Guest guest Posted July 26, 2006 Report Share Posted July 26, 2006 Schering-Plough beats profit forecast By Ransdell Pierson Mon Jul 24, 9:31 AM ET NEW YORK (Reuters) - Schering-Plough Corp. (NYSE:SGP - news) on Monday reported quarterly earnings far higher than Wall Street expected on demand for its drugs against cholesterol, arthritis, allergies and hepatitis C, lifting shares by almost 4 percent. The company earned $237 million, or 16 cents per share. That compared with a loss of $70 million, or 5 cents per share, in the 2005 period -- when the Kenilworth, New Jersey-based drugmaker took charges for legal reserves for government probes. Excluding special items, the drugmaker earned 25 cents per share. Analysts, on average, expected 17 cents per share, according to Reuters Estimates. Global sales, which officially do not include cholesterol drugs Zetia and Vytorin co-marketed under a joint venture with Merck & Co. (NYSE:MRK - news), rose 11 percent to $2.8 billion. That handily topped analyst sales forecasts of $2.63 billion. Including its 50 percent share of revenue from the cholesterol treatments, Schering-Plough sales jumped 18 percent to $3.3 billion. Sales of the treatments were helped by stepped up purchases among wholesalers. Schering-Plough Chief Executive Officer Fred Hassan said sales of Vytorin -- which can lower "bad" LDL cholesterol by more than 60 percent -- are surging as government guidelines increasingly aim for lower LDL levels in order to prevent heart attacks and strokes. "Vytorin is helping to get LDL lower than Crestor and Lipitor," Hassan told analysts in a conference call, referring, respectively, to potent rival cholesterol drugs sold by AstraZeneca Plc (AZN.L) and Pfizer Inc. (NYSE:PFE - news). Sales of Remicade, a treatment for arthritis and Crohn's disease which Schering-Plough sells outside the United States, rose 31 percent to $307 million. The company's inhaled allergy drug Nasonex saw sales rise 21 percent to $242 million -- putting it on track to become a blockbuster drug after an enhanced marketing push by Hassan. Revenue from Peg-Intron, an injectable drug for patients infected with the liver-damaging hepatitis C virus, rose 25 percent to $226 million. Its growth was driven by widening use in Japan, although the company cautioned the sales in the second half of the year will subside as new patient enrollment there moderates. Schering-Plough officials said they expect combined sales of Zetia and Vytorin to continue growing in the second half of 2006, despite competition from cheaper generic forms of Merck's older Zocor treatment. Generic Zocor became available after Zocor's U.S. patent lapsed late last month. Many insurers have aggressively tried to switch patients to generic Zocor -- including Merck's own authorized generic form of Zocor that is cheaper than its branded form of the medicine. "The driver of (earnings growth) for Schering-Plough will be sales of Vytorin and Zetia and hence, the primary risk of the shares is a flattening out or decline in Vytorin prescriptions following the launch of generic Zocor," Deutsche Bank analyst Barbara said on Monday. Schering-Plough stock rose to $20.20 on the Inet electronic brokerage system, up from a Friday close of $19.45 on the New York Stock Exchange. Its shares have fallen 3.1 percent so far this year, compared with a gain of 4.5 percent for the American Stock Exchange Pharmaceutical Index of large U.S. and European drugmakers. Merck shares, meanwhile, were up 2.8 percent in pre-market trading, lifted by its own better-than expected quarterly earnings. (Additional reporting by Krauskopf and Tobin) http://news./s/nm/20060724/bs_nm/scheringplough_earns_dc_4 Quote Link to comment Share on other sites More sharing options...
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