U.S. x-ray market exerts drag on Nycomed Amersham’s financials

Company reports first results since 1997 merger

Contrast media developer Nycomed Amersham reported its first combined financial results since the company was formed through the merger of Nycomed and Amersham International last year. The Buckinghamshire, U.K., firm said it experienced strong growth in its imaging business, with the exception of U.S. x-ray contrast sales, which continue to suffer from price pressures.

As the company is changing its fiscal year end from March 31 to Dec. 31, Nycomed Amersham's 1997 financial period was actually nine months long. If the company included results from December to December on a pro-forma basis as a combined entity, it would have posted revenues of $2.31 billion.

Nycomed Amersham's imaging revenues for the 12-month period were $1.11 billion, up 6.3% from the previous year at constant exchange rates. Sales of x-ray contrast media in the U.S. fell 15% to $255.2 million, but grew 6% outside the U.S. to $292.1 million. Omnipaque, the company's leading x-ray agent, recorded worldwide sales of $402.9 million. X-ray contrast sales in the U.S. are expected to fall further in 1998, the company said, but should stabilize next year now that the company has finalized contracts with major managed-care providers through 2000.

Nycomed Amersham's difficulties in x-ray in the U.S. were offset by growth in other businesses. The company's radiopharmaceuticals business enjoyed a 17% increase, thanks in part to 79% growth in sales of Myoview, a new heart imaging agent. Myoview sales totaled $56.1 million, while the radiopharmaceuticals business as a whole brought in $423 million in sales.

In MRI, Nycomed Amersham cited progress achieved in 1997, such as its receipt of Food and Drug Administration approval for pediatric imaging with its whole-body Omniscan agent. The approval of liver imaging agent Teslascan in November will add to revenues in 1998. Nycomed Amersham's revenues from MRI contrast sales grew 12% to $70.5 million.

Nycomed Amersham spent $137 million on R&D in imaging last year, with the development of its NC100100 ultrasound contrast agent a major priority. NC100100 is being targeted for the diagnosis of chronic and acute heart disease, and for identifying cancerous liver tumors. The company has completed phase II clinical trials for the agent, and expects to file for regulatory approval in the U.S. and Europe by the end of 1998. Nycomed Amersham also announced that Daiichi Pharmaceutical has exercised its option to market NC100100 in Japan, where Daiichi also markets Nycomed Amersham's x-ray and MRI contrast agents.

Other contrast agents under development include NC100150, an intravascular MRI agent for MRA as well as myocardial and brain perfusion and tumors. The company is also pursuing the use of inert gases such as helium and xenon as MRI contrast agents, with the first application in lung imaging.

Radiopharmaceutical agents in the pipeline include AcuTect, a peptide-based agent for deep vein thrombosis that has been licensed from Diatide of Londonderry, NH. AcuTect has received an approvable letter from the FDA. Phase III studies have been completed on P829, another Diatide agent, for lung-cancer uses.

Meanwhile, DatScan is an iodine-123-labeling agent for early diagnosis of Parkinson's-like syndromes and has completed phase III studies. Phase II studies are about to begin on Prognox, an imaging agent for identifying oxygen-deficient tissue, a condition often associated with tumors.

The company reported that the integration of the Nycomed and Amersham businesses is going well. Nycomed Amersham is consolidating its business sites, going from six to three sites in the U.S., with its imaging headquarters in Princeton, NJ. In Europe, the company is reducing the number of sites in each major country from three to two. The company expects to realize cost savings of $67.1 million a year due to consolidation of its operations.