business
.-:.
: H ;
•.•;••
Likewise, Eli Lilly's financial performance for most of the year bore the brunt of a $2.44 billion write-down of its 1994 acquisition of PCS Health Systems. The charge was partially offset by the proceeds from Dow Chemical buying out Lilly's 40% interest in DowElanco. Taking into account the special charge and gain, the Indianapolis-based firm still had a $385 million loss for the year. Special charges for its major business Ann M. Thayer ings results, combined sales for 15 firms restructuring negatively affected Pharmarose 10% to $46.3 billion. Earnings for the cia & Upjohn's already lackluster earnC&EN Houston same group grew 14% to $6.76 billion. Re- ings for the quarter and year. t comes as no surprise that after sever- cently introduced products contributed Joining the list of pharmaceutical proal quarters of double-digit sales and most to sales growth in 1997, whereas the ducers reported by C&EN are several comearnings growth, the pharmaceutical strong dollar and currency exchange rates panies making the transition from diversiindustry ended 1997 on top. Newer prod- had a negative effect on earnings. fied chemical producers to life sciences ucts, including several with sales of $1 bilThese earnings results are from con- companies that, by definition, combine lion or more, spurred drug producers to tinuing operations, excluding special or businesses in pharmaceutical, agricultural record sales and earnings levels, while one-time items. In fact, earnings at about chemicals and products, and food and nusmaller drug discovery and biopharmaceu- one-third of the companies did have such trition. These include Monsanto, with ticalfirmslaunched their first products. charges or gains to report. For example, about 32% of its annual salesfrompharmaIn the pharmaceutical sector, 17 ma- Baxter International, Deerfield, 111., has ceuticals; Novartis, with about 75%; and jor drug producers had reported annual been carrying a $350 million pretax Rhône-Poulenc, with about 37%. sales by press time, with all but the two charge related to the acquisition of two St. Louis-based Monsanto and RhôneSwiss companies Novartis and Roche re- medical businesses throughout 1997. Poulenc, Paris, had special charges in porting earnings. Overall sales for the American Home Products acquired 1997 stemming from their transitions·. Ingroup grew to $210 billion in 1997, up Solvay's animal health business in Febru- cluding $455 million in after-tax costs and 11% over the previous year. For the 15 ary 1997 and sold its foods business at acquired R&D, Monsanto's year-end earncompanies reporting, earnings increased the end of 1996, with little net effect. ings from continuing operations were 13% to $26.3 billion. The Madison, N.J.-based company also $294 million. Similarly, Rhône-Poulenc, For the fourth quarter, excluding No- had costs associated with the withdrawal which spun off its chemicals operations as vartis and Roche in both sales and earn- of two antiobesity drugs. Rhodia and acquired 100% ownership of
Double-Digit Growth For Drug Producers
Major pharmaceutical producers had strong sales, earnings in 1997
I
Drug firm earnings increased 14% in fourth-quarter, 13% for full-year 1997 FULL-YEAR 1997
FOURTH-QUARTER 1997 Sales
Earnings8
Change from 1996 Sales
($ millions)
Earnings
Profit margin"
Sales
Earnings8
1997
1996
18.2% 15.8 11.2 18.1
17.0% $ 11,883.5 $ 2,094.5 2,160.1 14,196.0 14.5 6,138.0 10.6 653.0 16,701.0 3,205.0 18.1
($ millions)
Profit marginb 1997
1996
17.6% 15.2 10.6 19.2
17.1% 13.3 10.6 18.9
1,772.8 3,303.0 167.0 4,614.1
16 5 14 19
16 14 -3 19
20.8 14.6 7.5 19.5
20.7 13.4 8.8 19.6
7,514.0 21,376.7 12,504.0 6,710.0
749.0 na 2,213.0 739.0
18 19 11 -8
12 nm 15 -26
10.0 nm 17.7 11.0
10.6 nm 17.1 13.7
14,993.0 12,865.1 6,778.0 12,784.0 8,179.8
570.0 na 1,444.0 1,770.0 869.5
11 18 20 3 13
25 nm 19 10 11
3.8 nm 21.3 13.8 10.6
3.4 nm 21.4 13.1 10.9
11%
13%d 15.0% d14.6%d
Eli Lilly Johnson & Johnson Mallinckrodtc Merck
2,415.8 5,630.0 656.2 6,232.0
457.5 630.0 24.4 1,242.3
17 2 45 15
23 13 -38 19
18.9 11.2 3.7 19.9
18.1 10.1 8.6 19.3
8,517.6 22,629.0 2,228.8 23,636.9
Monsanto Novartis Pfizer Pharmacia & Upjohn
1,820.0 na 3,496.0 1,723.0
55.0 na 558.0 183.0
26 nm 11 -13
120 nm 11 -31
3.0 nm 16.0 10.6
1.7 nm 15.9 13.5
Rhône-Poulenc Roche Schering-Plough SmithKline Beecham Warner-Lambert
3,832.0 na 1,781.0 3,570.0 2,327.4
380.0 na 343.0 525.0 235.7
14 nm 26 3 26
29 nm 23 9 38
9.9 nm 19.3 14.7 10.1
8.8 nm 19.7 13.9 9.3
10%d
14%d 14.6% d 14.1% d $209,635.4 $26,324.0
$46,285.9 $6,756.4
Earnings
11% 15 14 12
4% 8 9 12
TOTAL
Sales
8% 1 13 11
$ 3,118.1 $ 566.7 Abbott Laboratories 3,611.4 571.8 American Home Products 1,632.0 Baxter International 182.0 4,441.0 802.0 Bristol-Myers Squibb
11% 14 15 12
Change from 1996
a After-tax earnings from continuing operations, excluding significant extraordinary anci nonrecurring items. b After-tax earnings as a percentage of sales, c Fiscal year ends June 30. d For companies reporting, na = not available. im = not mean ingful.
38 FEBRUARY 23, 1998 C&EN
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