AP Features, April 19th, 2007
Schering-Plough Corp. said Thursday its first-quarter profit rose 55 percent to easily beat Wall Street expectations, helped by strong demand for its Remicade drug and other products.
Net income after paying preferred dividends increased to $543 million, or 36 cents per share, from $350 million, or 24 cents per share, a year earlier. Excluding charges of $96 million related to three upfront licensing payments included in research and development expenses, earnings per share would have totaled 42 cents in the latest period.
Total sales grew 17 percent to $2.98 billion from $2.55 billion in the 2006 first quarter.
On average, analysts surveyed by Thomson Financial were looking for profit of 29 cents per share per share on sales of $2.74 billion. Consensus estimates generally exclude one-time charges and gains.
Including 50 percent of sales from its global cholesterol joint venture with Merck & Co., which include the drugs Vytorin and Zetia, Schering-Plough would have posted sales of $3.6 billion, up 21 percent from the $2.9 billion adjusted sales it recorded last year.
The results gave the Kenilworth-based company its 10th consecutive quarter of double-digit adjusted sales growth, aided by double-digit growth in its top nine products.
"It is clear that our long-term strategy is working nicely," Schering-Plough chairman and CEO Fred Hassan told analysts in a conference call.
He noted that the Vytorin and Zetia franchise continued to grow "despite a new wave of generics," adding that Zetia has just been approved for use in Japan.
Hassan said the company's pipeline of products in development is growing, and mentioned the company's compound for heart trouble, thrombin receptor antagonist, which is to enter the final stage of testing this year.
Hassan also said the planned $14.4 billion acquisition of Organon Biosciences, announced last month, would be a good fit. Besides adding five compounds in the final phase of testing, Organon would diversify Schering-Plough's women's health and anesthesia products.
He again projected $500 million in synergies by the third year of the combined operation. The deal is to close by the end of the year.
Sales of Remicade increased 34 percent to $373 million, driven by continued market growth and expanded indications for its use. The anti-inflammatory drug is sold outside the United States for disorders such as rheumatoid arthritis and ulcerative colitis.
Among other prescription products posting higher sales in the 2007 first quarter was antibiotic Avelox, up 43 percent to $115 million, primarily as a result of increased market share.
Revenues from allergy drugs also gained, with Nasonex up 24 percent to $284 million, and Clarinex up 28 percent to $204 million.
Shares of Schering-Plough rose $2.34, or 8.2 percent, to $30.89 in late morning trading on the New York Stock Exchange. It has traded from $18.38 to $28.59 over the past year.
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