#13 Schering-Plough

2000 Galloping Hill Rd., Kenilworth, NJ 07033
Tel: (908) 298-4000   Fax: (908) 298-7653
www.schering-plough.com

Headcount	55,000 (incl. Organon)
Year Established	1971
Pharma Revenues*	$12,273	+22%
Total Revenues*	$15,290	+22%
Net Loss	$1,473
R&D Budget	$2,926	+34%

Top Selling Drugs
Drug	Indication	Sales	(+/-%)
Zetia/Vytorin*	cholesterol	$2,593	+34%
Remicade	rheumatoid arthritis	$1,648	+33%
Nasonex	allergic rhinitis	$1,092	+16%
PEG-Intro	hepatitis C	$911	+9%
Temodar	oncology (brain)	$861	+22%
Clarinex	allergy	$799	+11%

Account for 62% of total pharma sales, up from 61% in 2006.

* Pharma revenues include $2.6 billion in Zetia and Vytorin sales. The latter derive from a joint venture with Merck and are not counted as drug revenues by SP. I have reported half of Vytorin/Zetia sales as SP revenues to give a clearer idea of SP’s pharma performance.

PROFILE

Schering-Plough completed its $14.4 billion purchase of Organon in November 2007, so we should expect the results above to jump next year. After 1Q08, pharma revenues came in at $4.1 billion, including $600 million for Zetia/Vytorin. But that’s a mighty big “including.”

The Lowe Down: Schering-Plough Schering-Plough had a horrendous year, what with all the Zetia/Vytorin problems, standing out even in a crowded field of companies who felt that they had bad years. The usual rumors about the company’s future have ensued. But this is an outfit, though, that people have been expecting to merge or get bought for at least 20 years. And since they’re still with us, I wouldn’t write them off just yet. For one thing, they have the alarmingly resourceful Fred Hassan running things, so there’s no telling what will happen. Even Vytorin might make a comeback in a couple of years if the company’s studies come out well, and there’s the problem: if they do, you’ll have to wonder what things could have been like if those studies had been run earlier, the right way. For now, though, S-P has a hepatitis C protease inhibitor in the race, and a promising thrombin drug that came completely out of left field (like Zetia did, frankly). Instead of sending the company into the first rank, though, these compounds will be keeping it alive. —Derek Lowe

Merck, SP’s partner in Zetia/Vytorin, is projecting a $700 million decline in its revenues from their joint venture, after the results of the ENHANCE trial seemed to indicate little value in mega-blockbuster Vytorin. The companies also pulled their Claritin/Singulair combo after an unfavorable response from the FDA. (See Merck’s profile for more on Vytorin.)

One of the company’s key products, Bridion (generically known as sugammadex, acquired with Organon), got priority status from FDA with its January 2008 submission. The EMEA is recommending it for post-surgical reversal of muscle relaxants, but the FDA seems to be delaying its decision, despite unanimous approval from an advisory committee.

In response to the projected drop in Zetia/Vytorin sales, SP has rolled its Organon integration plan into the Productivity Transformation Program, a strategy to generate $1.5 billion in annual savings. SP plans to achieve $1.25 billion of that by 2010. Chairman and chief executive officer Fred Hassan contended that the first part of the plan will be to cut higher management staff, as part of 5,500 (10%) overall layoffs.

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For the full profile, including pipeline and patent information, download the PDF.