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Loss Posted by Newport Pharmaceuticals

March 12, 1987

Newport Pharmaceuticals International Inc. said it had a fiscal 1987 third-quarter loss of $536,000, compared with net income of $116,000 a year earlier. Revenue for the period ended Jan. 31 was $2.1 million, down 33% from $3.1 million in sales a year earlier.

Sales in last year's fiscal third quarter were inflated by an inventory buildup by Newport's Mexican licensee, a spokeswoman for the company said.

For the first nine months of its fiscal 1987, the company reported a net loss of $790,000, compared with nine-month losses of $377,000 a year earlier. Revenue for the first three quarters of $7.1 million was down 6.6% from $7.6 million in the first nine months of fiscal 1986.

The Newport spokeswoman said the company's losses were caused by a drop in sales and an increase in general and administrative expenses--primarily because of changes in senior management that resulted in overlapping salary and benefit costs, and increases in outside consulting expenses.

The nine-month sales decline came largely from increased competitive pressures in the company's European markets, the spokeswoman said.

Newport's principal product is the proprietary drug Isoprinosine, used in Europe and Central and South America for the treatment of a number of viral diseases, including herpes simplex, mumps, measles and chicken pox.

The drug has never been approved for use in the United States, but is being tested by Newport as a possible treatment for patients who have been infected with the AIDS virus but who have not developed AIDS.

The company said it does not expect to receive results from such studies until the beginning of 1988 at the earliest and that until the results of the studies are known, the likelihood of obtaining Food and Drug Administration approval for domestic use of Isoprinosine is unknown.

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