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This article was originally published in The Gray Sheet

Executive Summary

OSTEOTECH'S FIRST HALF REVENUES INCREASE 35% TO $9 MIL., driven by increased sales of the company's Grafton allogeneic bone matrix product, as well as allograft tissue processing revenues and sales of ceramic coating services and products gained from the acquisition of HC Implants BV during the second quarter of 1992, the firm reported Aug. 4. Second quarter revenues were $4.3 mil., up 14% from the corresponding period a year earlier. Increases in Grafton sales and allograft tissue processing were partly offset by a decrease in income from the ceramic coating business, which Osteotech President Patrick McBrayer attributed to a "general decline in the orthopedic prosthetic market." Net income was $376,000 for the six months, compared to $93,000 a year earlier, while 1993 second quarter earnings were $101,000, compared to a net loss of $232,000 in the second quarter of 1992. McBrayer said the company "has taken actions designed to reduce spray coating operating costs which are expected to be fully implemented by first quarter 1994." He added that the firm is "extremely pleased with the progress of products under development which utilize HC Implants' Polyactive technology and the marketing and licensing potential of these products." Gull Laboratories, which completed its merger with Biolab, SA of Belgium in June, reported consolidated sales of $4 mil. and earnings of $653,000, more than double year-ago period profits, for the second quarter of 1993. Gull President and CEO Milton Adair noted that the positive effects of the merger with Biolab "are already apparent" and that it "has allowed [the company] to develop a pricing program to expand sales of our entire product line throughout the European market." Previously, the company's products -- diagnostic test kits for the detection of infectious diseases -- "were priced out of many markets due to several layers of distributor markups." Meridian Diagnostics reported healthy sales growth in the third quarter, up 25% to $4.3 mil. A drop in net income for the period of 26.2% to $302,000 reflects the impact of $450,000 in expenses incurred in conjunction with the planned offering of 2 mil. shares. Meridian decided to withdraw the stock offering at the end of July ("The Gray Sheet" Aug. 2, p. 22). The after-tax impact of these one-time expenses was $284,000. "Had these expenses not been incurred, the fiscal 1993 third quarter and nine month net earnings would have been $586,000" and $1.3 mil., respectively, Meridian said. San Diego, California-based Quidel's net sales rose 13.8% to $6.4 mil. for its 1994 first quarter (ended June 30), the company announced Aug. 4. Quidel attributed the gain to sales to marketing partners and the company's QuickVue and Conceive one-step fertility products for the doctor's office and home testing markets. Quidel's sales and marketing expenses, along with certain one- time distribution costs associated with introductory allowances, "contributed significantly" to a net loss for the quarter of $609,000, compared with a net loss of $331,000 during the first quarter of the prior year, the company said. "This past quarter we added several important drug chain accounts to our list and increased our distribution from 25% to 52% of retail pharmacy stores across the United States," Quidel said. "We now distribute the company's Conceive One-Step products to Walgreen's, Rite Aid, Osco, Sav-on, Longs, PayLess, Pathmark, Drug Emporium, Genevesse, Costco, Thrifty, Eckerds, and many others." The firm also noted that it has signed a letter of intent to acquire the consumer fertility product line of a French company. Ventritex' results for the fourth quarter (ended June 30) include initial sales of the Cadence implantable defibrillator system, approved by FDA on April 30 ("The Gray Sheet" May 10, p. 3). Revenues nearly tripled for the three months, to $9.4 mil. The sales advance was accompanied by a $25.1 mil. net loss for the period, reflecting a $18.6 mil. charge in connection with cross-licensing agreements with Lilly subsidiary Cardiac Pacemakers, Inc. and Telectronics ("The Gray Sheet" Aug. 2, p. 9). The company stated that its fourth quarter results also "reflect increased royalty payments made on approved products and increased inventory reserves related to changing product mix." For the year, Ventritex sales were $25.1 mil., compared with $9.5 mil. the year earlier; the net loss for the 12 months was $33.3 mil. Elscint Ltd. reported second quarter (ended June 30) revenues of $60.3 mil., a 16% increase compared to the same quarter last year, while net income for the quarter soared 41% to $7.2 mil., as compared with the corresponding quarter of 1992. For the first half of FY 1993, net income totaled $16.5 mil., up 82% from the same period last year, on sales of $117.2 mil., up 13.3%. New products "generated approximately 50% of systems revenues for the quarter," according to Shmuel Parag, president and CEO of Elscint. He also said the company plans to begin deliveries of the Apex CardiaL, a dual head cardiac-optimized "L" shaped camera, during the first quarter of 1994. Haifa, Israel-based Elscint Ltd. and its U.S. subsidiary Elscint Inc. announced on July 15 that its patent disputes with Sopha Medical Systems, Inc. and its French parent company, Sopha Medical S.A., had been settled through a comprehensive agreement that provided monetary payments to Elscint. Chiron reported net income of $5.4 mil. on revenues of $76.8 mil. for its second quarter (ended June 30), versus a net loss of $3.8 mil. on sales of $68.8 mil. for the same period a year earlier. For the second quarter and first half of 1993, Chiron's 50% share of pre-tax profit from its joint diagnostics business with Ortho was $19.4 mil. and 39.2 mil., up 5% and 4%, respectively, over the corresponding periods of 1992.

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