Pharma tech growing strongly at Cardinal
to $14.1 billion (€11.2bn) in the fourth-quarter of 2003, as a
strong performance in its pharmaceutical manufacturing services,
pharmacy automation and medical product business outweighed a
slowdown in drug wholesaling.
Operating earnings in the period, the company's second quarter, rose 6 per cent to $584 million, from $553 million a year ago, and for the first half Cardinal generated $548 million of operating cash flow, a rise of 53 per cent.
Robert Walter, Cardinal's chief executive, said that the problems affecting the distribution business were short-term and that the company would see a return to its historic, double-digit earnings growth.
Cardinal's pharmaceutical technologies business, which provides sterile packaging and other, posted a 33 per cent rise in operating earnings to $113 million on sales up 58 per cent to $659 million.
The biggest contributors to this growth were Cardinal's nuclear pharmacy service, bolstered with the acquisition of Syncor in January 2003, as well as its oral technologies and packaging services. Gains in oral drug manufacturing and packaging services were led by ongoing demand for Pfizer's incontinence drug Detrol LA (tolterodine), Lilly's Zyprexa Zydis (olanzapine) for schizophrenia, AstraZeneca's new cholesterol-lowerer Crestor (rosuvastatin), and Wyeth's painkiller Advil (ibuprofen), all of which are manufactured or packaged by Cardinal Health.
Pharmaceutical distribution sales rose to $11.4 billion, up 9 per cent over the prior year, but these gains were dampened by a decline in bulk from stock sales as pharmaceutical companies put in place measures to make it harder for wholesalers to negotiate discounts.
At the pharmacy automation business, which makes drug sorting and dispensing machines, operating profit rose 15 per cent to $80 million on revenue of $187 million. The medical products division posted sales up 12 per cent to more than $1.8 billion, driven by strong performances in products such as surgical gloves, bone-cement delivery systems used to repair fractures, thermal therapy products and procedure-based delivery systems.
Cardinal also reiterated full fiscal year guidance of mid-teens or better earnings per share growth, before special items, and operating cash flow of approximately $1.3 billion.