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"The first full quarter since acquiring Organon BioSciences shows that ourlong-standing strategy to diversify our company is working," said Fred Hassan,chairman and CEO. "The OBS acquisition is already contributing to our resultsand adding long-term value. Our geographic expansion strategy is broadeningour base. Our company is now much stronger to deal with new challenges, suchas those facing the Merck/Schering-Plough cholesterol business in the UnitedStates."
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For the 2008 first quarter, Schering-Plough reported net income availableto common shareholders of $253 million or 15 cents per common share on a GAAPbasis. Earnings per common share for the 2008 first quarter would have been 53cents on a reconciled basis, which excludes purchase accounting adjustmentsand acquisition-related items for the OBS acquisition and other specifieditems. For the 2007 first quarter, Schering-Plough reported net incomeavailable to common shareholders of $543 million or 36 cents per common shareon a GAAP basis and 42 cents per common share on a reconciled basis.
GAAP net sales for the 2008 first quarter totaled $4.7 billion, up 56percent, as compared to the first quarter of 2007. Sales for the quarterbenefited from the inclusion of OBS net sales as well as a favorable impactfrom foreign exchange. Global cholesterol joint venture net sales, whichinclude VYTORIN and ZETIA, totaled $1.2 billion in the 2008 first quarter.Schering-Plough does not record sales of its cholesterol joint venture withMerck as the venture is accounted for under the equity method. Including anadjustment of an assumed 50 percent of the global cholesterol joint venturenet sales, Schering-Plough's adjusted sales for the 2008 first quarter wouldhave been $5.3 billion.
Reviewing results of the recent quarter, Hassan said the company recordedgood growth from many of its leading prescription, animal health and consumerproducts, with strong growth in international markets partially offset byslower sales growth in the United States. U.S. sales of VYTORIN and ZETIA, thecholesterol-lowering medicines under the Merck/Schering-Plough joint venture,were down slightly versus the 2007 first quarter while remaining strong ininternational markets. He also noted, "The tough cost-control measures we putin place in 2007 contributed to our profit performance in the recent quarter."
Regarding the outlook for Schering-Plough, Hassan said, "We are confidentabout our company's future because of the transformations we have driven inevery area. Today, we have a strong line of products protected by long periodsof market exclusivity. We have geographic and business diversity, with nearly70 percent of our GAAP net sales coming from outside the United States. Wehave a rich late-stage pipeline. We have a resilient and tested work force."Added Hassan: "Our team overcame enormous challenges in 2003 and 2004. Thosechallenges were much bigger than the ones we face today. We are determined topower through."
Hassan observed that Schering-Plough has undergone a remarkabletransformation over the past five years. Adhering to a five-phase ActionAgenda, it has become a broad-based health care company with growing strengthsacross its businesses, research capabilities and geographic markets. The OBSacquisition has provided greater diversity, new treatment areas, globalleadership in animal health and a deeper R&D pipeline.
"When we began this journey in 2003, Schering-Plough had five newmolecular entity projects or novel combination products in Phase III clinicaltrials or in registration," s
