Generic Competition Hits Kaken's Altz

Kaken Pharmaceuticals says turnover was down 10.7% for the year ended March 1996 at 70.34 billion yen ($644.7 million) as a result of generic competition for its mainstay product Artz (hyaluronate sodium), sales of which fell nearly 19% to 25.70 billion yen. Prospects for the forthcoming year are also dull, the company says, because of government-mandated price cuts which came into effect this April. The price of Artz has been reduced by 15.8%, and Kaken's total products were subject to an average 10.8% reduction. Kaken expects fiscal 1996/97 sales to drop slightly to 70.00 billion yen.

Recurring profits slumped from 7.75 billion yen to 3.84 billion yen, and net profits declined from 2.81 billion yen to 1.27 billion yen, while earnings per share fell from 30.6 yen to 13.9 yen. For the coming year, Kaken forecasts recurring profits of 3.70 billion yen, net profit of 1.20 million yen and EPS at 13.10 yen. An added problem for Kaken is the lack of new products to launch, the first being the fibroblast growth factor KCB-1, expected to come to market in 1998.