Schwarz back on track

Germany's Schwarz Pharma, which is in the process of being acquired by Belgian group UCB in a deal valuing the company at some $5.6 billion (Marketletter October 2), has reported a profit for the first nine months of 2006, but the third quarter still showed a loss. Net profit in the nine-month period reached 14.0 million euros ($17.6 million) compared with a loss of 48.4 million euros in the like, year-earlier period. The figures are slightly ahead of consensus forecasts.

The up-front payment from US drugs giant Pfizer for the rights to fesoterodine was a major contribution to net cash generated from operations of 79.9 million euros in the first three quarters versus 700,000 euros in the like period of 2005, the firm said. Group sales over January-September dropped 0.3% to 720.2 million euros. The company's chairman, Patrick Schwarz-Schuette, said the nine-month figures showed the firm on target. Schwarz expects sales of 900.0 million euros in the full year and break-even on the profit line.

Schwarz has said it intends to expand its new drug development pipeline and invest additional funds. R&D spending in the first nine months was 153.5 million euros. The loss in the third quarter was reduced to 23.3 million euros after a year-earlier third quarter loss of 50.5 million euros. Group sales in the three-month period went up 1.4% to 236.8 million euros.