SMITHKLINE BEECHAM PAXIL FIRST HALF U.S. SALES ARE $158 MIL.; NEW PRODUCT SALES DRIVE STRONG DOMESTIC REVENUE GROWTH FOR J&J, PFIZER AND SCHERING-PLOUGH

SmithKline Beecham's $158 mil. in U.S. sales of the antidepressant Paxil helped boost the company's U.S. pharmaceutical sales 13% for the six-month period ended June 30.

The serotonin reuptake inhibitor was launched in March of last year at a discount to the two preceding drugs in its class, Lilly's Prozac and Pfizer's Zoloft. U.S. sales of Paxil for the quarter ended June 30 were $69 mil., a 272% increase from the second quarter of 1993. International sales of paroxetine were $108 mil. (up 167%) for the second quarter and $224 mil. (up 171%) for the first half. SmithKline's U.S. pharmaceutical sales for the half were $1.37 bil.

SmithKline Beecham's NSAID Relafen posted U.S. sales of $81 mil. for the second quarter and $155 mil. for the half, increases of 53% and 14%, respectively. Relafen was launched in March 1992. SmithKline partially attributed sales gains of the anti- inflammatory to a direct-to-consumer print ad campaign launched in March. The ads encourage arthritis patients to ask their doctors about Relafen and feature a toll-free number for patients to request information on the drug. Global nabumetone sales were $90 mil. for the quarter and $170 mil. for the half, increases of 52% and 16%, respectively.

Market penetration of SB's antiemetic Kytril, launched in the U.S. in March, appears to be proceeding at a measured pace. While the company reported U.S. Kytril sales of $18 mil. for the half, only $3 mil. of those sales occurred in the second quarter. SmithKline stated that Kytril is on 50% of "key hospital formulates" in the U.S. and the company recently released a head- to-head study showing one dose of Kytril 10 mcg/kg to be as effective as three doses of Glaxo's Zofran .15 mg/kg. Global sales of Kytril were up 31% in the quarter to $36 mil. and up 68% to $80 mil. in the half.

Sales by Diversified Pharmaceutical Services, the pharmaceutical benefit management company SB acquired for $2.3 bil. in May, were $22.5 mil. Global SmithKline Beecham sales were $2.37 bil. for the second quarter, up 8% and $4.57 bil. for the half, a 5% increase.

Combined growth of SB's newer pharmaceuticals of 81% in the quarter and 71% for the year to date helped the company blunt the initial effects of the expiration of the Tagamet patent in the U.S. in May.

"Although it is too soon to have a complete picture of the market, it appears that the decline in Tagamet sales is in line with other major products whose U.S. patents have recently expired," SB said. U.S. sales of cimetidine (including SmithKline's authorized generic version from Penn Labs) were down 9% for the quarter to $158 mil. Worldwide cimetidine sales fell 8% to $248 mil. Six-month Tagamet sales dipped 1% in the U.S. to $314 mil.

A beneficiary of the Tagamet patent expiration has been Mylan, which launched a generic version May 17. Mylan net income for the quarter jumped 68% to $27.1 mil. on sales that grew 46% to $85.1 mil. The generics firm hiked R&D spending by more than a third for the quarter, to $6.3 mil.

New product growth was the key to strong U.S. prescription drug sales gains by several companies in addition to SmithKline Beecham, including Johnson & Johnson, Pfizer and Schering-Plough.

Johnson & Johnson's U.S. pharmaceutical sales grew 26.4% in the second quarter, led by its two newest products: Risperdal and Propulsid. The company also highlighted Floxin, Procrit and Sporanox as contributors to the growth. Domestic drug sales were $541 mil. for J&J in the quarter. Net sales of all products were $3.92 bil. for the quarter, up 10.6%; net earnings were $559 mil., up 12.9%.

Pfizer reported 16% growth in U.S. pharmaceutical sales for the second quarter. Worldwide pharmaceutical sales were up 13%. The company chalked the success up to "rapid acceptance of our new products." Worldwide sales of Zoloft, Zithromax, Norvasc and Cardura, which together make up one third of the company's drug sales, saw an aggregate sales increase of 59%. Pfizer corporate sales for the quarter were $1.92 bil., a 10% increase. Net income grew 10% to $257.2 mil.

Schering-Plough said second-quarter U.S. sales of its non- sedating antihistamine Claritin "topped $100 mil. for the first time" since the drug was approved by FDA in April 1993. Claritin and other respiratory products helped Schering-Plough achieve "significantly higher" domestic pharmaceutical sales, the company said. Worldwide pharmaceutical sales rose 9% for the quarter. Second quarter corporate sales were $1.19 bil, a 6% increase. Net income for the quarter moved up 13% to $240.7 mil.

The domestic sales growth comes at a time of continuing limited pricing flexibility. The second quarter Producer Price Index from the Labor Department found a 2% increase in pharmaceutical prices at the manufacturer level, with an unadjusted 12-month inflation rate of 3%. In its quarterly earnings report, Bergen Brunswig noted that its business continued to be affected by "the absence of material drug price increases." Bergen cited its efforts to focus on "higher margin products such as medical supplies, generic pharmaceuticals and OTC and private label products" to compensate.

Genentech's cystic fibrosis treatment Pulmozyme posted sales of $18.7 mil. in the second quarter, the company reported. Pulmozyme was launched in January.

Genentech revenues jumped 15% to $194.9 mil. for the quarter while earnings more than tripled, from $10.4 mil to $33.4 mil. The company attributed the sales and earnings growth to increased sales of Activase (t-PA), up 32% to $73.5 mil.

Genentech growth hormone sales rose 11% to $59.5 mil., an increase the firm attributed to "the introduction of Nutropin in 1994 for the additional indication of growth failure due to chronic renal insufficiency and an increased number of patients diagnosed with growth hormone inadequacy." The company noted that "new competitors" to its growth hormone products "could enter the market any time upon receiving FDA approval" and that "Genentech has a strategy in place to protect its market but does anticipate some decrease in sales if competitors enter the market." Bio- Technology General, Novo-Nordisk, Serono and Kabi have applications for growth hormone products pending at the agency.

Amgen's two growth factor products continued to post sales gains. Neupogen sales rose 13% to $212 mil. for the quarter ending June 30, while Epogen sales were ahead 26% to $176.5 mil. Amgen's total sales for the quarter were $415 mil. (up 21%).

Burroughs Wellcome Zovirax sales grew 17% for the four-month period ended June 30 to reach $408 mil. and are ahead 15% for the 10-month period ended June 30. Wellcome is changing its fiscal year to finish Dec. 31. Sales of Retrovir declined 17% for the four-month period to $94 mil. Corporate Wellcome sales were up 13% for the four months, to $1.04 bil.

Wellcome reported that the January introduction of SmithKline Beecham's Famvir for shingles in the United Kingdom "helped expand the market" for herpes zoster treatments. Zovirax prescriptions for shingles are up 13% in the U.K. since the introduction of Famvir, Wellcome said. FDA approved Famvir for treatment of shingles June 29 ("The Pink Sheet" July 4, T&G-1).

Sales of Warner-Lambert's ACE inhibitor Accupril rode an expansion of U.S. labeling to include congestive heart failure to a 51% sales increase for the quarter, to $60 mil. Sales of Cognex and Neurontin also increased, but overall prescription pharmaceutical sales were down 9% in the U.S., primarily due to generic competition to Lopid. Worldwide W-L pharmaceutical sales for the quarter were $514 mil., down 3%. Corporate sales were $1.55 bil. for the quarter, an increase of 7%.