Fortunes mixed in third quarter
The latest batch of third quarter results show that the pharmaceutical industry is experiencing mixed fortunes compared with the same time last year.
DSM, based in Heerlen in the Netherlands, showed an operating profit for the third quarter of 2002 of €104m (US$103m), up 8% from the third quarter of 2001, while net sales amounted to €1.4bn ($1.4bn), about the same as last year. Sales in the life science products sector decreased by 3% compared with 2001, mainly as a result of divestments and a lower exchange rate for the US dollar. However, the operating profit increased by 5%. DSM Pharmaceutical Products saw its operating profit improve compared with the third quarter of 2001, mainly as a result of higher sales and lower fixed costs at DSM in the US. DSM Anti-Infectives posted higher profits due to slightly higher volumes and margins.
GlaxoSmithKline's pharmaceutical sales increased 6% to $6.5bn (€6.6bn), with US sales growth up 9% to $3.5bn (€3.5bn), representing 54% of the business. The underlying growth rate for the US business is broadly consistent with reported sales growth, although some products were affected by wholesaler stocking patterns. European sales were up 2% to $1.7bn (€1.7bn), reflecting declines in some older products, as well as significant government reforms in Italy. International markets grew 6% to $1.3bn (€1.3bn), with strong performances in Canada and the Middle East/Africa, partially offset by continuing weakness in Mexico.
Merck's pharmaceutical third-quarter sales fell 13% to €779m ($773m) and the operating result dropped 74% to €61m ($60.5m). Again, a strong contribution from generics could not compensate for the minimal sales of Glucophage products to Merck's US licensee, Bristol-Myers Squibb. Sales of ethicals fell 24% to €418m ($415m) for the third quarter. while generics sales rose 8.9% to €288m ($286m).
PhotoCure, based in Oslo, Norway, announced third quarter operating revenues of NOK7.7m (€1.05m), total operating expenses of NOK25.5m (€3.48m) and a net loss of NOK17.2m (€2.43m) for the three months ended 30 September 2002.
The Siegfried Group, of Zofingen, realised a turnover of SFr299.8m (€204.5m) for the first nine months of 2002, increasing sales by 16.9% compared with the previous year. While the Siegfried division increased turnover by almost 20% to SFr272.3m (€185.7m), the Sidroga division saw turnover of SFr27.5m (€18.6m), a decline of 4.3%. Within Siegfried the strongest growth was in custom synthesis and generics.
Anglo-German drug discovery company Evotec OAI achieved a solid performance in the first nine months of 2002. Revenues increased by 20% to €47.5m ($48.2m) compared with €39.6m ($40.2m) in 2001. While growth was in line with expectations of 20-30% per year, Evotec said that the market environment had deteriorated in Q3, with certain customers delaying orders for reasons of cash conservation.