Schering-Plough chief executive Fred Hassan said last week the company has completed its turnaround exercise and is now planning to embark on a business-building phase that could include acquisitions.
Hassan’s comments came after Schering-Plough reported double-digit sales growth and surging profits, helped in no small part by the success of the cholesterol-lowering products it sells via a joint venture with Merck & Co.
Net income at the company rose to $309 million, reversing a loss of $947 million in the third quarter of 2005, while revenues advanced 13% $2.6 billion.
In part the increased profits come as a result of swingeing cost-cutting measures designed to cut annual costs by $100 million a year from next year, but improvements were seen across many elements of the business.
63% growth in turnover for the Merck/Schering-Plough joint venture products Zetia (ezetimibe) and Vytorin (ezetimibe and simvastatin) to more than $1 billion was the headline news, with equity income from the JV coming in at $390 million from $215 million a year ago.
Meanwhile, arthritis drug Remicade (infliximab), Nasonex (mometasone furoate monohydrate) for allergies and brain cancer drug Temodar (temozolomide) also played their parts.
Sales of Remicade advanced 34% to $317 million in the quarter, while Nasonex brought in $221 million, up 30%, and Temodar advanced 18% to $179 million. Peg-Intron (peginterferon alfa) had a fair quarter, rising 11% to $206 million, although it showed some signs of slowing down after an upsurge in recent quarters which followed its approval in Japan.
"Three years ago, this company was facing severe challenges," said Hassan. "Today, we are achieving solid growth across a broad front.”
S-P was in dire straits back in 2003 when Fred Hassan took up the post of CEO. Back then S-P was struggling with the loss of patent protection on its top drug, accounting scandals and compliance issues with its manufacturing plants, but has steadily returned to form on the back of a stringent cost-cutting programme and a revitalisation of its product portfolio.