said. Two OTCs, the analgesic Motrin IB and the antidiarrheal Keopectate, "also contributed to the sales growth." Pharmaceutical sales growth outside the U.S. was 9%, the company said. Upjohn attributed the growth to "increased volume of Xanax, the antibiotic Dalacin, and the injectable steroid Solu- Medrol," and to increased sales in Eastern Europe and the former Soviet Union. Strength in those areas compensated for poor exchange rates and reduced Halcion sales, Upjohn added. R&D spending grew 10% to $126 mil. for the quarter, Upjohn noted. Spending included "accelerated enrollment in our clinical testing of Freedox, the lazaroid compound being tested for the treatment of head injury, spinal cord injury, subarachnoid hemorrhage and ischemic stroke, and expanding our efforts in the anti-AIDS area," Upjohn CEO Theodore Cooper said. Marketing and administrative expenses were also up about 10%. "New marketing programs included the promotion campaign for Rogaine for females and the antidiabetes agent Glynase PresTab." Upjohn corporate sales, including its agricultural, animal, and fine chemical products, increased 9% to $872 mil. Net earnings were up 8% to $144 mil., the company said. Abbott reported that sales of pharmaceutical and nutritional products were $997 mil. in the first quarter, jumping 15.7% from $861 mil. in the first quarter of 1991. The company highlighted "encouraging worldwide sales" of Biaxin (clarithromycin)." The oral macrolide was approved on Oct. 31 for treatment of sinusitis, pharyngitis/tonsillitis, pneumonia, bronchitis, and skin and skin structure infections. Biaxin was followed by the Jan. 31 approval of a second antibiotic, Omniflox (temafloxacin), an oral quinolone indicated for the treatment of lower respiratory tract infections, genito-urinary infections and skin infections. Worldwide corporate sales for the first quarter increased 13.6% to $1.9 bil. from $1.7 bil. in 1991, the company said. Earnings rose to $294 mil. up 15.8% for the quarter. Sales for Bristol-Myers Squibb remained relatively flat for the first quarter, increasing 2% to $2.8 bil, the company reported. All growth was generated by international sales, which increased 5%, explained BMS Chairman and CEO Richard Gelb. Excluding the effect of foreign exchange, international sales were up by 8%. Net earnings growth outstripped sales growth, jumping 11% to $548 mil. Merck reported sales growth of 9% with first quarter worldwide sales of $2.2 bil. Exchange rates reduced sales figures by 1%, the company said. Net income grew at a faster pace than sales, increasing 18% to $568.7 mil. Merck credited the favorable growth figures to "strong sales gains by Vasotec, Prinivil, Mevacor, Zocor, Pepcid, Prilosec and Primaxin." Sales of vaccines were also strong, the company said.

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