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FISONS OPTICROM SALES INCREASE 33% IN FIRST HALF DESPITE CONTINUED ABSENCE FROM U.S. MARKET; Rx DIVISION’s PROFITS PLUNGE 66% AS COMPLIANCE COSTS GROW

Executive Summary

Fisons' Opticrom sales are increasing overall even though continued regulatory difficulties have kept the anti-allergy eyedrops out of the U.S. market for the past two years. Opticrom (cromolyn sodium) sales were up 33% to (British pound)24 mil. ($47.3 mil.) in the first half of 1992, Fisons said in its mid-year sales and earnings report released Sept. 8. "A severe hay-fever season led to Opticrom sales in the U.K. increasing by 96% during the year from mid-1991," the firm said. "Prescription demand" in all European markets was up 41% in the first six months of 1992, Fisons added. Opticrom has not been marketed in the U.S. since July 1990 due to manufacturing difficulties at Fisons' Holmes Chapel, U.K. facility. The last public comment about a late April inspection was that Fisons "is responding to...observations" made by FDA inspectors ("The Pink Sheet" May 11, T&G-13). Fisons noted Sept. 8 that manufacturing difficulties also have led to shortages of Opticrom in Japan. The cost of bringing its pharmaceutical manufacturing operations into compliance with FDA regulations is affecting short-term operating results. Fisons reported that pharmaceutical sales declined 13% to (British Pound)206.9 mil. ($407.6 mil.); profits at that division plunged 66% to (British Pound)23.1 mil. ($45.5 mil.). "A concentration of effort on systems, procedures and re- training has affected the worldwide supply of many pharmaceutical products, and this factor is reflected in these results," Chairman Patrick Egan explained. "Unfortunately, the major impact was felt in the important, high volume months of May and June." "Production, quality control and other technical functions have been augmented by new experienced personnel and updated systems, at considerable cost, in order to ensure compliance with the regulatory requirements of the U.S.," Egan continued. Fisons U.S. Senior VP-R&D Peter Johnson was given worldwide R&D responsibility in July, the latest in a series of management changes following the discovery of Fisons' compliance problems by FDA inspectors. Corporate sales declined 2% to (British Pound)567.4 mil. ($ 1.12 bil.) for the six months. Earnings dove 59% to (British pound)29.1 mil. ($57.3 mil.). The first half profitability decline follows a (British Pound)65 mil. drop in profits for the second half of 1991 attributable to manufacturing problems, including the withdrawals of Opticrom and Imferon injectable iron from the U.S. ("The Pink Sheet" Dec. 23, 1991, p. 7). Fisons did not report first half Imferon sales; the April FDA inspection did not cover Imferon manufacturing. Pre-tax profits for the first half of 1992 were down 54% to (British Pound)45.7 mil. For the full year 1990 (the last full year before the product withdrawals), Fisons reported pre-tax profits of (British Pound)230 mil. Sales of the inhaled asthma treatment Tilade (nedocromil), for which an NDA is pending in the U.S., increased 9% to (British pound)12 mil. ($23.6 mil.). "Tilade prescription demand worldwide has grown by 32% over the year from mid-1991," Fisons said. The company noted that FDA had made "no observations" pertaining to "aspects of the Tilade NDA" following the April inspection. Fisons projected near-term approval for Tilade in the U.S. in January ("The Pink Sheet" Jan. 20, T&G-12). While two products kept off the U.S. market -- Opticrom and Tilade -- showed sales growth for the six months, the asthma treatment Intal, which has remained on the U.S. market, had a sales decline for the six months. Sales of Intal (inhaled cromolyn) dropped 10% to (British Pound)72 mil. ($141.8 mil.). The decline was apparently due to trade de-stocking; Fisons said that prescription demand for Intal increased 16% during the period. Increased prescriptions for Intal and Tilade "show a strengthening of Fisons position in respiratory treatment, demonstrating the increasing support from the medical profession for the early use of group products to provide anti-inflammatory therapy," the company maintained.
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