Profits Drop at Viratek, Rise at SPI

Viratek Inc., a subsidiary of ICN Pharmaceuticals Inc., reported a 43% drop in second-quarter earnings Friday, while its sister company SPI Pharmaceuticals Inc. showed a record 33% jump in profit for its second quarter ended June 30.

Higher profits for SPI, which manufactures and distributes 600 prescription pharmaceutical products, were explained by a 56% increase in the company’s gross profit margin, officials said.

The drop in earnings for Viratek, which develops and licenses pharmaceutical compounds for nucleic acid research, was blamed on an increase in research and development expenses.

Viratek said that after years of cuts in research spending, it began renewed work in developing biomedical and diagnostics products.

The company will receive royalties on any future sales of products developed under its resurgent research and development program, Viratek stated.

Viratek holds the patent for the virus-fighting drug, Virazole, which is manufactured and distributed by SPI to more than 40 countries.

In the second quarter, Viratek had a profit of $152,000, or 1 cent a share, compared to $269,000, or 2 cents a share, for the same period the year before.

Revenue was up a slight 2%, from $260,000 in the second quarter of 1991, to $265,000 for the like period this year.

For the first six months, Viratek earnings are up 138%, to $1.5 million, or 11 cents a share, from $628,000, or 4 cents a share, in the previous six-month period.

Revenue was also up substantially--to $2.3 million for the first six months of 1992 from $1.5 million for the first half of 1991.

SPI, which is ICN’s largest subsidiary, had 1992 second-quarter profit of $8 million, or 46 cents a share, compared with $6 million, or 36 cents a share, for the same period last year.

SPI’s quarterly revenue was $151 million, more than double its 1991 second-quarter revenue of $73 million. ICN Galenika, SPI’s joint venture in Belgrade, Yugoslavia, contributed $121 million to 1992 second-quarter sales.

For the first six months of 1992, SPI profit was $16 million, or 90 cents a share, up 60% from $10 million, or 57 cents a share, in the same period last year.

SPI revenue for the first six months was $272 million, more than double $107 million in the same period in 1991.