UPJOHN SALES UP 6% TO $2.65 BIL. FOR 9 MONTHS, BUT HALCION DROPS 47%; AHP PHARMACEUTICAL SALES UP 16% TO $1.2 BIL. IN 3rd QUARTER; BARR TOPS $100 MIL.

Xanax, Provera, Cleocin and Solu-Medrol are keeping Upjohn's U.S. drug business growing ahead of its full corporate rate: the U.S. drug business turned in a 16% gain in the third quarter, more than double the 7.6% corporate sales growth rate. Through nine months, Upjohn's total corporate sales were $2.65 bil. (up 6.4%). In the third quarter, total corporate sales were $894.4 mil. While global sales rose overall for Upjohn pharmaceutical products, Halcion sales showed a big decline, dropping 47% during the third quarter. The benzodiazepine, which has experienced negative publicity for a year and a half, has been repackaged and relabeled by Upjohn. The company still faces lawsuits alleging that the sleep aid causes harmful side effects. Also showing a sales decline was the NSAID Ansaid, which faced increased competition, Upjohn noted. Upjohn earnings fell 1.7% to $137.8 mil. in the quarter, after the company took a $15 mil. charge to after-tax earnings. The income decline and charge resulted from a previously announced restructuring program that included an early retirement program, which contained a gain from a partial settlement of a pension plan and severance payments for employees located outside the U.S., the company said. Through nine months, earnings rose 2.6% to $411.5 mil. Upjohn Chairman Theodore Cooper, MD/PhD, noted that the restructuring charges "constrained" earnings growth in the quarter but said the "actions were necessary and underscore our ongoing commitment to build a solid foundation for the future." Merck sales topped $7.06 bil. through nine months, a 12.3% gain from the same period a year ago. Quarterly sales also increased by double digits, up 16.4% to $2.46 bil. Sales outside the U.S. generated 46% of total sales through nine months, one percentage point higher than in the same period last year, Merck noted. Sales growth was again led by Merck's newer products. "Solid" unit volume gains were reported by the company for both domestic and international markets. Excluding foreign currency exchange rates, sales rose 12% for the quarter and 11% through nine months, the company said. Meanwhile, "due to competition, unit sales declined for a group of longer-established human and animal health products," Merck noted. Leading the nine month results were Vasotec, Vaseretic, Prinivil, Mevacor, Zocor, Pepcid and Prilosec, Merck said. The latter two drugs continue to show rapid growth, Merck noted. The company also pointed to "strong" vaccine sales during the period, particularly from its recombinant hepatitis B vaccine, Recombivax HB. Proscar for benign prostatic hypertrophy is now available in the U.S., U.K., Italy, Finland, Sweden and France. Merck said that "experience to date" for Proscar marketing "is consistent with our expectations that an extensive education program is required to heighten awareness of the disease, improve understanding of its natural history and communicate the benefits of treatment" with Proscar. The statement appears to be a response, in part, to revisions by securities analysts during the quarter of earlier projections for Proscar sales. Third quarter net income increased 16.7% to $644.5 mil., and nine-month earnings were $1.87 bil., an increase of 17.3%. "Strong unit volume gains, better product mix, cost controls and productivity improvements, and a lower tax rate" bolstered net income growth through nine months, Merck said. Merck Chairman Roy Vagelos noted that "the favorable effect from exchange was more than offset worldwide by the net impact of inflation." American Home Products pharmaceutical sales worldwide increased 16% to $1.21 bil. in the three months and 15% to $3.41 bil. through nine months, AHP reported Oct. 15. U.S. pharmaceutical sector sales rose 12% and 15% through the three and nine-month periods, respectively, led by "female health care, anti-inflammatory and infant nutritional product categories," AHP said. Outside the U.S., pharmaceutical sales increases of 23% and 15% for the quarter and nine months "principally" resulting from higher sales of infant nutritional product and female health care