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ALLERGAN ULTRACARE DISINFECTANT KEYS TURNAROUND OF CONTACT LENS CARE UNIT

This article was originally published in The Tan Sheet

Executive Summary

ALLERGAN ULTRACARE DISINFECTANT KEYS TURNAROUND OF CONTACT LENS CARE UNIT, which reported a 4.1% worldwide sales gain in the first quarter of 1993 to $ 78.3 mil. The sales increase at Allergan Optical's contact lens care business represents the impact of the continued international roll-out of the hydrogen peroxide disinfectant/neutralizer and the U.S. launch of the product last spring, Allergan said. U.S. sales of the company's contact lens care products had declined in each of the last two years. Total Allergan sales for the three-month period ended March 31 grew 1.4% to $ 213 mil. while net earnings increased 34% to $ 23.7 mil. Minus the effect of unfavorable currency translations and the sale of Allergan's contact lens business in the Americas last year, sales grew 9.8%. The company's largest business segment, specialty pharmaceuticals, grew 8.7% in the first quarter to $ 99.9 mil. Ophthalmic drug sales, which include several ethical over-the- counter artificial tear brands such as Lacri-Lube and Tears Plus, increased 8.4% to $ 93.2 mil. Herbert Labs skin care sales, which include Photoplex sunscreen, rose 13.6% to $ 6.7 mil. Allergan commented that "SG&A expenses were flat [compared] to last year, part of our continuing cost containment effort which allowed us to increase R&D spending by 13% while increasing our operating income by 16%." Bausch & Lomb reported that revenues from its personal health sector, which includes contact lens care products, rose 14% and worldwide oral care sector revenues, which includes initial shipments of Clear Choice non-alcoholic mouthwash, increased 16% in the first quarter. Despite a slowdown in Bausch & Lomb's European contact lens business, sales in the company's healthcare segment increased 7% to $ 248 mil. in the first quarter. Overall, the company reported a 10% sales gain to $ 407.6 mil. with net earnings of $ 32.9 mil., up 15%, for the first quarter. SmithKline Beecham consumer brands posted a 10% sales increase (measured in pounds sterling) to (BRITISH POUND) 355 in the first quarter, or approximately $ 529 mil.; trading profits were flat, the company reported. However, first quarter comparisons were affected by the sale of two businesses last year. When the contribution of those businesses is factored out, "overall consumer brands sales were down 1% and profits down 14% [to (BRITISH POUND) 37 mil., or $ 55 mil.] in the first quarter of 1993," SmithKline Beecham explained. Major brands, with the exception of the Oxy line, continue to perform well, SmithKline reported. Tums sales grew 17% and Contac sales rose 13% in the first quarter while Oxy sales slipped 3%, the company said. Overall, North American consumer brand sales were up 11% in the quarter, "representing the initial contribution from our partnership with Marion Merrell Dow," the company explained. Worldwide oral care sales rose 15%, the company added. Overall SmithKline Beecham sales rose 26.3% to (BRITISH POUND) 1.52 bil. ($ 2.27 bil.) while profit attributable to shareholders increased 13% to (BRITISH POUND) 200 mil. ($ 298 mil.). The company noted that sales and, to a lesser extent, profits were inflated by the weakness of sterling against other world currencies. Schering-Plough HealthCare Products showed a 4% decline in sales during the first quarter due to market share battles with other Rx-to-OTC switch products. The company attributed the decline to "increasingly competitive markets for vaginal antifungal and cold/allergy products." Schering's Gyne-Lotrimin is battling J&J's Monistat 7 and Miles' Mycelex-7 in the vaginal antifungal market, and the company's Chlor-Trimeton is fighting for market share against Sandoz' anti-allergy switch product Tavist. However, Schering reported higher sales of foot care products "helped by strong trade purchases of the upgraded and repackaged Dr. Scholl's insole line" ("The Tan Sheet" March 8, p. 10). Suncare product sales were flat, the company added. Schering-Plough corporate sales increased 6.6% to $ 1.09 bil. in the first quarter. Net income was reported at $ 129.3 mil. after an accounting charge (FASB 106 for taking into account postretirement benefits). However, not including the charge, net earnings rose 15.9% in the first quarter to $ 223.5 mil. Chart omitted.
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