Overall, the group posted net income of €287m for the first quarter of 2005, an increase of 116 per cent on the first quarter of 2004, although this was boosted by a pay-off related to the termination of its co-promotion deal for the schizophrenia drug Risperdal (risperidone) with US-based Johnson & Johnson.
Group revenues dipped 4 per cent to €3.04bn, while Akzo's pharmaceutical unit Organon saw sales slip 3 per cent to €576m. Operating income at the pharma division - without the J&J contribution - would have risen to €87m from €68m.
The performance of Akzo's active pharmaceutical ingredient and contract biologicals producer Diosynth is hard to gauge now that it has been subsumed into the wider structure of Organon, Akzo's pharmaceutical business. But the company did divulge that the unit continued to be affected by overcapacity in the marketplace.
Contraceptive turnover was up 6 per cent at €132m, while turnover of antidepressant Remeron (mirtazapine) slumped 24 per cent to €66m on continued generic competition, while Livial (tibolone) fell 10 per cent to €35m.
Akzo's chief financial officer Rob Frohn said it would take two or three years to get the pharma business back on track, pointing to a near-term pipeline that includes five drugs in Phase III testing.
Meanwhile, in a research note analysts at Lehman Brothers said a break-up of Akzo in 2007 was a growing possibility, given management statements that its current focus on pharmaceuticals, chemicals and coatings 'are not a logical combination'.
