NOVO NORDISK DIABETES CARE PRODUCT SALES INCREASE 9% TO $1.07 BIL.: COMPANY SEES 10% REVENUE GROWTH FOR 1995; CHIRON BETASERON SALES TO BERLEX TOP $100 MIL.

Novo Nordisk diabetes care sales increased 9% in 1994 to $1.07 bil. (6.5 bil. Danish kroner) despite supply problems in the U.S., the company reported.

The 9% growth in diabetes sales "is mainly attributable to a better product mix and increasing market shares in several markets, notably Japan and Germany," Novo said. "In contrast, market shares declined in the U.S., due primarily to a difficult supply situation in 1994," the firm continued. Diabetes care sales now contribute 70% of Novo's health care sales, down from 72% in 1993.

Novo Nordisk shut down its Danish insulin plant supplying the U.S. market between August and October after an FDA inspection ("The Pink Sheet" Oct. 31, 1994, T&G-9). The company reported a special charge of $22 mil. which included "substantial one-time costs incurred in connection with certain legal matters in the U.S. and increasingly stringent quality assurance and documentation requirements of" FDA. Novo's supply problems apparently benefited Lilly. The company reported that its Humulin line contributed to its 1994 sales growth ("The Pink Sheet" Feb. 20, p. 14).

The strong increase in SmithKline Beecham's Paxil sales helped Novo Nordisk's bottom line. The Danish company recorded approximately $30 mil. in royalties on paroxetine.

Total licensing fees more than doubled during the year to $45.5 mil., Novo reported. Novo's own sales of paroxetine under the name Seroxat in the Nordic countries more than doubled during the year, the company added. That growth helped Novo's "other product" sales line increase by 30% to $119.8 mil.

Novo forecast "a sales increase of up to 10%" for 1995, assuming "that exchange rates of Novo Nordisk's invoicing currencies stabilize at the average level of the initial months of the year, and that no significant new governmental measures to reduce the price of pharmaceutical products are introduced." The company believes that income before taxes will increase at approximately the level of sales.

Royalties on Novo's recombinant insulin sales helped increase Chiron's "other revenues" line by 22% to $28.1 mil. Also contributing to the royalty line were "initial sales fee income received from Ciba for sales by Chiron Therapeutics of Aredia" and royalties from Daiichi in Japan on a hepatitis C virus test.

Chiron's sales of Betaseron to marketing partner Berlex totaled $100.1 mil. during the first full year of marketing of the multiple sclerosis product. Fourth quarter sales to Berlex were $38.7 mil., more than triple the 1993 fourth quarter.

Annual revenues for Chiron were $454 mil., up 43%, the company reported, with net income of $18.4 mil. For the fourth quarter, Chiron posted a loss of $4.2 mil. on sales of $134.3 mil.

The fourth quarter loss includes several non-recurring expenses, including $2.1 mil. in professional fees associated with Ciba's buy-in to Chiron and $11.6 mil. in write-offs associated with Chiron's investments in Cephalon and Viagene. Chiron has ongoing R&D collaborations with both firms. The writedown of equity reflects an early benefit to Chiron of the Ciba agreement, finalized Jan. 4. With the security of Ciba's 49% stake behind it, Chiron can afford to clear its books of the equity investments -- and allow the possibility of a payoff if the stock of either company recovers.

Ivax sales increased by 6.6% to $1.13 bil. in 1994, the company reported. "Norton Healthcare and McGaw turned in strong performances," the company remarked.

"In spite of the effects of price competition in the U.S. generic business, we were able to build a strong foundation for future growth" with the acquisition of Zenith Labs. Merger expenses are a recurring item on the Ivax profit/loss statement. In 1994, merger-related expenses totaled $13 mil., compared to $9.2 mil in 1993.

Ivax is initiating Phase III studies of Cervene (nalmefene) for treatment of ischemic stroke, the company reported. The company said that it is "particularly encouraged by the results of our Phase II study" of the compound.

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