Schering-Plough is celebrating what its chief executive Fred Hassan describes as the continuance of “an extraordinary transformation” as the company posted a strong set of financials that were again driven by its cholesterol franchise.
Net income for the fourth quarter rose 75% to $182 million, or $0.12 per share, and the company noted that those figures include an unfavourable impact of $0.04 per share related to the streamlining its manufacturing operations and a charge of $0.01 per share related to the licensing of the over-the-counter heartburn treatment Zegerid (omeprazole/sodium bicarbonate).
Adjusted net sales were up 18.1% to $3.20 billion, which includes the contribution of Merck & Co/S-P joint venture products Zetia (ezetimibe) and Vytorin (ezetimibe and simvastatin). Total revenues from the drugs came to $1.1 billion, an increase of 45.7%, and S-P’s share was $541 million. was the headline news, with equity income from the JV coming in at $390 million from $215 million a year ago. However, and perhaps more pleasing, was the performance of other key drugs in the firm’s portfolio.
Sales of the arthritis drug Remicade (infliximab)advanced 34% to $337 million in the quarter, helped by expanded indications, while Nasonex (mometasone furoate) for allergies brought in $253 million, up 37%. Brain cancer treatment Temodar enjoyed a sales rise of 18% to $189 million, but Peg-Intron (peginterferon alfa) fell 3% to $208 million, hampered by a decline in sales for Japan.
It is all a far cry from almost four years ago, when Mr Hassan joined the company, and S-P was struggling with the loss of patent protection on its multibillion dollar allergy drug Claritin (loratadine), accounting scandals and compliance problems at its manufacturing plants. Mr Hassan introduced what he calls the Action Agenda, which involves a stringent cost-cutting programme while increasing strength and depth across product portfolios.
It is this diversity, which reduces S-P’s reliance on the cholesterol market, which is impressing analysts at the moment. In terms of pipeline, the firm does not have anything like the most impressive in the industry but Mr Hassan noted that three of the company's most visible Phase II projects have been granted fast-track designation by the US Food and Drug Administration: a novel thrombin receptor antagonist for acute coronary syndrome and secondary prevention; vicriviroc for HIV and a protease inhibitor compound for hepatitis C. The firm’s R&D spend in the fourth quarter rose 33% to $631 million.