Dutch pharmaceuticals and chemicals group Akzo Nobel has posted a solid set of results for the first quarter, which at first glance look terrific as net income jumped 116% to 287 million euros or one euro per share.

However, closer inspection reveals that the leap is almost exclusively due to a one-time payment of 149 million euros, which Akzo’s pharmaceutical unit Organon received from Johnson & Johnson’s Janssen-Cilag group as part of the termination of their co-promotion agreement for the latter’s antipsychotic drug Risperdal (risperidone) [[01/04/05b]].

Akzo revenues for the quarter sneaked up 3% to 3.04 billion euros, including the positive effects of currency changes and divestments, while Organon sales fell 3% to 576 million euros. Earnings before interest and taxes and exceptional items for the division reached 236 million euros, up from 68 million euros, thanks to the J&J payment.

In terms of products, the generic competition which has eaten into sales of the antidepressant Remeron (mirtazapine) in the USA has slowed there but has started in Europe, though turnover of the follicle-stimulating hormone product Puregon/Follistim (follitropin beta injection) was up 28%, as Organon noted that previous manufacturing issues have now been resolved.

The hormone replacement therapy Livial (tibolone) performed less well, though the company feels this is principally due to the general decline in the HRT market, but sales of the contraceptive NuvaRing (etonogestrel/ethinylestradiol)) were up 70% and have increased five-fold over the last two years.

Analysts at ING said Organon “appears to be turning the corner.” They argue that Akzo’s main potential upside may come from anti-psychotic drug asenapine developed with Pfizer [[21/10/03a]], adding that the treatment, which is in Phase III, could trigger stock movement in May when more clinical data are published.