MEDCO CONTAINMENT’s FISCAL FOURTH QUARTER SALES INCREASE 37% TO $516.7 MIL.; BIOCRAFT SALES CLIMB 8% TO $22.2 MIL. AS FIRM POSTS PROFIT BASED ON SETTLEMENT
Medco Containment's sales increased 37% to $516.7 mil. for the company's fiscal fourth quarter ended June 30. For the fiscal year, sales increased 35% to $1.8 bil. Earnings for the quarter increased 50.3% to $26.2 mil. For the year, earnings were up 75.4% to $102.5 mil. Without nonrecurring gains recognized in the first three quarters of the year due to acquisitions by Medco subsidiaries, earnings would have been $90.5 mil., up 61.6%. Medco said it "dispenses more than 525,000 prescriptions a week through its mail-service pharmacies and processes more than 925,000 prescription drug claims a week through a network of approximately 57,000 retail pharmacies." "In the past several months," Medco "has been awarded over 22 significant new accounts for which it expects to start providing drug benefit management services between now and the end of calendar 1992," the company said. The new accounts cover 1.6 mil. people, Medco said. "Existing customers providing drug benefits for over 1 mil. people, for which Medco currently provides mail- service pharmacy services, have recently selected Medco to manage their retail prescription drug benefits in calendar 1993," the company added. Medco will also be expanding its business through acquisitions. On Aug. 17, the firm announced that it will acquire the managed mental health care firm American Biodyne for 4 mil. shares of Medco stock. The deal, valued at $121 mil., is contingent upon approval by American Biodyne shareholders and regulatory review. The firms expect the merger to occur in the last quarter of calendar 1992. Medco described the acquisition as "a significant step in developing our managed mental health business." South San Francisco-based American Biodyne reported revenues of $65 mil. and net income of $2.3 mil. for the nine months ended June 30; the firm provides mental health care services for programs covering 5.4 mil. lives nationwide. "Following the merger, American Biodyne, along with its current management team, will be the focal point of Medco's managed mental health business," Medco said. Medco took a first step into the mental health care field with the April acquisition of Personal Performance Consultants. Biocraft Labs reported an 8% sales increase to $22.2 mil. for the generic drug maker's fiscal first quarter ended June 30. The company also returned to profitability in the three-month period on the strength of a $1.3 mil. settlement with Merck relating to Biocraft's successful challenge of the Moduretic (amiloride/hydrochlorothiazide) patent. The company posted net income of $673,000 compared to a loss of $905,000 in the first quarter of fiscal 1992. Biocraft lost a total of $6.7 mil. for the year. The Snyder family, majority owners of the company, recently announced that Biocraft was for sale ("The Pink Sheet" June 1, T&G-6). Perrigo reported fiscal fourth quarter sales of $108.8 mil. for the April-June period, up 58%. The bulk of the increase ($ 25.5 mil.) was attributable to Cumberland-Swan, acquired by Perrigo in January. Excluding Cumberland-Swan, sales were up 20.9% to $83.2 mil. Fiscal 1992 sales for the store-brand OTC manufacturer were up 45.7% to $409.8 mil. Without Cumberland- Swan's $50.3 mil. contribution, sales would have been $359.5, up 27.8%. Earnings jumped 167% to $7.5 mil. for the quarter and 133.9% to $28.5 mil. for the year. "Higher sales in both the quarter and fiscal year were primarily attributable to increased sales of analgesics, cough and cold remedies, and oral hygiene products," the company said. "Sales gains in these product categories resulted from strong store-brand sales experienced at the retail level and new products sold to existing customers." Perrigo, which completed an initial public offering in December, indicated that it may pursue new acquisitions. The company has "a new $150 mil. revolving credit agreement which positions us to take advantage of future opportunities."
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