Company Records Strong Performance in 2007 and Notes Achievements over 4-year Period, Progressing with Integration of Organon BioSciences, Preparing for Challenges of 2008
KENILWORTH, N.J., Feb 12, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Schering-Plough Corporation (NYSE: SGP) today reported financial results for the 2007 fourth quarter and full year, and commented on its ongoing integration of Organon BioSciences N.V. (OBS), which was acquired in November 2007 and includes the Organon human health business and Intervet animal health business.
"Schering-Plough delivered another strong performance in both the fourth quarter and full year of 2007," said Fred Hassan, chairman and CEO. "We continued the remarkable transformation that began in 2003. On track with our Action Agenda, we grew the top line, built greater diversity in our business portfolio, improved our financial strength and cash flows, and established R&D as an engine for future growth. Our acquisition of Organon BioSciences was a substantial strategic achievement. Today, we are a much stronger and more diverse company than ever before, and we are better positioned to deal with the new challenges confronting us in 2008."
For the 2007 fourth quarter on a GAAP basis, due to purchase accounting adjustments, Schering-Plough reported a net loss available to common shareholders of $3.4 billion or $2.08 per common share. Earnings per common share for the 2007 fourth quarter would have been 27 cents, excluding purchase accounting adjustments and acquisition-related items for the OBS acquisition (closed Nov. 19, 2007) and other specified items (see table below on page 13). For the 2006 fourth quarter, Schering-Plough reported net income of $182 million or 12 cents per common share on a GAAP basis and 17 cents per common share when excluding other specified items.
GAAP net sales for the 2007 fourth quarter totaled $3.7 billion as compared to $2.7 billion in the fourth quarter of 2006. Adjusted net sales (GAAP net sales plus an assumed 50 percent of global cholesterol joint venture net sales - see table below on page 19 and hereinafter referred to as "adjusted sales") would have totaled $4.4 billion. Schering-Plough does not record sales of its cholesterol joint venture with Merck & Co., Inc. (Merck), as the venture is accounted for under the equity method.
The 2007 full year was significant for many important achievements:
-- Completing the acquisition of Organon BioSciences N.V. for
approximately 11 billion euro, thus adding new categories - women's
health and anesthesia/psychiatry - and making Schering-Plough one of
the world's leading animal health companies;
-- Growing cholesterol franchise sales to $5.2 billion in 2007, with U.S.
sales up 26 percent and international sales up 70 percent;
-- Growing sales by double digits in each major customer segment -
Prescription Pharmaceuticals, Consumer Health Care and Animal Health;
-- Gaining strength in global markets, with sales in international markets
representing more than 60 percent of total GAAP net sales;
-- Continuing to expand the company's businesses with new products and
indications while extending its presence in fast-growing emerging
markets, such as China, Brazil and Russia;
-- Strengthening the research pipeline with new compounds and by advancing
development to Phase III of such agents as a thrombin receptor
antagonist (TRA) for atherothrombosis and vicriviroc for HIV; both are
among the company's four compounds designated "fast track" by the U.S.
Food and Drug Administration (FDA); and
-- Filing regulatory submissions for important new agents and indications,
which now include sugammadex and asenapine from Organon.
"Schering-Plough now has four full years of accomplishments since we began this transformation," said Hassan. "In that time, we also brought a new culture to the company - focused on meeting the needs of our customers and patients, and founded on a commitment to quality, compliance and business integrity."
Hassan continued: "As we begin 2008, new challenges have emerged, especially the initial reaction to the ENHANCE trial. We and our joint venture partner Merck acted with integrity and good faith with respect to that trial. We stand behind VYTORIN and ZETIA, behind the validity of the science, and behind our commitment to doing what's right for patients and physicians."
The company noted that the pharmaceutical industry continues to be subject to ever-more critical scrutiny, where events can be mischaracterized and drive amplified reactions. The company believes that new scientific data are best presented and discussed at appropriate scientific and medical forums.
Medical experts and health advisory groups have long recognized high LDL cholesterol as a significant cardiovascular risk factor and recommended increasingly aggressive treatment of high cholesterol for certain patients. While it is too early to tell the impact of the ENHANCE trial results on the cholesterol business, lowering LDL cholesterol, along with healthy diet and lifestyle changes, remains the cornerstone of lipid treatment for patients at risk for heart disease. Clinical studies have demonstrated that VYTORIN lowered patients' LDL cholesterol more than rosuvastatin, atorvastatin and simvastatin at the doses studied and was able to get more patients to their goal.
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