Feb 20, 2003 By Linda Johnson Ap Business Writer 3 min read

TRENTON, N.J. (AP) – Pharmacia Corp. said Wednesday that fourth-quarter net income soared due to one-time gains in the quarter and a large restructuring charge and other costs that weighed down profits a year earlier. Including those special items, the drug maker’s net income surged to $554 million, or 41 cents per share, from $86 million, or 6 cents per share, in the October-December period of 2001.

Pharmacia, the maker of Rogaine baldness treatment and the blockbuster arthritis drug Celebrex, said adjusted net income was $530 million, or 40 cents per share, matching the forecast of analysts surveyed by Thomson First Call. A year earlier, adjusted net income was $475 million, or 36 cents per share.

One-time items in the 2002 fourth quarter included gains of $100 million on a patent infringement settlement, $15 million from other legal settlements, $26 million from licensing product rights, $18 million from gains on the sale of investments and $16 million in royalty income.

In the year-earlier quarter, the company took a $24 million charge for a decline in the value of some assets and a $274 million charge for merger and restructuring costs. Those were related to Pharmacia’s 2000 acquisition of the Monsanto Co. agricultural business, which it spun off Aug. 13 in preparation for a planned acquisition by Pfizer Inc.

Peapack-based Pharmacia said Wednesday that it still expects the acquisition to close sometime during the current quarter, although U.S. and European regulatory bodies have not yet given their approval.

Last month, Pharmacia sold the rights to a nasal spray, in mid-stage human testing for impotence and female sexual dysfunction, for $13.5 million.

The U.S. Federal Trade Commission ordered the sale because Pfizer already sells the lucrative impotence pill Viagra.

Fourth-quarter sales were up just 1 percent to $3.74 billion, buoyed by a 2 percent favorable impact from foreign exchange rates. Combined quarterly sales of Celebrex and a successor arthritis pain drug, Bextra, hit $999 million, up from $904 million a year ago, before Bextra was launched. Together, they account for about 60 percent of new prescriptions in their category.

Revenues were up significantly for the heavily advertised incontinence drug Detrol, growth hormone Genotropin and breast cancer drug Ellence, but sales were off more than 10 percent for eight other drugs. Pharmacia’s chief executive officer and chairman, Fred Hassan, noted that during 2002 the company overcame the loss of sales from its second-largest product, Ambien, and divested noncore businesses, including Monsanto and Pharmacia’s minority interest in Amersham Biosciences.

“These actions, along with key product acquisitions we made in 2002, strengthened the focus of our core pharmaceutical business,” Hassan said.

The acquisitions, for Pharmacia’s pipeline, include an experimental drug for cancer and one for asthma and chronic obstructive pulmonary disease.

Sales of prescription drugs dipped 8 percent in the fourth quarter, to $3.2 billion, but would have been up 7 percent, excluding 2001 sales of insomnia medicine Ambien. Pharmacia transferred the U.S. rights to Ambien to Sanofi-Synthelabo a year ago.

Hassan noted that none of Pharmacia’s key growth drugs face patent expiration before 2008; patent expirations and subsequent generic competition have been cutting into profits of other major pharmaceutical companies the past couple of years.

For all of 2002, net income was $597 million, or 44 cents per share, down 60 percent from $1.5 billion, or $1.12 per share, in 2001. Full-year sales totaled $13.99 billion, compared to $13.84 billion a year earlier.

___

On the Net: http://www.pharmacia.com