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MARION MERRELL DOW EXPECTS SUBSTANTIAL DECLINE IN FIRST-QUARTER SALES, EARNINGS

 KANSAS CITY, Mo., March 16 /PRNewswire/ -- Marion Merrell Dow Inc. (NYSE: MKC) today announced that sales and earnings for the first quarter of 1993 are expected to be down substantially from the first quarter of 1992. Management said first-quarter 1993 earnings per share could fall below average analysts' expectations of 62 cents by as much as 60 to 70 percent.
 The company said the expected first-quarter decline is due primarily to sharply lower U.S. sales of its major prescription products compared with a strong year-earlier period. Other factors include the fact that sales of U.S. over-the-counter products (included in year-earlier sales) are now recorded through the company's consumer products partnership, the impact of currency fluctuations on the company's international business, and the growth in negotiated and government-mandated price discounts and rebates.
 "Our long-standing policy has been not to issue sales or earnings projections," said Fred W. Lyons, Jr., president and chief executive officer. "But in this case, we want to clarify for our shareholders and the investment community what our preliminary results are telling us.
 "We have recognized in our long-range planning that the 1993 to 1995 period will be a challenging time for Marion Merrell Dow, because of the changing nature of the pharmaceutical business as well as the competitive climate for some of our major products," Lyons said. "Our focus is on building long-term value amid these near-term challenges, and some of the actions we are taking to position our business may not be reflected in near-term results. For example, we are making substantial investments in Research and Development to discover and bring to patients important new medications."
 The company's expected first-quarter decline is due to several factors:
 -- The Seldane(R) family of antiallergy medications, which grew
 29 percent in the first quarter of 1992, is currently selling at
 sharply lower levels in the United States, reflecting adverse
 publicity concerning the July 1992 relabeling of the product,
 restrictions on promotion and a decline in the antihistamine
 market. The company plans expanded promotion for the spring
 allergy season, including resumption of direct-to-consumer print
 advertising.
 -- Although the Nicoderm(R) patch is the market leader in the
 U.S. smoking cessation market, and Nicoderm and Nicorette(R)
 account for about 55 percent of total prescriptions in that
 market, the U.S. market has declined markedly when compared with
 early 1992. The constriction of the overall market will make
 for an unfavorable comparison with the launch period of early
 1992.
 -- The company's strategy of switching patients from Cardizem(R)
 tablets and Cardizem(R) SR to the more convenient, less
 expensive Cardizem(R) CD has shown good progress to date.
 However, the sales impact of transferring patients to the lower-
 cost Cardizem CD and the erosion of Cardizem tablet sales due to
 the generic competition which began in November 1992 also are
 evident in early 1993 data.
 -- Sales comparisons also are affected because U.S.
 over-the-counter products, which accounted for $26 million in
 sales in the first quarter of 1992, are now recorded through the
 company's partnership with SmithKline Beecham.
 -- International sales, while healthy in local currencies within
 most key countries, are being adversely affected by currency
 exchange rates so far in 1993. The U.S. dollar value of
 international sales is generally reduced when the dollar is
 strong compared with European currencies.
 -- Results also are being affected by growing discounts and
 rebates offered through government-mandate programs to publicly
 funded customers and through negotiations with high-volume
 customers in the private sector. As previously announced,
 Marion Merrell Dow is voluntarily holding overall prescription
 product prices in line with inflationary expectations.
 "The first quarter will be disappointing, but it will not cause us to lose sight of our long-term vision. We are fully cognizant of the changing health care scene, changing market conditions and the challenges that our company faces," Lyons said. "In the near term, we are working very hard to overcome these challenges. We have sound strategies in place to build a foundation for the exciting opportunities that we believe our Research and Development efforts will produce in the second half of this decade."
 -0- 3/16/93
 /CONTACT: David M. Thompson or Richard M. Johnson of Marion Merrell Dow, 816-966-4000/
 (MKC)


CO: Marion Merrell Dow Inc. ST: Missouri IN: MTC SU: ERP

MC -- DV004 -- 6389 03/16/93 08:32 EST
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Publication:PR Newswire
Date:Mar 16, 1993
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