steadily. At the same time, misgivings over the safety of some forms of
inhaled post-attack steroids were boosting sales of anti-inflammatory
asthma drugs like Intal and Tilade. The company was still waiting for final
approval for Tilade from the FDA, but this was widely believed to be only
months away. However, the results announced by Kerridge the following
day were not quite as everyone had expected. For the first time in over a
decade, Fisons’ profits – while up by 6 per cent – had failed to meet expec-
tations. The reason, explained Kerridge, was that £10 million had been
wiped off profits following supply problems with two of the company’s
older drugs – Imferon (a blood product), and Opticrom (an anti-allergy eye
treatment). Kerridge went on to explain that the disruption to supplies was
caused by an ‘extremely pedantic’ US Food and Drugs Administration,
which, having recently been hit by drug approval scandals, was clamping
down on the minutiae of drug manufacturing.^23 The FDA had demanded
changes to the way Fisons produced ultra-pure water for Imferon, and
changes to the quality control methodology on Opticrom. Kerridge assured
the assembled interested parties that there was nothing wrong with any of
the company’s products, and that sales of Imferon in the US had already
restarted. Opticrom would also be back on the market in the near future.
The City was stunned. Analysts’ forecasts for the year were duly cut by £20
million to £255 million. Kerridge remained upbeat about the company’s
growth prospects. Sales of Intal had risen by a further 15 per cent, provid-
ing most of the group’s profits for the year. As for US approval on Tilade,
Kerridge was confident enough to declare that ‘We have ticked all the
boxes and are awaiting the final letter’.^24 Nevertheless the share price took
a 35p downward leap, closing at 464p on the day.
Following the announcement, the company stepped up its routine of
visits to key brokers and financial institutions. The visits did nothing to
reassure the analysts who, critical of the company’s reluctance to discuss
key areas of the business, marked the shares down further on suspicions
that the US problems may be more serious than the interim statement had
implied. Their worst fears were confirmed – and exceeded – on 11
December 1991, when Fisons proclaimed that:
The Interim results announced in September identified the adverse impact
on Fisons’ results of the voluntary withdrawal in the USA of the iron dextran
product Imferon and Opticrom, an anti-allergic eye preparation. At that time
there was good reason to believe that the production and quality control
issues, which were the only reason for these withdrawals, would be resolved
quickly. Unfortunately, this has not been the case, and it is now clear that
supply of these products will not be resumed in 1991.This further delay has
a significant impact upon the Company’s profits in 1991, which are heavily
geared to the final quarter ... The total impact on profits, including the result-
ant increased finance charge, is approximately £65m.This will have the effect278 Relationship Marketing