Schering-Plough has posted a $3.36 billion, or $2.08 per share, net loss for the fourth quarter but the company’s results were dominated by the controversy surrounding the cholesterol drug Vytorin.

The firm’s loss compared to net income of $182 million in the like, year-earlier period, though the figures for fourth-quarter 2007 mostly relate to charges connected to its recently-completed 11 billion euro acquisition of Organon Biosciences from Akzo Nobel. Excluding those items, earnings per share would have been $0.27, ahead of analyst forecasts.

Group sales soared 41% to $3.72 billion, and pharmaceuticals were up 34% to $2.96 billion. The anti-inflammatory Remicade (infliximab), the Johnson & Johnson drug which S-P sells outside the USA, rose 35% to $455 million, while the anti-allergy medication Nasonex jumped 7% to $271 million. Sales of the brain cancer drug Temodar (temozolomide) increased 23% to $234 million and the hepatitis C drug PegIntron (pegylated interferon) rose 15% to $239 million. Revenues for the non-sedating antihistamine Clarinex (desloratadine) edged up 6% to $174 million.

However all eyes were on the performance of the cholesterol drugs Vytorin (ezetimibe and simvastatin) and Zetia (ezetimibe), sold through a joint venture with Merck & Co, and combined sales of the drugs jumped 34% to $1.46 billion. S-P does not record sales from the JV but said that assuming it gets half of the revenues from the Merck link-up, adjusted sales for the quarter would have risen 39% to $4.4 billion.

However, most of the questions about Vytorin did not focus on its sales growth. The drug has been at the centre of a storm ever since data from the Enhance trial showed that Vytorin failed to yield any benefits over simvastatin in reducing arterial plaque. Congress and attorney-generals are investigating the case as to why the results were delayed for almost two years and why its primary endpoint was temporarily changed.

Acting with integrity and good faith
Fingers are being pointed at S-P and Merck’s handling of the data and the former’s chief executive Fred Hassan came out fighting in defence of his firm. He said that S-P and 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 added that the pharmaceutical industry “continues to be subject to ever-more critical scrutiny, where events can be mischaracterised and drive amplified reactions”. Mr Hassan echoed this sentiment in a conference call and said it is important that all the data from Enhance “be assessed by the scientific community in an appropriate and open medical forum”. As for the other issues, he said that “tough actions” would be taken “if tough actions are needed”, but did not specify what that would be.

Nevertheless it seemed that investors were prepared to put the problems of Vytorin behind them for the timebeing and S-P shares ended the day up 5.9% at $21.83.