Drug sales lift SKB profits

THE PRICE of drugs produced by SmithKline Beecham fell in Europe and America last year, largely as a result of government pressures. But rises elsewhere meant prices were unchanged overall at the group's pharmaceutical division.

Jan Leschley, who takes over from Bob Bauman as chief executive of the Anglo-American drugs and healthcare group at the end of April, said volume growth alone explained the success of the drugs division in lifting worldwide sales by 9 per cent, in real terms, to just over pounds 3.4bn last year.

In the US volume growth had been 11 per cent but prices had fallen by up to 4 per cent, while in Europe volume growth of around 7 per cent had been accompanied by a 1 to 2 per cent fall in prices, he added.

Drug prices did rise by around 4.5 per cent in the rest of the world, but the rise was 'certainly not by more than inflation in these markets.'

Of SKB's existing drugs Augmentin did particularly well, with sales rising 17 per cent to pounds 760m. Sales of Tagamet, the ulcer drug facing generic competition in the US from May, had fallen by 6 per cent to pounds 673m.

Mr Leschley said the company expected at least 10 cheap generic versions of Tagamet to be on sale on the day after the patent expired.

Full-year group figures to the end of December showed that pre-tax profit rose 12 per cent to pounds 1.2bn in 1993 as total sales increased by 18 per cent to just over pounds 6bn.

The figures were flattered by exchange rate fluctuations, however. At comparable exchange rates, sales and trading profits from continuing operations both increased by 10 per cent.

Earnings per share, excluding exceptional items, climbed 15 per cent to 29.1p. Given that performance, SKB said it would increase its full-year dividend by 24 per cent to 10.9p.

The figures were in line with expectations and the shares were unchanged at 406p.

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