As a result of reporting lower earnings, due to high research and development investment and lower sales in some markets, for the year ended December 31, 1994, Swiss company Ares-Serono's share price fell 4.6%. Earnings from continued operations totaled $38.6, down 61% on 1993. R&D spending increased 21.7% to $138.3 million, and sales reached $636.8 million, a decline of 5%, mainly due to lower turnover in Spain and Italy. Without the negative impact of these two markets, sales would have increased 22.3%.
The company says that fourth-quarter 1994 sales and earnings were also influenced by a shortage in Europe and the USA of some of its products. This shortage, combined with lower sales in Italy, lead to a temporarily unfavorable product mix in terms of profitability.
Following the completion of Phase III clinical trials in the USA, the US Food and Drug Administration approved a Treatment Investigational New Drug program in December 1994 for the use of Ares-Serono's mammalian cell-derived recombinant human growth hormone Serostim in HIV-associated catabolism, which is a leading cause of death in people suffering with AIDS.
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