Schering-Plough is making “good progress” in complying with the US Food and Drug Administration’s consent decree, chief executive, Fred Hassan, told investors at a Morgan Stanley conference yesterday.
S-P agreed to the decree back in May 2002, when it said it would pay a $500 million dollar fine to settle an FDA probe of its manufacturing facilities [[20/05/02b]]. As a result, the company was forced to lower its earnings projections because of the impact on the shipment of products to the US market and higher associated production costs.
Mr Hassan explained that the firm would have the majority of the work relating to the decree completed by the end of 2005, but noted that it would not be rescinded until May 2007 at the earliest. He added that no other firm has had to deal with a decree of such magnitude and complexity, and that S-P has hired hundreds of people and spent millions of dollars in improving its operations and installing up-to-date systems.
In addition, the company says that its action plan remains on track, and it continues to expect its turnaround to begin in earning this year [[19/11/03a]]. Mr Hassan said that investors should keep their eyes on the firm’s the anti-inflammatory drug Remicade (infliximab) and the brain tumour treatment, Temodar (temozolomide), but declined to provide a forecast for future earnings, saying that its performance remains highly dependent on fluctuations in key markets, such as allergy. “We will give guidance as soon as we are able to get a handle on the dimensions affecting the bottom line,” he explained.