BERGEN BRUNSWIG SALES ARE $5.07 BIL. THROUGH NINE MONTHS, UP 37%; BIOCRAFT REVENUES UP 84% TO $40.5 MIL. IN FOURTH QUARTER; ALZA PREDICTS LOWER ROYALTIES
Bergen Brunswig's sales through nine months of FY 1993 (ended May 31) totaled $5.07 bil., an increase of 36.7% year-to-date. Sales during the third quarter were $1.76 bil., 31.9% higher than in the year-earlier period, the wholesaler reported June 16. Bergen attributed much of the increase to the contribution from Durr-Fillauer, which it acquired in September 1992. Commenting on the sales performance, Chairman and CEO Robert Martini noted that while the sales increase for the third quarter was approximately 32%, "that rate of increase was less than the 39%" in the year-earlier quarter. A "key factor in the slowdown," Martini said, "is a decrease in the internal growth rate from 10% to 5%, which mirrors a trend that has been impacting the industry recently." Earnings from continuing operations in the third quarter declined 16.2% to $14.5 mil. and are 9.2% lower through nine months at $39.2 mil. The earnings results are reduced by $2.6 mil. due to an extraordinary loss from an early extinguishment of debt. By comparison, the earnings for the same period last year included $5 mil. in after-tax earnings from discontinued operations. Along with lower earnings, Bergen is also feeling continuing pressure on its margins; the wholesaler, however, increased its operating earnings for both the quarter and the nine months. Operating earnings rose 10.5% to $30.4 mil. in the three-month period and 34.2% to $88.2 mil. year-to-date. "We were able to achieve this increase," Martini explained, "by increasing our revenues through internal growth and acquisitions and by continuing to reduce our operating expenses. We have done that, in part," he continued, "by investing in more efficient distribution facilities" Biocraft revenues skyrocketed 83.9% to $40.5 mil. in the fourth quarter ended March 31, the company reported June 17. Fiscal 1993 revenues topped the $100 mil. mark, jumping 36.5% to $126.6 mil. compared to $92.8 mil. in the year before. Biocraft sales of ketoprofen capsules and amoxicillin chewable tablets, introduced in December 1992, were "largely" responsible for the sharp rise in revenues, the company said. FY 1993 sales also were "buoyed" by cinoxacin, baclofen, minocycline and metaproterenol syrup, all of which were introduced during calendar 1992, Biocraft noted. Earnings totaled $2.1 mil. in the quarter compared to a loss of $3.7 mil. in the year-earlier period. Full fiscal year earnings were $5.9 mil. compared to a loss of $6.7 mil. for FY 1992. For the year, R&D expenses were $8.7 mil. compared to $8.8 mil. in the previous 12-month period. Selling, general and administrative expenses were $14.7 mil., approximately $2 mil. lower than in FY 1992. Alza, announcing preliminary results for the second quarter on June 16, reported that royalties and fees could be "approximately $5 mil. to $8 mil. lower than the $32.6 mil. reported for the first quarter of 1993." As a result of the lower numbers, Alza expects earnings for the second quarter also will be lower, the company said. Procardia XL wholesaler inventory levels are the "primary reason" for the expected lower royalties, Alza said. "Heavy" forward buying by wholesalers of the Pfizer/Alza extended-release nifedipine in anticipation of a February Pfizer price increase occurred during the first quarter, Alza explained. And, "although according to the most recently available data, the level of prescriptions for Procardia XL has continued to increase, the normalization of inventories by wholesalers is expected to result in lower second quarter sales." Alza's short-term results also continue to be affected by investments in expanding manufacturing and R&D facilities, the company noted. Ares-Serono Group first quarter pharmaceutical sales worldwide were $157.7 mil., 8.5% lower than in the comparable period of 1992. Adjusting for currency changes, actual pharmaceutical sales increased 3.7%. Corporate sales worldwide were $180.6 mil., down 8.8%. Excluding currency fluctuations, the Swiss company said actual sales for the three-month period January through March rose 3%. Earnings of $16.9 mil. were ahead 1.9% compared to the year- earlier quarter. Operating income was $35.4 mil., down 7.1%. Ares- Serono said the operating income results reflect an "improvement of the operating margin despite a decrease in sales." Discussing the financial results, Ares-Serono Group CEO Fabio Bertarelli commented on the increasing pressures on the worldwide pharmaceutical industry. "By reacting quickly and implementing an aggressive, global cost- containment program," Bertarelli noted, Ares-Serono has "succeeded in improving our operating margins from 19.2% of sales in 1992 to 19.6% for the first quarter of 1993."
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