UCB Profit Fell 39% in First Half
Belgian drug maker UCB Group said Thursday first-half net profit fell 39% as it absorbed the cost of taking over Germany's Schwarz Pharm.
The company warned that the acquisition would also hit full-year results.
UCB reported first half net profit of 171 million euros ($235.5 million) compared with 279 million euros a year ago, blaming one-off expenses and financing from the purchase it hopes will take it into the pharmaceutical major league.
These costs will continue to erode profit for the full year which UCB said would exceed 100 million euros ($137.7 million) even as it raised its target for synergy savings from the takeover to 380 million euros ($523.3 million) over three years up from 300 million euros ($413 million). Some 130 million euros ($179 million) of that would be saved this year.
Pharmaceutical sales were also hit by the euros high level against the U.S. dollar and Japanese yen which made its anti-epilepsy drug Keppra and others more expensive for customers in key world markets.
Chief Executive Roch Doliveux said the company was now in a critical growth phase with the U.S. rollout of Parkinson's disease patch Neupro and an anti-allergy drug Xyrzal in the second half of the year.
These product launches will increase operating costs for the last six months of 2007, the company warned.
UCB said its first half was usually stronger than its second with higher demand for allergy drugs. It did not break down its results for each quarter.
Analysts at KBC Securities said the results were better than expected, boosted by a surprise 47 million euros royalty payment from Pfizer which licenses UCB's allergy drug Zyrtec while operating costs remained "very well under control," Dow Jones Newswires reported.