Schering-Plough Reports Financial Results for Third Quarter of 2007
"Schering-Plough has now recorded its 12th consecutive quarter of double-digit adjusted sales growth," said Fred Hassan, chairman and CEO. "Schering-Plough's long-term strategy continues to unfold. Our strategy to grow the topline, exercise financial discipline and expand our R&D pipeline againdelivered strong results."
Added Hassan: "Our focus on building R&D excellence is beginning to bearfruit. With the upcoming acquisition of Organon BioSciences, we will have atotal of 12 significant projects in Phase III -- we will have a pipeline witha Phase III bulge. This, combined with relatively long exclusivity of ourmarketed product portfolio, puts Schering-Plough in a substantially strongerposition in terms of its late-stage pipeline and portfolio than only fouryears ago," said Hassan.
For the 2007 third quarter, Schering-Plough reported net income availableto common shareholders of $713 million or 45 cents per common share on a GAAPbasis. Excluding acquisition-related items and an upfront R&D payment,earnings per share for the 2007 third quarter would have been 28 cents (seetable below on page 13). For the 2006 third quarter, Schering-Plough reportednet income of $287 million or 19 cents per common share on a GAAP basis.
Net sales for the 2007 third quarter rose 9 percent on a GAAP basis and 12percent on an adjusted basis versus the 2006 period. GAAP net sales for the2007 third quarter totaled $2.8 billion; adjusted net sales, which includes anassumed 50 percent of global cholesterol joint venture net sales (see tablebelow on page 12 and hereinafter referred to as "adjusted sales") for the 2007third quarter would have totaled $3.5 billion compared to $3.1 billion on asimilar adjusted basis in the 2006 third quarter. Schering-Plough does notrecord sales of its cholesterol joint venture with Merck & Co., Inc. (Merck),as the venture is accounted for under the equity method.
Hassan noted that Schering-Plough's expanding Phase III pipeline shouldprovide important future strength. Schering-Plough recently advanced twocompounds into Phase III trials -- vicriviroc for HIV and a thrombin receptorantagonist (TRA) for atherothrombosis; both have been granted "fast track"designation by the U.S. Food and Drug Administration (FDA). The number ofpatients in clinical trials in 2007 has increased substantially versus 2006,and is expected to increase again next year. This level of expanded R&D isunequaled in the company's history.
As Schering-Plough advances in the Build the Base phase of its six- toeight-year Action Agenda, it has continued to resolve issues from the past --most recently, the dissolution in August 2007 of the FDA consent decree, firstentered into in May 2002, by the U.S. District Court for the District of NewJersey (Newark).
"This was an unprecedented and heroic achievement by our people," saidHassan. "We are a company that stands out for injecting quality, complianceand business integrity into our DNA."
Organon BioSciences Update
Since the March 12 announcement, Schering-Plough has made significantprogress toward completing the acquisition of OBS from Akzo Nobel N.V. Thisincludes gaining European Commission approval for the acquisition andcompleting most of its financing plan by securing nearly $9 billion infinancing through a mix of equity and debt of varying maturities (3-30 years).The company has completed a customary consultative process with the OBS WorksCouncil in the Netherlands in a positive manner, which will facilitate thetransaction with Akzo Nobel.
"The acquisition of Organon
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