Printer Friendly


 COLLEGEVILLE, Pa., and PARIS, Oct. 21 /PRNewswire/ -- Rhone-Poulenc Rorer (NYSE: RPR) today announced third quarter 1993 earnings per share of $.51 including an expected pretax charge of $27 million ($.13 per share) for acquired research and development costs stemming from the previously announced transaction with Applied Immune Sciences, Inc., which closed this quarter.
 Results in the quarter also included gains from the sale of certain product rights of $.02 per share ($.04 per share in 1992). Earnings per share in the third quarter 1992 was $.66. Excluding the above transactions, earnings per share for both periods would have been $.62 as expected.
 The stronger U.S. dollar (e.g. 17 percent stronger vs. the French franc than in the third quarter 1992) resulted in third quarter reported sales that were 8 percent below prior year at $960 million. Sales grew by 3 percent excluding currency and divested products. Despite the reported sales decline, earnings were level with prior year due to gross margin improvement of close to 1 percent, lower operating expenses and continued reduction of interest expense. At the same time, our investment in R&D expenditures grew at a double digit rate before currency effects.
 On a local currency basis, higher sales in France and Armour were offset by a continuation of lower sales levels seen throughout the year in Italy and Germany, due to legislative actions to restrict government health costs. Cardiovascular products (Lovenox, Selectol) and anti- infective products (Rovamycine, Peflacine, Oroken) performed well in France as did plasma products (Monoclate P) in Europe. On a year-to- date basis, demand and factory sales growth in the U.S. prescription business remains strong, led by Azmacort, Dilacor XR, Nasacort, DDAVP Nasal Spray and Lovenox. Compared to a strong third quarter 1992, third quarter factory sales for the U.S. prescription business were essentially flat as the wholesale and retail trade continues their efforts to reduce inventory.
 For the nine months ended September 1993 net income as reported increased 9 percent to $285 million and earnings per share grew at a similar rate to $2.06. After excluding certain nonrecurring items, as footnoted on the attached statement of income, earnings per share would have increased 15 percent over the prior year. Reported sales for the year-to-date 1993 are $2,884 million representing an increase of approximately 6 percent excluding the effects of currency fluctuations and divestitures.
 Commenting on these results Michel de Rosen, newly appointed president and chief operating officer, said: "As a result of previously implemented legislative measures, sales in Germany and Italy continue to be depressed and are not yet showing anticipated signs of improvement. In addition, other countries such as the U.K., Spain, France and the United States recently have announced new initiatives or proposals to curtail overall healthcare costs. These difficult and uncertain market conditions dictate that we undertake further streamlining of our operations. Presently, we are in the process of evaluating the extent of the actions needed to make our operations more cost-efficient and to ensure profit growth while continuing to increase our investment in innovative R&D programs."
 New product launches and registrations are proceeding as planned. Granocyte, for chemotherapy induced neutropenia, was launched in Sweden and Denmark and to date has been approved for marketing in seven other European countries including France. A registration dossier for the quinolone antibiotic Zagam was subhas signed a licensing agreement to further extend its rights to market this product in an additional 70 countries in South America, the Middle East and southeast Asia. The company's partner, Dainippon, recently launched the product in Japan where initial reception by the medical community has been good. Ikorel, a potassium channel opener, is now registered in nine European countries including France. Additionally, Oruvail Gel has been launched as an OTC product in the United Kingdom as have three new formulations of Maalox in the United States.
 Commenting on year-end trade incentives, Robert E. Cawthorn, chairman and chief executive officer said, "Traditionally, many pharmaceutical companies including RPR have offered to wholesale and retail customers, particularly in the U.S., extended payment terms and the opportunity to buy ahead of year-end price increases. In view of the trade's inventory reduction efforts, smaller price increases and forthcoming healthcare reform, we have determined that these practices are no longer in shareholders' best interests. As a result, we have decided to eliminate these incentives except on those few products where it makes good business sense. It is hard to estimate how the trade will react to this, but it could have a one-time impact of 1 percent to 2 percent of full year 1993 annual sales."
 Rhone-Poulenc Rorer is a global pharmaceutical company dedicated to the discovery, development, marketing and manufacturing of human pharmaceuticals. The company reported sales of $4.1 billion and invested more than $500 million in research and development in 1992.
 Condensed Consolidated Statements Of Income
 (Unaudited - amounts in millions except per share data)
 Three Months Ended Nine Months Ended
 September 30, September 30,
 1993 1992 1993 1992
 NET SALES $ 960.1 $1,049.2 $2,884.5 $2,918.1
 Cost of products sold 322.6 360.6 957.8 1,004.5
 Selling, delivery and
 expenses 357.4 389.8 1,056.2 1,082.3
 Research and
 development expenses 138.6 140.5 407.8 383.6
 Restructuring and
 other charges(A) --- --- 77.2 ---
 Proceeds from litigation
 settlement(A) --- --- 105.0 ---
 OPERATING INCOME 141.5 158.3 490.5 447.7
 Interest expense-net 10.1 29.3 47.7 81.0
 Other (income)
 expense-net(B)(C) 28.7 (1.5) 25.2 4.7
 TAXES 102.7 130.5 417.6 362.0
 Provision for income
 taxes 27.7 37.7 124.6 108.2
 Net income before
 accounting change 75.0 92.8 293.0 253.8
 Cumulative effect of
 accounting change(D) --- --- --- 15.0
 Dividend on
 preferred stock (4.0) (2.2) (8.2) (7.8)
 COMMON SHAREHOLDERS 71.0 90.6 284.8 261.0
 Before accounting change $.51 $.66 $2.06 $1.78
 Cumulative effect of
 accounting change --- --- --- .11
 TOTAL .51 .66 2.06 1.89
 (A) Results for the nine months ended September 30, 1993 include a charge of $77.2 million for the cost of restructuring and manufacturing streamlining programs and increased provisions for certain litigation recorded in the second quarter. In addition, results for the nine months include $105.0 million proceeds from settlement of a patent lawsuit concerning Factor VIII:C.
 (B) Other (income) expense-net for the three and nine months ended September 30, 1993 includes a $27.0 million charge for the portion of the Applied Immune Sciences Inc. (AIS) purchase price representing acquired research and development expense.
 (C) Other (income) expense-net includes gains from the sale of certain product rights of $2.7 million ($.02 per share) and $15.4 million ($.08 per share) for the three and nine months ended September 30, 1993, respectively. A similar gain of $6.5 million ($.04 per share) was reported in the three and nine months ended September 30, 1992.
 (D) Results for the nine months ended September 30, 1992 include income of $15 million ($.11 per share) cumulative effect of adoption of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," effective January 1, 1992.
 -0- 10/21/93
 /CONTACT: Rhone-Poulenc Rorer media inquiries, 215-454-8035, or investor relations, 215-454-3851/

CO: Rhone-Poulenc Rorer ST: Pennsylvania IN: MTC SU: ERN

MP-LJ -- PH004 -- 5002 10/21/93 09:04 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 21, 1993

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters