Pliva has reported a 17% decline in first-quarter revenues as royalty income from sales of Pfizer’s antibiotic Zithromax fell through the floor, but said its generics business had a ‘strong’ quarter.

The Croatian drugmaker said group sales were up 4% to $271 million, with generic drugs rising 11% to $220 million, driven by a 40% hike in US turnover. Net income was down by a third - largely because of the loss of patent protection on Zithomax (azithromycin) which caused royalty revenues to slump 90% to $7 million - and came in at $30 million.

Pliva has been reinventing itself as a generics company in the wake of the patent expiry, exiting from its proprietary medicines activities, and was recently approached by acquisitive generics group Actavis.

The latter upped its offer to $1.85 billion towards the end of last month, but Pliva's management have given this improved bid only a lukewarm reception - saying it is still too low. It said in its first-quarter results statement that it has been approached by ‘a number of parties interested in acquiring the company, and that those discussions are advancing’.

- Meanwhile, Pliva has received a warning letter from the US Food and Drug Administration regarding the inspection of its manufacturing facility in Zagreb. The company said it does not expect this development to have any material impact on its financial outlook for 2006.