Medeva's Growth Dulled By "Fen-Phen" Effect

UK company Medeva experienced continued growth in the first six monthsof 1997, with sales up 30% at constant exchange rates to L159 million ($268.4 million). Pretax profits grew 35% to L46 million, and operating profits were L47 million up 45%. Earnings per share increased 18% to 8.5 pence.

Bill Bogie, the firm's chief executive, told journalists in London that this was solid organic growth typical of Medeva. However, initial market reactions were influenced more by two product-related factors that sent the firm's share price plummeting 37 pence, from 256.5 pence to 219.5 pence.

Studies of healthy young women who have taken a combination of fenfluramine and phentermine to lose weight presenting with valvular heart disease have had an adverse impact on sales of Medeva's phentermine product, Ionamin. The US Food and Drug Administration has recently taken steps to address this (see page 19). Turnover was L7 million in the first six months of the 1997, while in the second half of 1996 it had been L21 million.