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CYGNUS' NICOTROL PATCH ADDS $11 MIL. IN REVENUES TO THIRD QUARTER RESULTS, HOLDS 3.8% SHARE IN FOUR-WAY RACE; GENZYME PRODUCT SALES DOUBLE TO $44 MIL.

Executive Summary

Cygnus. Therapeutic Systems' revenues from the Nicotrol nicotine transdermal patch were $11 mil. during the third quarter, Cygnus reported Oct. 28. Nicotrol, Cygnus' first product, was launched in mid-August by the transdermal drug delivery firm's marketing partner Warner- Lambert. Year-to-date product sales revenues for Cygnus are $11.4 mil. IMS America reports indicate that Nicotrol held a 3.8% market share of new prescriptions written for smoking cessation products in the U.S. in September, Cygnus said. The Cygnus/Warner-Lambert patch is competing with Ciba-Geigy's Habitrol, Marion Merrell Dow's Nicoderm and Lederle's ProStep. While Cygnus' total revenues increased by more than 10-fold from the year-earlier quarter to $11.9 mil., the transdermal firm also reported a significantly higher loss for the three month period -- $4.5 mil. compared to $2 mil. in the 1991 quarter. For the first nine months, revenues grew four-fold to $15.3 mil. with a net loss of $15.8 mil. compared to a loss of $4.2 mil. in 1991. Cygnus' general and administrative expenses increased by $2.6 mil. from the second to third quarter, the company said, "because of expanded activities to support business development, the establishment of a reserve for potential legal expenses associated with patent litigation and other contractual matters, and a one- time non-cash compensation charge." The company noted that as of Sept. 30 it had $31.8 mil. in cash. Genzyme product sales doubled to $44.5 mil. from $22.8 mil. in the third quarter. Ceredase, Genzyme's treatment for Type I Gaucher's disease, has been contributing slightly more than half of the firm's product sales, suggesting third quarter sales in the $24 mil. range. For the nine months, product sales are $117.9 mil. With the addition of R&D revenues, Genzyme sales totaled $53.4 mil. for the three months, representing an increase of 79.8%. Net income kept pace at $9.5 mil., or 84.8% above year-earlier levels. For the nine months, total revenues were $148.1 mil., up 82.5%, with a net loss of $39.2 mil. including $68 mil. in nonrecurring charges. Bindley Western sales jumped 24.3% to $731.4 mil. in the third quarter. Earnings were up 18.5% to $3.3 mil. For the nine months, sales for the pharamaceutical wholesaler were up 23% to $2.1 bil. and earnings climbed 20.7% to $10.2 mil. "Management was satisfied with the gain in sales and earnings but concerned about the softness in certain operating areas," Bindley Western said. The company attributed the "softness to a decline in forward purchasing opportunities, start-up costs for new divisions and an overall competitive pricing environment." The wholesaler added that management remains "hopeful that the 1992 plan would be met." MedImmune announced Oct. 29 that it has signed a letter of intent to reacquire distribution rights to its first product, the cytomegalovirus treatment CytoGam. The firm will pay its partner, Connaught, $4.5 mil. up front and future royalties in exchange for the rights. "MedImmune will begin selling CytoGam through its own sales force upon execution of a definitive agreement anticipated later this year," the firm said. MedImmune expects to take a one-time charge of $6.2 mil. associated with the agreement in the fourth quarter. On top of a $900,000 loss in the quarter, the charge will assure that the firm is not profitable for the year. MedImmune's third quarter revenues of $2.7 mil. were all accounted for as research revenues. The firm noted that it will "begin to record product sales following completion of a definitive agreement with CytoGam's distributor."

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