Hoechst Nine-Month Profits Plunge 49%

Hoechst, the German pharmaceuticals and chemicals company, has announcedpretax profits for the first nine months of 1997 of 2.9 billion Deutschemarks ($1.68 billion), a 49% drop compared with the corresponding period last year, which the company put down to high gains from the sale of businesses during its shift away from chemicals in 1996. Group sales rose 4% to 40 billion marks, due mainly to a 6% increase from favorable exchange rate movements.

HMR Profits Decline Rather more disturbing for the group was the 13% drop in operating profits at the company's life sciences division, Hoechst Marion Roussel. The company said that this was due in part to adverse market conditions, most notably to a greater-than-expected effect of government cost-control measures in Japan and Germany. High R&D spending affected growth, as did disappointing sales of HMR's antihistamine Seldane (terfenadine) and Trental (pentoxyfylline) for circulation disturbances, which has been hit by generic competition in the USA.

Hoechst said that the group expects operating profit in the fourth quarter to be significantly higher than in 1996, but acknowledged that "we may have to face additional challenges in the short term given the mature nature of HMR's product line."