Business
Biotechnology revenues surged in second quarter The financial statements filed by biotechnology-based companies continue to look less and less like those of development-stage firms. True, the majority of companies are still reporting net losses or, at best, small profits. But undeniable signs of commercial status proliferate in the increasing share of total revenues made up of operating proceeds, especially those from product sales. These indications are more evidence that the many companies using new biotechnology in the fields of health care, agriculture, and chemicals—as well as those which supply them with laboratory reagents and devices—are rapidly growing up. A group of 15 companies representing a cross section of the biotechnology-based industry recorded a composite 92% increase in total revenues in the second quarter of 1984. At the same time, only six members of the group reported net income. But companies are plowing the bulk of their revenues back into research and development; at this point profit margins are more tokens of appeasement to institutional investors than actual measures of a company's health. What most biotechnology-based companies are aiming for now is
ImmunoChem Research recorded a 51% jump in revenues during the increasing the importance of sales second quarter, the result of increasdollars in the revenue mix—assum- ing sales for the company's veteriing they have some products on the nary antitumor agent. market in the first place. Genex, for Not all the best-known biotechinstance, which reported a 352% nology-based companies have nosecond-quarter jump in total rev- ticeable product sales, however. Bioenues—the largest in the 15-com- gen, for instance, managed healthy pany group—-points out that prod- 39% revenue growth without any uct sales accounted for 69% of all products. Of its total, 73% came from revenues during the first half of research and development contract 1984, compared with less than 1% fees, the remainder from interest in the same period in 1983. For income. Similarly, Amgen, with a Monoclonal Antibodies, whose to- 278% leap in second-quarter revtal revenues for the April-through- enues, made 47% of that on R&D June period rose 215%, product sales fees and 50% on interest, leaving also played the decisive role—rising just 3% for sales and royalty revto $715,160 from $81,877 in the same enues. period the year before. That was Genentech also derived most of thanks to the introduction of an ovu- its revenues from contract research. lation prediction kit in May and The company, which also had unthe fifth of a line of pregnancy test disclosed revenues on royalties from kits in June. Eli Lilly for the genetically engiOther firms also boosted their neered human insulin Genentech p r o d u c t sales. Centocor, w h i c h developed and from some product reported a 69% rise in revenues, also sales for clinical use, is still trying managed a $103,549 profit. "Profit- to gain clearance from the Food & ability increased as a result of ex- Drug Administration for its first mapanded product sales," comments jor product, human growth horcompany president Hubert J. P. mone. At one time, the company Schoemaker. Over the first half, Mo- had expected FDA approval before lecular Genetics, which last year be- the end of 1983. Now, nearly a year gan selling its first product, a later, a September meeting with monoclonal treatment for calf scours, FDA resulted in another request for had product sales of $827,428, or more data. 17% of total revenues. And Ribi David Webber, New York
Revenues increased 9 2 % in the second quarter SECOND-QUARTER 1984a Revenues6 Earnings* Change from 1983 Profit margin0 ($ Millions) Revenues Earnings 1984 1983 Advanced Genetic Sciences Amgen Applied Biosystems
$ 0.0
$-1.9
1.9 5.9
-2.1
278
def
def
def
1.1
125
220%
18.3%
12.8%
-92%
def
def
def
FIRST-HALF 1984b 0 c Profit margin Revenuest Earnings" Change from 1983 Revenues Earnings 1984 1983 ($ Millions) $0.1
$-3.5
-92%
na
na
na
10.9
2.0
def
def
def
na
na
na
354%
18.6%
10.2%
BioTechnica International
0.4
-1.1
119
def
def
def
0.8
-2.1
148 252
def
def
def
Biogen
7.8
-4.5
39
def
def
def
13.8
-8.2
43
def
def
def
1.9
1.9
4.1
0.1
93
24
3.1
*•?
3.8 1.7
def
0.1 0.3
81 57
def def
2.1 1.3
def
def
5.2 25.7
def
def
na
na
na
na
na
def na
-1.2
158
def
def
def
2.1 2.7
0.0
67
0.1
69
63 def
13.7
0.2
Collaborative Research
3.3
-0.8
77 234
def def
Damon Biotech
1.5
-0.6
162
def
def
def
2.9
California Biotechnology Centocor Cetus
17.3
0.6
57
88
3.6
3.0
32.6
1.0
57
80
3.1
2.7
Genex Molecular Genetics
8.3
-2.0
352
def
def
def
14.2
-3.6
318
def
def
2.2
0.0
19
def def
0.5
-0.2
def def def
def 4.3
215 51
-0.0 -1.6
def
-0.6 -0.1
4.8 1.8
60
1.0 0.2
0.9 def def
13.6
Monoclonal Antibodies Rlbi ImmunoChem
-92 def def
Genentech
225 52
def def
def def
and interest revenues. 4 Excludes a For three-month period ending clo sest to June 3(). b For six-nnonth periodending closest to June30. c inciuJes sales, contract research, royalty,,
12
October 1, 1984 C&EN
