ZENECA chairman Sir David Barnes shrugged off the possible threat from a predator to give an upbeat view of the pharmaceutical group's results and prospects

yesterday.

Underlying profits growth was 19% for 1997, although the

published pre-tax figure was 7% up at #1080m.

The difference largely reflected the impact of sterling. Nine-tenths of sales are overseas.

Sales on a like-for-like basis were 11% higher, indicating that margins improved. Return on sales advanced from 19.4% to 20.9%.

The results were driven primarily by the pharmaceuticals side, where 17% volume growth was seen. More than a fifth of sales comes from products introduced since 1995.

Zeneca's portfolio covers drugs for heart disease, cancer and asthma. In cancer it is aiming to be the world number one and has several products which are expanding their range of applications.

The main drugs are Nolvadex, the top seller for breast cancer, and Zoladex a leading drug for prostate cancer.

Sir David was at pains to stress that they have an active development pipeline, with 87 products under development and 26

chemical entities under investigation for therapeutic properties. Many existing products are being trialled for new applications.

Pharmaceuticals chief executive Tom McKillop said they were seeing the fruits of a reorganisation of the research department.

Zeneca has other strings to its bow, agrochemicals and speciality products. The former's profits grew by 19% and the latter's by 41%.

Insecticide sales were down as there were fewer plagues but

herbicides, the biggest product sector, and fungicides, more than made up for this.

The big product launch of the year was Amistar fungicide which sold very well.

It is manufactured at the group's Grangemouth plant.

Specialities include Quorn, the mushroom-based meat substitute, which saw its sales jump by two-fifths after further expansion of the product range.

Zeneca ended the year with net cash of some #40m, though this will diminish this year as a result of acquisitions.

The current year will benefit less from currency hedging than 1997 but Sir David said the group entered 1998 in a strong position. Recently launched drugs would gain further market share as they were rolled out in new markets and he was confident the target of average earnings growth of 15% would continue to be achieved.

Zeneca is paying a final

dividend of 25p, making a total of 38.5p, an increase of a tenth. The results were up to expectations but the shares slipped 6.25p to 2612.5p in yesterday's general malaise.

Comment Page 25