Thursday June 24, 12:55 pm Eastern Time
Company Press Release
SOURCE: Schering-Plough Corporation
Schering-Plough Offers Earnings Forecast for 1999 Second Quarter and Full Year, Reviews Business and Research Progress
NEW YORK, June 24 /PRNewswire/ -- Speaking before more than 250 analysts and portfolio managers, Richard Jay Kogan, chairman and chief executive officer of Schering-Plough Corporation (NYSE: SGP - news), today provided an earnings forecast for the 1999 second quarter and full year, and reviewed the company's pharmaceutical businesses and highlights of its research programs.
''The 1999 second quarter is on track and looking fine,'' said Kogan. ''With just a few days to go before the quarter closes, I can say that, based on results to date, we expect to earn at least 36 cents per share.
''For the full year,'' he continued, ''we expect the increase in Schering-Plough's 1999 earnings per share to approach 20 percent, which would give us our 14th consecutive year of double-digit growth in earnings per share.''
Highlighting the company's performance, Kogan said, ''The fundamentals at Schering-Plough are good. We are one of the industry's most consistent performers; we are in good shape; our pipeline is strong; and our prospects for future growth are excellent.''
Schering-Plough remains ''ever mindful'' of its shareholders, he said, pointing out that the company has:
Increased the dividend 16 times since 1986;
Completed five 2-for-1 stock splits since 1987;
Completed nine share repurchase programs since 1983 and initiated a
10th; and
Delivered 13 consecutive years of double-digit growth in earnings per share.
Schering-Plough's ongoing $1 billion share buyback program, begun in January 1998, is about 57 percent completed, he added. ''I know that investors look favorably on companies buying back their shares,'' continued Kogan. ''Assuming that is still the case when the current program is completed, I would expect to go back to our Board of Directors and seek authorization for yet another share repurchase program.''
Describing Schering-Plough as a ''truly global pharmaceutical company,'' Kogan said that Schering-Plough has steadily expanded its worldwide pharmaceutical sales force, hiring about 3,000 more representatives in the past three years to bring the total to more than 10,000. The U.S. sales force stands at 4,300; internationally, Schering-Plough has added 1,000 more sales representatives in the last year to support expected new product launches and capture greater market share.
Reviewing domestic and international sales, Kogan said that Schering-Plough has been achieving good growth in nearly all major markets. While the company's domestic sales have been growing well, he pointed out that ''now international sales also are picking up steam, thanks to good results from in-line products and new product introductions.''
Leading Schering-Plough sales continues to be CLARITIN®(loratadine), the world's No. 1 antihistamine and the company's largest-selling product. With its five formulations, the CLARITIN line generated sales of $2.3 billion in 1998 and ''is on track for a strong performance this year.'' During the 1999 spring allergy season, the CLARITIN line held a 53 percent share of total U.S. prescriptions. ''CLARITIN is important to Schering-Plough,'' he said, ''and we are doing what it takes to keep it competitive and make it even more successful.'' He noted that the company is developing a metabolite of loratadine, desloratadine or DCL, which is in Phase III trials for seasonal allergic rhinitis and chronic urticaria.
Kogan discussed other product developments in the allergy/respiratory therapy area, including NASONEX® (mometasone furoate monohydrate), a potent, once-daily nasal spray for seasonal and perennial rhinitis. ''Importantly, NASONEX gives us entry to major international markets, because it's the first time we have had a nasal steroid to sell on a worldwide basis,'' he said. The product has been launched in more than 30 countries, including the United States.
He also provided an update on an orally inhaled form of mometasone furoate monohydrate (to be known as ASMANEX® in most countries) for the treatment of asthma. A U.S. regulatory application was filed last November for a dry-powder inhaler version. Internationally, a European Union application was filed in March in the United Kingdom. Phase III studies are continuing on a CFC-free metered dose inhaler. ''We expect ASMANEX will be an important addition, our first asthma product ever sold on a worldwide basis, competing in a global market projected to reach $3 billion,'' said Kogan. Pointing to CLARITIN, NASONEX and ASMANEX, he said these would ''form the core of our global allergy/respiratory franchise.''