products, the company said. Consumer health care sales grew 13% during the quarter to $463.5 mil. worldwide and increased 14% through nine months to $1.22 bil. In the U.S., where consumer health care product sales rose 12% and 15% for the three and nine-month periods, Advil and the company's cough/cold lines paced the growth, AHP said. International sales increased 15% from July through September and 11% for the first nine months of 1992. AHP earnings increased 11.1% to $427.7 mil. in the quarter on consolidated sales of $2.11 bil. Through nine months, net income rose 12.7% to $1.13 bil. on sales of $5.86 bil., 11.4% higher than in the comparable period of 1991. Net sales of all health care products were up in the quarter and the nine months by 14% and 13% worldwide, respectively. Pfizer pharmaceutical sales rose 21% during the third quarter and are ahead 17% year-to-date, the company reported Oct. 13. Net sales rose 3.1% to $1.83 bil. through the three months and are ahead 3.6% through nine months at $5.28 bil. Net income for the quarter was $297.5 mil., a gain of 8.3% and earnings total $796.4 mil. year-to-date, an increase of 10.4% for Pfizer. The divestiture of the Coty cosmetics business ("The Pink Sheet" May 11, T&G-2) was "especially significant" to the quarterly results, the company noted. The sale of Coty to the German firm Benckiser for $440 mil. was completed in June. Pfizer's R&D expenditures totaled $212.8 mil. in the third quarter, an increase of 22.7% over the comparable quarter last year, unaudited data for ongoing operations show. For the year through Sept. 30, R&D outlays are up 19.2% and nearly $100 mil. from the year-ago period at $612.7 mil. Marketing, distribution and administrative expenses increased more moderately, rising 15% to $690.6 mil. in the quarter and 15.9% to $1.77 bil. through nine months. Genentech reported Oct. 15 that sales of Protropin recombinant human growth hormone increased 7.4% to $51 mil. in the third quarter. The company attributed the continued growth in the product to the "increasing number of patients diagnosed as growth hormone inadequate." Third quarter revenues from Activase TPA rose 5.8% to $49.4 mil. The sales rise "stems largely" from Genentech's recent introduction of a 100 mg Activase vial, the standard dose for the thrombolytic agent. Inventory sell-in to wholesalers and hospital pharmacy stocking of the new vial size during the quarter "has had a temporary impact on sales," the company noted. Genentech consolidated revenues were up 1.7% in the third quarter (ended Sept. 30) to $137.3 mil. and ahead 1.5% through nine months at $402.3 mil. Genentech earnings for the quarter declined 43% to $7.7 mil. from $13.5 mil. a year ago; for the year to date, net income has dropped 66.9% to $14.6 mil. As previously reported in its second quarter financial statement, Genentech attributed the lower earnings to greater R&D outlays. Expenditures for research and development during the third quarter were $69.6 mil., up $10.3 mil. from the same period of 1991. Through nine months, Genentech has spent $208.9 mil. on R&D, an increase of 29.3% from the previous year. Barr Labs sales for the 12 months ended June 30 topped the $100 mil. benchmark, rising 7.2% to $100.8 mil. For the fourth quarter, however, sales declined 20.6% to $19.4 mil. compared to $24.4 mil. in the year-ago period. Barr reported a loss for both the quarter and the year of $ 1.3 mil. and $1.9 mil., respectively. The losses were attributable primarily to "unusually large inventory provisions" taken in the third and fourth quarters, the generic drug firm said. In the third quarter, Barr had taken a loss of $2.4 mil. The inventory provisions result from the company's suspension of certain products beginning in April 1992. Without the inventory provisions, Barr Labs net earnings would have been "approximately $800,000" in the fourth quarter and $2 mil. in FY 1992. Also contributing to the losses are higher regulatory and legal fees associated with Barr's ongoing legal battle with FDA, the company reported. General and administrative expenses for FY 1992 were $12.4 mil., up 30.5% from the previous year. A decision in U.S. v. Barr in Newark federal court is expected by mid- November (see related item, T&G-12).