Chiron Corp. topped $1 billion in annual revenues in 1995 for thefirst time in its 15-year history, thanks primarily to its strategicalliance with Swiss pharmaceutical firm, Ciba-Geigy Ltd., whichacquired about 50 percent of the biotechnology company in late1994.
Expenses associated with the Ciba collaboration also were a majorsource of $509.8 million in charges taken by Chiron for the year,resulting in a 1995 net loss of $512 million, or $12.62 per share. In1994, Chiron had a net income of $18.3 million, or 53 cents pershare.
The company's $1.1 billion in revenues was more than double the$454 million in 1994.
Chiron posted a profit for the fourth quarter of $17.6 million, or 40cents per share, on revenues of $326 million. In the same threemonths the year before revenues were $134 million and the companyrecorded a net loss of $4 million, or 13 cents per share.
The 1994 fourth quarter loss reflected charges related to the alliancewith Ciba, of Basel, Switzerland, and collaborations with CephalonInc., of West Chester, Pa., and Viagene Inc., of San Diego. Chironacquired Viagene in September 1995 for $95 million.
Of the $509.8 million in charges for 1995, $132 million were relatedto expenses associated with the Viagene takeover and $272 millionwere for the Ciba partnership. The Swiss drug maker bought 49.9percent of Chiron in a deal valued at $2.1 billion.
Through the alliance, Chiron acquired Ciba Corning DiagnosticsCorp., of Medfield, Mass., and Ciba's interest in their vaccine jointventure, Biocine S.p.A., of Siena, Italy. The addition of those twobusinesses added revenues of $585 million in 1995.
Chiron's takeover of IOLAB, of Claremont, Calif., from Johnson &Johnson, of New Brunswick, N.J., also boosted revenues, increasingophthalmic product sales to $177 million last year.
Chiron's acquisitions in diagnostics, vaccines and ophthalmicsaccounted for the vast majority of the company's revenue growth.Product sales from the three businesses combined for about 75percent of total revenues.
During 1995, Chiron also received from Ciba $27 million forresearch programs and $5.5 million for a non-exclusive license tocombinatorial chemistry technology.
In Chiron's other major business, therapeutics, the leading product isBetaseron for multiple sclerosis. The company's marketing partnerfor the drug is Berlex Laboratories Inc., of Wayne, N.J., a subsidiaryof Schering AG, of Berlin, Germany.
Betaseron sales to Berlex for 1995 declined to $67.7 million from$100.1 million in 1994.
Chiron released its earnings report after the market closedWednesday. The company's stock (NASDAQ:CHIR) endedThursday at $111.12, down $1.25.
Because of the huge charges taken during 1995, analysts have haddifficulty getting a clear picture of earnings.
However, David Crossen, analyst with Montgomery Securities Inc.,of San Francisco, said investor interest in Chiron "has had nothing todo with what happens in 1995 or 1996. The breakout year forearnings is 1997."
Next year, Crossen observed, Chiron likely will have three new drugson the U.S. market: an acellular pertussis vaccine; Myotrophin, atreatment for amyotrophic lateral sclerosis, or Lou Gehrig's disease,co-developed with Cephalon; and Depocyt, a cancer drug developedwith DepoTech Corp., of La Jolla, Calif.
Expectations for 1997 plus recent investor interest in biotechnologyindustry wide have pushed Chiron's stock up more than 100 percentin the last nine months from $54.87 to $111.25. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.