Merger With Yugoslav Firm Buoys SPI

COSTA MESA —  Buoyed by its merger with Yugoslavia’s largest drug manufacturer, SPI Pharmaceuticals Inc. on Monday reported sharply higher profits and sales for the second quarter.

The Costa Mesa-based subsidiary of ICN Pharmaceuticals Inc. reported net income of $5.7 million, up 42% from $4 million for the corresponding period last year. Sales for the quarter ended May 31 were $54.6 million, up 71% from $32 million a year earlier.

The company said totals for the quarter included $19.8 million in sales from the Yugoslav joint venture company, ICN Galenika, which began operations on May 1.

Excluding the results of ICN Galenika, SPI’s sales were up 9% to $34.8 million. The small increase was largely due to the introduction of several new antibiotic products, including an advanced form of cephalosporin, a drug used for treating internal infections, said Jack Sholl, a company spokesman.

SPI’s sales in the United States increased 42% to $10.3 million from $7.3 million a year earlier. Sales were also higher in Canada and Mexico, with sales to Mexico helped by increasing demand for the company’s injectable multivitamin called Bedoyecta.

Jeffrey Kilpatrick, president of Newport Securities Corp. in Costa Mesa, said SPI has done a “pretty good job” of getting the Yugoslav venture started. “The risk they’ve taken on the Yugoslav deal is paying off for the company--for now.”

But he pointed out that the results from ICN Galenika came before the current crisis in Yugoslavia, where the federal government has used military force to stop efforts by Croatia and Slovenia to secede from the nation. ICN Galenika’s manufacturing facility is in Belgrade, Yugoslavia’s capital city in the republic of Serbia.

“You have to be somewhat concerned that the political troubles in Yugoslavia, which started in June, could have an effect on the continuing success of their venture,” Kilpatrick said.

For the six-month period, earnings rose 30% to $8.8 million from $6.8 million during the same period last year. Sales were up 30% to $85.3 million, from $57.8 million.

SPI stock closed Monday at $19 a share, up 75 cents in American Stock Exchange trading.

SPI Gets a Boost From ICN Galenika

In the second quarter ended May 31, SPI Pharmaceuticals Inc. reported net income of $5.7 million as its revenues rose 71% to $54.6 million. The company attributed the increase to its joint venture with Galenika, a Yugoslav drug company, which resulted in the formation of ICN Galenika.

Figures are in thousands, except per-share data.

2th Qtr 2th Qtr 6 Months 6 Months 1991 1990 1991 1990 Revenue $54,635 $31,961 $55,257 $65,671 Net income (loss) $5,681 $3,986 $8,831 $6,796 Per share (loss) $0.40 $0.29 $0.62 $0.50

Source: SPI Pharmaceuticals Inc.