Galen's results beat analysts' forecasts

Analysts were moving to raise their forecasts for Galen last night after the company firmly beat expectations with its first-quarter results.

The Craigavon-based pharmaceutical firm said it had made a pre-tax profit of $49 million (€45.9 million) in the three months to December 31st, up 221 per cent on the same period of the previous year.

The growth, which reflected the impact of acquisitions in late 2002 and early 2003, came as product revenues doubled to $141 million. Analysts had been expecting sales of between $132 and $139 million.

The strong sales performance was attributable to solid demand for Galen's contraceptive pill, Ovcon and its hormone-replacement therapy, Femhrt.

Pre-menstrual treatment, Sarafem, which is the subject of US patent litigation, also made a solid contribution to profits.

Galen executive chairman, Dr John King, said yesterday that the firm was expecting resolution of the Sarafem case in May or June.

He remains convinced that Galen's defence on the patent challenge will be upheld.

Dr King also expressed confidence in closing a complicated deal with generic US pharmaceutical firm, Barr, during the current quarter. The competition implications of the transaction are being investigated by the US Federal Trade Commission.

Dr King said he was "delighted" with Galen's performance over the first quarter.

He rejected suggestions that sales of the firm's flagship intravaginal menopausal treatment, Femring, might have been lower than expectations over the period, pointing out that the product remained in its launch phase.

Galen generated cash of $47.3 million over the quarter, with total cash on the firm's balance sheet now standing at $167.5 million as against net debt of $174.1 million.

Dr King acknowledged that the firm had now fully digested its past acquisitions and was now ready to consider new expansion.

Galen has attempted to get planning permission for a substantial manufacturing plant at Ardee in Co Louth but the application stalled after attracting fierce local opposition. He said the company hoped to identify a new manufacturing location this year.