Interim Profits At Shionogi And Green Cross Hit

Government price cuts were said to be behind the decline in profits experienced by one of Japan's leading pharmaceutical companies, Shionogi, in the first six months of the fiscal year to March 1997. Also having a negative effect were declines in over-the-counter retail prices.

Shionogi has just announced a restructuring plan which may involve job losses for around 1,700 staff, according to the Financial Times. The firm is to promote an early retirement plan and is suspending recruitment among university graduates for the next two years. Shionogi is also to reorganize its R&D operations, which will involve transferring part of the R&D unit currently in Osaka in Japan to Boston in the USA in the new year. For the full year, the firm expects to see declines in recurring profits and sales. The fall in sales will include 2.6 billion yen ($23.3 million) in relation to the expected transfer of marketing of the antidiabetes agent Humulin (recombinant human insulin) to the company's partner, Eli Lilly.

Meantime, Green Cross racked up an unconsolidated loss after writing off extraordinary losses as a result of the lawsuits relating to blood products infected with HIV (Marketletters passim). The company is also planning job cuts affecting 600 staff. Green Cross wrote off 8.3 billion yen in the April to September period due to the tainted blood products. The firm was blaming a decline in product turnover on the boycotting of its products by hospitals, according to local reports.