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Executive Summary

Upjohn's human health care sales increased 1% in the second quarter of 1992 despite a 50% decline in sales of the benzodiazepine hypnotic Halcion, the company said July 16. The anti-anxiety drug Xanax and the progestational agent Provera led second quarter sales growth, Upjohn said. Also contributing to growth were three OTC products: the analgesic Motrin IB, the anti-diarrheal Kaopectate and the anti-itch hydrocortisone medication Cortaid. Overall, Upjohn reported that its consumer products business "achieved strong sales growth" for the quarter. While Halcion sales have declined in each of the last three quarters due to negative publicity surrounding the product, Upjohn is also facing industry-wide pressures. In addition to Halcion, the company blamed "a shift in wholesaler buying patterns" and "efforts to moderate price increases" for its slow growth rate. "The rate of decline" in Halcion sales "appears to have stabilized," CEO Theodore Cooper commented. Upjohn reported Halcion sales declines of 23% in the fourth quarter of 1991 following the product's withdrawal in the U.K. and 39% in the first quarter of 1992. On May 18, an FDA advisory committee supported the continued marketing of the drug in the U.S. The nonsteroidal anti-inflammatory drug Ansaid and the prescription hair-loss treatment Rogaine also showed sales declines in the second quarter, Upjohn said. The firm's two oral antidiabetes agents, Micronase and the newly-launched Glynase, showed "slightly" higher combined sales. Corporate sales were up 3% for the quarter to $884 mil. Earnings were flat at $130 mil. Operating income actually decreased from $168 mil. to $160 mil.; a lower tax rate offset the decline. Upjohn noted that costs associated with its previously-announced early retirement program will be reflected in its third quarter results. Upjohn instituted a temporary hiring/wage freeze and early retirement program June 2. Abbott Labs pharmaceutical and nutritional sales climbed 14.4% for the second quarter to $972 mil., the company said July 8. For the first half, prescription drug and nutritional sales are up 15.1% to $1.97 bil. Corporate sales were ahead 13.4% for the quarter to $1.91 bil., for the first half, sales climbed 13.5% to $3.79 bil. Abbott reported a $215 mil. charge associated with its June withdrawal of the quinolone antibiotic Omniflox due to postmarketing adverse reactions. However, Abbott's May 1992 sale of its $272 mil. stake in Boston Scientific more than compensated for the pretax charge, with a net result that earnings rose 18.2% to $317 mil. in the quarter. Through six months, earnings are up 17% to $611 mil. Genentech reported July 16 that North American sales of its thrombolytic agent Activase (TPA) rose slightly in the second quarter to $44.6 mil. (from $44.5 mil. last year). Activase had been showing quarter-to-quarter declines since the publication of results from the ISIS-3 study, which concluded that streptokinase is as effective and may be slightly safer than TPA. Sales of Protropin human growth hormone showed a more robust 8% increase to $50.4 mil. in the quarter. Total revenues increased 5% to $136 mil., although continued aggressive growth in R&D spending led to a 70% decrease in net earnings to $3.4 mil.

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