1995 A Turning Point For Genetics Institute

Genetics Institute experienced a major turning point in 1995. 15 years since its establishment, GI has created a platform for future operating profitability. Excluding a special one-time acquisition charge of just under $25 million, the firm would have reported net income for the year of over $2 million or 9 cents per share.

GI says that it expects to be profitable in 1996, but points out that this is dependent on a number of factors. One issue is the volume and cost of bulk recombinant human antihemophilic factor concentrate that GI produces and sells to Baxter International, which markets the product as Recombinate.

Another important issue for GI in relation to profitability is sales by licensees of erythropoietin, and the impact of infringement litigation in EPO royalty income. In January 1996, GI expanded its EPO license agreement with German firm Boehringer Mannheim (Marketletter February 5). BM has agreed to pay GI license fees and benchmark payments for certain expanded territories, portions of which will be realized when BM receives approval to market EPO in the newly-licensed territories.