Amersham looks solid ahead of GE acquisition

Related tags Cent Protein Biotechnology Amersham

In its last set of annual results before being acquired by General
Electric, Amersham of the UK reported lower profits last year as
currency effects bit into the company's bottom line, but saw its
drug discovery unit move into the black ahead of schedule in the
second half.

The UK-based firm, which specialises in medical diagnostics, separation technologies for biopharmaceutical production and drug discovery tools, said pretax profits fell 2.4 per cent last year to £294 million (€435m) as sales climbed 2 per cent to £1.65 billion. However, the effect of the weak dollar carved £39 million off its profits, which would otherwise have risen 14 per cent, according to the company.

At constant exchange rates, sales in the firm's flagship medical diagnostic division Amersham Health were up 9 per cent to £924 million, headed by the contrast medium Visipaque (iodixanol) which saw sales rise 38 per cent to £122 million. Operating profit at the division was up 5 per cent to £228 million, but with currency factors fell 11 per cent.

Amersham Biosciences, split into the protein separations and drug discovery units, continued to be affected by a slowdown in investment by the pharmaceutical and biotechnology sectors.

Sales at the protein separations business were £295 million, up from £276 million a year earlier, although operating profit was flat at £106 million (although up 9 per cent at constant exchange rates). The second half of 2003 was marked by strong (14 per cent) growth in laboratory separations, said Amersham, although this was held back by a slowdown in antisense drug development across the industry.

R&D expenditure was stepped up 18 per cent as Amersham gets ready to launch a number of new products in 2004-5, including AKTAexpress, a system for automated multistep high-throughput protein purification, and AKTAxflow, a system designed to harness the dual capabilities of chromatographic and membrane separations.

In bioprocessing, the recent launch of MabSelect affinity resin for the purification of monoclonal antibodies will be followed by a second generation product that will reduce the cost of the procedure.

Discovery systems moved into profit in the second half, although for 2003 as a whole the division posted an operating loss of £9 million, down from £32 million in 2002. Sales grew 2 per cent to £384 million. The move into the black followed reductions in R&D and manufacturing costs and a refocusing of the business portfolio, which together cost £20 million to implement but should achieve savings of £40 million by the end of this year.

The division is now focused mainly on cellular assays, protein analysis and microarrays (sold under the CodeLink banner), with a number of new products launched during 2003. These introductions included the IN Cell Analyzer 1000, a high-throughput sub-cellular imaging system and new DIGE days, sample preparation products and software for protein analysis.

Amersham is being acquired by GE for £5.7 billion, with the transaction due to complete in April.

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