By Mary Welch

Chiron Corp. heartily bested Wall Street's estimates by reporting first-quarter 2000 income of $40 million, or 21 cents per share, a stunning 50 percent increase in adjusted earnings per share over the same period last year, when the company earned $26 million, or 14 cents per share.

Wall Street underestimated Chiron's EPS by fully 40 percent. The Street thought Chiron would come in at about 16 cents per share.

Excluded from the 1999 results are about $3 million of after-tax restructuring and reorganization charges.

Total revenues for the latest quarter increased 23 percent to $217 million, compared to $176 million for the same period last year. Product sales grew to $158 million from $93 million in the first quarter of 1999.

As of March 31, the company had a little more than $1 billion in cash on hand.

Kevin Tang, an analyst with Deutsche Banc Alex. Brown in New York, wrote that the company had a strong quarter. "Following significant restructurings in 1998 and 1999, Chiron is positioned to leverage top-line growth from new product introductions." Tang predicted the company will have "total revenue growth of 14 percent compounded annually from 2000 - 2003, resulting in earnings per share of 25 percent compounded annually over the same period."

The gross profit margin in the biopharmaceutical unit was 67 percent, down from 71 percent for the first quarter of last year.

The Emeryville, Calif.-based company saw sales and royalties for Betaseron drop 3 percent to $48 million. Betaseron (interferon beta-1) is a drug for multiple sclerosis marketed in the U.S. by Berlex Laboratories Inc., of Wayne, N.J. Berlex is a subsidiary of Schering AG, of Berlin.

Chiron's revenues from Schering's European sales of Betaseron, marketed as Betaferon, are recorded separately. Sales of Betaseron to Berlex Laboratories for marketing and resale increased 28 percent to $19 million. Royalties from Schering's European sales of Betaferon were $8 million for this quarter, up 10 percent over last year's figures.

Proleukin (aldesleukin, a recombinant form of interleukin-2) sales were $19 million, a decline of 26 percent over last year's first quarter. Chiron blames the reduction in wholesaler inventory levels for the decline in Proleukin sales.

In contrast to the biopharmaceuticals unit, vaccine product sales grew 147 percent to $65 million over last year's figures. The gross profit margin was 73 percent vs. 41 percent for the first quarter last year.

Blood testing revenues in the quarter increased to $26 million, up slightly from the $25 million recorded in the first quarter of last year.

Chiron's stock (NASDAQ:CHIR) closed Thursday at $36, up $1.437.