Zeneca profits pass pounds 1bn mark

Zeneca, the UK's third-largest drugs group, yesterday revealed that profits broke through the pounds 1bn barrier for the first time last year and dismissed suggestions that its soaring share price had been puffed up by bid hopes. Unveiling record profits, turnover and exports, Sir David Barnes, chief executive, said he did not believe there was anything by way of speculation in the share price, which has tripled since the group was demerged from ICI in mid-1993, partly on hopes the company will be bid for by a big rival such as Roche of Switzerland.

The yardsticks by which analysts measured the group's performance were at the upper end of its sector but not above it, he said. "Most of the share price is justified on fundamentals and contains no bid speculation within it," he claimed.

Despite news of a 15 per cent rise in underlying profits before exceptionals to pounds 1.01bn for 1996, the shares fell from the all-time peak hit on Monday, dropping 42p to pounds 18.605. Dealers blamed profit-taking after their strong performance this year and worries that Zeneca had only one drug in its late-stage development pipeline.

But the group reiterated its aim of achieving average annual earnings growth of 15 per cent over the next five years by building a leading position in anti-cancer drugs and certain agrochemicals, while enhancing its position in other drug areas. Sir David attempted to calm fears about the group's Macclesfield plant, which manufactures Zoladex, the big-selling anti-cancer drug, where the US Food and Drug Administration has identified problems with the manufacturing process. Sir David said 20 inspections of the plant had been completed by a variety of regulators over the past 12 months. "We are confident the few remaining outstanding issues can be resolved with the FDA to their satisfaction and we hope these issues will be resolved by the end of the month," he said.

The group said it had 18 new products under development, excluding the Zomig anti-migraine treatment acquired from Glaxo last year, which has won UK approval, and the Seroquel schizophrenia treatment due for launch this year. Pharmaceuticals profits grew 10 per cent to pounds 757m, or 6 per cent excluding exchange movements, but Zeneca warned margins would continue to be constrained by the development and marketing costs of new products. The group plans to raise its US sales force from 1,200 to nearly 2,000 this year.

Zestril, the group's heart drug which goes off patent in 2001, grew sales 11 per cent to pounds 547m in 1996, while Zoladex was up 28 per cent at pounds 333m.

Operating losses in the seeds business, now part of a joint venture with a Dutch group, were cut from pounds 48m to pounds 3m. Meanwhile, restructuring of the speciality chemicals operations, shorn of the specialty inks and textile colours arms last year, pushed profits up a quarter to pounds 70m.

Investment column, page 20

Start your day with The Independent, sign up for daily news emails
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

SThree: Talent Acquisition Consultant

£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

Recruitment Genius: Experienced Financial Advisers and Paraplanners

Negotiable: Recruitment Genius: This extremely successful and well-established...

Guru Careers: FX Trader / Risk Manager

Competitive with monthly bonus: Guru Careers: We are seeking an experienced FX...

Day In a Page

Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
Ajmer: The ancient Indian metropolis chosen to be a 'smart city' where residents would just be happy to have power and running water

Residents just want water and power in a city chosen to be a ‘smart’ metropolis

The Indian Government has launched an ambitious plan to transform 100 of its crumbling cities
How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

How to stop an asteroid hitting Earth

Would people cooperate to face a global peril?
Just one day to find €1.6bn: Greece edges nearer euro exit

One day to find €1.6bn

Greece is edging inexorably towards an exit from the euro
New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

'Iron Man' augmented reality technology could become reality

Holographic projections would provide extra information on objects in a person's visual field in real time
Sugary drinks 'are killing 184,000 adults around the world every year'

Sugary drinks are killing 184,000 adults around the world every year

The drinks that should be eliminated from people's diets
Pride of Place: Historians map out untold LGBT histories of locations throughout UK

Historians map out untold LGBT histories

Public are being asked to help improve the map
Lionel, Patti, Burt and The Who rock Glasto

Lionel, Patti, Burt and The Who rock Glasto

This was the year of 24-carat Golden Oldies
Paris Fashion Week

Paris Fashion Week

Thom Browne's scarecrows offer a rare beacon in commercial offerings
A year of the caliphate:

Isis, a year of the caliphate

Who can defeat the so-called 'Islamic State' – and how?
Marks and Spencer: Can a new team of designers put the spark back into the high-street brand?

Marks and Spencer

Can a new team of designers put the spark back into the high-street brand?
'We haven't invaded France': Italy's Prime Minister 'reclaims' Europe's highest peak

'We haven't invaded France'

Italy's Prime Minister 'reclaims' Europe's highest peak
Isis in Kobani: Why we ignore the worst of the massacres

Why do we ignore the worst of the massacres?

The West’s determination not to offend its Sunni allies helps Isis and puts us all at risk, says Patrick Cockburn
7/7 bombings 10 years on: Four emergency workers who saved lives recall the shocking day that 52 people were killed

Remembering 7/7 ten years on

Four emergency workers recall their memories of that day – and reveal how it's affected them ever since
Humans: Are the scientists developing robots in danger of replicating the hit Channel 4 drama?

They’re here to help

We want robots to do our drudge work, and to look enough like us for comfort. But are the scientists developing artificial intelligence in danger of replicating the TV drama Humans?