In the anti-infective/anticancer group, Kogan reviewed positive developments for INTRON® A (interferon alfa-2b, recombinant), the world's leading alpha interferon, and REBETRON(TM) Combination Therapy, containing REBETOL® (ribavirin) Capsules and INTRON A Injection. Combined sales in 1998 totaled $719 million. He noted that REBETRON gained U.S. approvals last year for hepatitis C patients who had relapsed after interferon therapy and for nanve patients, or those not previously treated. In May 1999, the combination therapy gained European Union marketing approval for treating both relapsed and nanve hepatitis C patients.
''REBETRON represents a major advance in treating hepatitis C, a disease that is both serious and widespread,'' said Kogan. Some 10 million people in the major developed world markets are affected, including 4 million Americans, 5 million in Europe and 1 million in Japan. He said less than 10 percent of these hepatitis C patients are estimated to have undergone any treatment, ''so a lot of opportunity remains.''
He reported on PEG-INTRON, a long-acting Pegylated form of INTRON A, being developed to treat hepatitis C and various cancers. PEG-INTRON is expected to cut hepatitis C dosing from three times to once a week, he said. Phase III trials for hepatitis C are studying PEG-INTRON alone and in combination with REBETOL.
Underlying Schering-Plough's success has been the company's commitment to research and development, said Kogan. ''Last year, we invested $1 billion on R&D and this year we expect to increase that by more than 15 percent.'' Schering-Plough's previously stated estimate for 1999 R&D spending was for an increase of ''about 15 percent.''
Examining research developments over the past three years, Kogan noted that Schering-Plough has moved 11 new compounds into clinical trials, acquired Canji as its center for gene therapy discovery, and entered into 34 research and product licensing agreements.
Kogan reviewed leading compounds in the company's product pipeline, which are being developed to treat such diseases as asthma, allergies, hepatitis C, drug-resistant bacterial infections, various cancers, high cholesterol, inflammatory bowel disease and rheumatoid arthritis. In oncology, he discussed TEMODAL® (temozolomide), approved in the European Union for treating a type of brain tumor and with U.S. applications pending; CAELYX(TM) (doxorubicin HCl [pegylated liposomal]), in Phase III for breast and ovarian cancers; a farnesyl protein transferase (FPT) inhibitor, in Phase II for various solid tumors; and p53 gene therapy, in Phase II trials for a variety of solid tumors. Also reviewed were REMICADE(TM) (infliximab), which has been recommended for European Union approval for Crohn's disease and is in Phase III for rheumatoid arthritis; TENOVIL® (interleukin-10), in Phase III for Crohn's disease and rheumatoid arthritis; a cholesterol absorption inhibitor, in Phase II as a lipid-lowering agent; and anti-interleukin-5, in Early Phase trials for asthma.
He also reviewed the company's animal health business, which now ranks as the world's fifth largest after the 1997 acquisition of Mallinckrodt's animal health unit. Animal health sales in 1998 totaled $647 million.
In its consumer health businesses, Kogan noted the introduction of new products in the DR. SCHOLL'S® foot care line, the COPPERTONE® sun care line and AFRIN® nasal decongestant lines in its over-the-counter products category.
''Looking back, I'm proud of what we have achieved in the three years I've been CEO,'' said Kogan. ''There is still much to look forward to. We expect to receive marketing approvals in the not-too-distant future for other important new products and indications, including ASMANEX dry-powder inhaler for asthma, NASONEX for pediatric rhinitis, TEMODAL for a type of brain tumor, SUBUTEX® for opiate addiction in additional markets, and REMICADE for Crohn's. We expect to submit regulatory applications for PEG-INTRON for hepatitis C; desloratadine, or DCL, for seasonal allergic rhinitis; and, in Europe, CAELYX for breast and ovarian cancers, and REMICADE for rheumatoid arthritis.''
After projecting 1999 to be the company's 14th consecutive year of double-digit growth in earnings per share, Kogan concluded his talk, saying, ''And that is a consistent story. Our businesses are performing well; we are spending to promote our products; we are adding to our sales forces; we are increasing R&D; and we are going to deliver good numbers.''
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