Schering-Plough Reports Financial Results for 2009 First Quarter
4/21/2009 6:20:00 AM
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Transformed Company Delivers Solid Financial Performance,
Continues to Advance Industry-Leading Late-Stage Pipeline
KENILWORTH, N.J., April 21 /PRNewswire-FirstCall/ -- Schering-Plough Corporation (NYSE: SGP) today reported financial results for the 2009 first quarter.
"Schering-Plough powered through to deliver a solid performance in the first quarter," said Fred Hassan, chairman and CEO. "We overcame difficult currency comparisons and challenges in the U.S. by driving operational sales growth in overseas markets and the continuing successful implementation of our Productivity Transformation Program.
"The people of Schering-Plough can take pride in executing a remarkable transformation of this company over the past six years of our Action Agenda, including the successful acquisition of Organon BioSciences," said Hassan. "They triumphed over the huge challenges we faced in '03 and '04, and then again in '08."
Looking ahead to the company's planned merger with Merck announced on March 9, Hassan said, "We remain focused on driving our business. We will continue to implement our basic strategy: Grow the top line, grow the pipeline, reduce costs and invest wisely."
For the 2009 first quarter, Schering-Plough reported net income available to common shareholders of $767 million or 46 cents per common share on a GAAP basis. Earnings per common share for the 2009 first quarter would have been 56 cents on earnings of $936 million on a reconciled basis, which excludes purchase accounting adjustments related to the OBS acquisition and special, merger and acquisition-related items. For the 2008 first quarter, Schering-Plough reported net income available to common shareholders of $276 million or 17 cents per common share on a GAAP basis and earnings of 53 cents per common share on a reconciled basis.
GAAP net sales for the 2009 first quarter totaled $4.4 billion, down 6 percent as compared to the first quarter of 2008, reflecting 4 percent operational growth and an unfavorable impact from foreign exchange of 10 percent. Net sales of the global cholesterol joint venture, which include VYTORIN and ZETIA, totaled $931 million in the 2009 first quarter. Schering-Plough does not record sales of its cholesterol joint venture with Merck as the venture is accounted for under the equity method. Including an adjustment of an assumed 50 percent of the global cholesterol joint venture net sales, Schering-Plough's adjusted net sales for the 2009 first quarter would have been $4.9 billion.
"We are gratified that we were able to drive both operational sales growth and reconciled earnings growth, in the midst of a severe global recession," said Hassan. "And at a time when regulatory approvals for new chemical entities are scarce, we achieved the first major market approval of SIMPONI (golimumab) - one of our 'Five Stars' - in Canada earlier this month. These accomplishments show the strength of our strategies, and the strength of our execution."
Schering-Plough's operations are becoming more efficient and cost-effective through the company's Productivity Transformation Program (PTP), launched in April 2008. PTP is expected to realize annualized savings of $1.5 billion by the end of 2012. The company is on track to achieve this savings target.
Schering-Plough's transformation over the past six years is evidenced by the following achievements:
Building an industry-leading product pipeline, with six projects designated "fast track" by the U.S. Food and Drug Administration and 12 new entities in late-stage development, including eight in Phase III and four in pre-registration;
Achieving greater geographic and product diversity, by expanding into newer markets, adding new therapeutic areas, creating a leading global animal health business, and growing the consumer business through successful Rx-to-OTC switches;
Increasing the number of marketed products with sales above $1 billion from none in 2003 to five in 2008 (REMICADE, NASONEX and TEMODAR - as well as VYTORIN and ZETIA in the cholesterol joint venture);
Adding more than $12 billion to adjusted net sales, from $8.6 billion in 2003 to $20.8 billion in 2008;
Strengthening the company's financial position, going from negative free cash flow of nearly $1 billion in 2003 to generating positive free cash flow of more than $2 billion in 2008;
Successfully seeking, negotiating and integrating important and value-creating transactions, such as the acquisition of Organon BioSciences (OBS).
First Quarter 2009 Results