Pharmacia Profits Rise Sharply, Aided by a New Arthritis Drug

By REUTERS

NY Times, February 20, 2003

The Pharmacia Corporation, the drug maker scheduled to merge with Pfizer Inc., said yesterday that its fourth-quarter earnings rose on higher sales and a special gain from a legal settlement.

Pharmacia, based in Peapack, N.J., said net profit soared 549 percent, to $554 million, or 41 cents a share, from $86 million, or 6 cents a share, in the period a year ago.

Results in the quarter a year ago included merger and restructuring charges and write-downs from the company's acquisition in early 2000 of the Monsanto Company, a bio-agriculture company that Pharmacia has since spun off and now treats as a discontinued operation.

Fourth-quarter results included a special gain of 5 cents a share from a settlement of a patent dispute with Allergan Inc. over a competing ophthalmology drug. On an adjusted basis, earnings rose 12 percent, to $530 million, or 40 cents a share, from $475 million, or 36 cents a share, a year ago. Analysts polled by Thomson First Call had forecast, on average, earnings of 40 cents a share.

The arthritis treatment Celebrex and a newer treatment called Bextra, which was released last April, are Pharmacia's most important medicines. Combined sales of the drugs, which work by blocking the COX-2 enzyme linked to inflammation, rose 11 percent in the fourth quarter, to $996 million. For the year, they rose 13 percent, to $3.5 billion.

Quarterly sales of Celebrex fell 10 percent, to $812 million, as many patients gravitated toward Bextra, which works faster. Bextra had quarterly sales of $184 million, more than making up for the Celebrex decline.

Pfizer, already the world's largest drug maker, has said that it expects its $53 billion acquisition of Pharmacia to close by the end of the first quarter, subject to approval of American and European regulators.