Currency Impacts Schering AG's Earnings Growth

Schering AG of Berlin, Germany, reported a 16% rise in first-half 1994 sales at 2.82 billion Deutschemarks ($1.79 billion; Marketletter July 25), but pretax profits improved a more modest 4% to 185 million marks ($117.2 million). The earnings slowdown was attributed in part to the weakening US dollar and pound sterling, whereas a strong yen had proved positive in the previous year.

In addition, the company says that a previous one-off license revenue payment was no longer in existence, the final withdrawal of subsidies for being based in Berlin is now taking effect, and and further one-time licensing rights for Betaseron (interferon beta) depending on sales must be effected.

First-half sales were comprised of fertility control and hormone therapy at 651 million marks, up 10%, therapeutics at 546 million marks, up 36%, diagnostics at 797 million marks, up 8% and other business at 24 million marks, no change. Beta-seron, now used in the treatment of multiple sclerosis, achieved turnover of 127 million marks, which was in line with the company's expectations, achieving two-thirds of the therapeutics unit's sales growth, which also includes central nervous system drugs, cardiovasculars and oncology products. Diagnostic sales improved despite increasing pressure on prices, with volume growth in Europe for Ultravist and Magnevist.