Amersham is bubbling again: The Investment Column

Amersham International, the radioactive chemicals to pharmaceuticals group, seems to have recovered some of its poise since disappointing the market with flat interim results a year ago. Yesterday's 43 per cent rise in interim profits to September of pounds 28.4m beat expectations and a half- way dividend hoisted 22 per cent to 6p reflected the group's bubbling optimism about the rest of this year and next.

The figures received a one-off boost from the steady build up in the period of Amersham's stake in Nihon Medi-Physics, a Japanese radio-pharmaceutical joint venture with Sumitomo Chemical, which chipped in pounds 4.3m in the half year.

But things are going right for Amersham on several fronts. The pounds 106m cost of the NMP holding now looks cheap. Last year's profits growth of over 20 per cent is impressive enough, but the combination of a ready- to-use version of Amersham's Myoview heart imaging product from January with NMP's marketing muscle opens up a Japanese market expected soon to be worth pounds 40m.

Meanwhile, the recent introduction of Myoview to the US launches it on to the largest market in the world, valued at around pounds 75m and growing at 15 per cent a year. Myoview, which saw first half sales soar 126 per cent, is set to emerge as Amersham's lead product.

But there was also good news for Ceretec, Amersham's more elderly brain imaging agent, which reversed a three-year decline induced by the launch of Du Pont's rival Neurolite. Overall, the sturdy performance of Amersham's branded products helped lift margins in the healthcare division from 8.9 to 12.2 per cent. It brings them much closer to the long-term target of matching the 20 per cent or more notched up by the core life science side.

That will be boosted by the end of the research and development expenditure pause at the big drugs groups, which now account for more than half the division's sales. Longer-term, yesterday's three-way licensing deal between Amersham, Perkin Elmer of the US and Roche will cement the British group's already strong position in advanced genetics.

Raised full-year profit forecasts of pounds 67m would put the shares on a forward p/e of 16, after a 22.5p rise to pounds 10.25 yesterday. Now only back where they were at the start of 1994, they should have further to go.

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