Schering-Plough Annual Meeting Reviews Progress in Resolving Manufacturing Issues, Highlights New Products, Strong Research Pipeline
April 23, 2002 3:39:00 PM ET
ISELIN, N.J., April 23 /PRNewswire-FirstCall/ -- Richard Jay Kogan, chairman and chief executive officer of Schering-Plough Corporation SGP, told shareholders at the company's annual meeting here today that Schering-Plough has accomplished a great deal on several fronts during the past year: addressing manufacturing and compliance issues, launching significant new products in U.S. and international markets, and advancing potential new therapies in its research pipeline.
"Schering-Plough is a strong, capable company. We have smart and dedicated people who share a commitment to the physicians and patients who depend on our products for their health and well-being. Working together, we are building a better, more efficient and more competitive Schering-Plough," Kogan told shareholders. "I firmly believe that we are overcoming the challenges of the recent past and setting the right course for success in the years ahead."
Reporting on efforts to resolve manufacturing issues at the company's New Jersey and Puerto Rico facilities, Kogan said, "Schering-Plough has made and is making a number of important changes, including major facility and process improvements, and new management teams," Kogan said. "Every day, our manufacturing and quality teams demonstrate an enthusiastic, 'can-do' attitude that inspires their colleagues and gives me great confidence in our ability to achieve our immediate and long-term goals."
Kogan highlighted the December 2001 U.S. approval of CLARINEX(R) (desloratadine) Tablets, the only nonsedating antihistamine approved in the United States for both indoor and outdoor allergies, including chronic idiopathic urticaria (CIU) or chronic hives of unknown cause. "We are now into the spring allergy season, and I'm pleased to say that CLARINEX has gained a 15.6 percent market share of new prescriptions in the United States."
Kogan also noted that the company has applied to U.S. Food and Drug Administration (FDA) to market its nonsedating antihistamine CLARITIN(R) (loratadine) as an over-the-counter (OTC) product. An FDA advisory committee yesterday recommended that CLARITIN can be used as an OTC product to treat CIU. The company is seeking approval to market CLARITIN as an OTC product for all the medical indications it is now approved for as a prescription product. "Our goal for Schering-Plough's allergy franchise is to achieve brand leadership in both the prescription and OTC allergy-treatment categories -- with the ongoing roll-out of CLARINEX and, when approved, the OTC introduction of CLARITIN," Kogan said.
Kogan also reiterated his previous earnings projection for 2002. "For 2002, we expect to achieve a percentage increase in earnings per share in the low double-digits," he said. The 2002 earnings estimate is compared to 2001 earnings before any provision for a consent decree payment. Schering-Plough has previously reported that it is in negotiations with FDA on an agreement for a consent decree and remains optimistic about reaching an agreement that will resolve these matters to the satisfaction of FDA and the company. The 2002 earnings estimate remains subject to a number of factors, including the success of the U.S. launch of CLARINEX; prescription CLARITIN trade inventory elimination; the possible impact on product shipments as the company continues to implement enhancements to manufacturing operations; the timing and impact of a consent decree; and other business and market factors, including those noted below under the Disclosure Notice.
Kogan today also reported to shareholders that the company's Board of Directors had authorized a 6 percent increase in the quarterly dividend, from 16 cents to 17 cents per share, marking the 19th increase in the dividend since 1986. Kogan said the Board's action "reflects our confidence in the financial strength of the company and our commitment to reward shareholders."
In reviewing the company's 2001 performance, Kogan said that while U.S. sales have been affected by manufacturing issues and generic competition, the company is seeing impressive growth in international markets. "In Europe/Canada, Schering-Plough in 2001 was the fastest growing of the top 20 major pharmaceutical companies, growing 11 percent faster than the market as a whole," Kogan said. "Each of the past 10 quarters has seen our rate of growth increase faster than the market," he continued.
Kogan highlighted some of the potential therapies Schering-Plough has in its product pipeline, reminding shareholders that the company has invested more than $1 billion in R&D in each of the past four years. R&D spending totaled $1.3 billion in 2001 and will increase this year, he noted.
Foremost among the company's pipeline candidates is ZETIA(TM) (ezetimibe), a novel cholesterol absorption inhibitor discovered by Schering-Plough scientists that forms the basis of the company's worldwide cholesterol management partnership with Merck & Co., Inc. The U.S. marketing application for ZETIA was filed in December 2001 and is targeted for FDA action before year-end.
Commenting on the significant role that ZETIA may play in treating high cholesterol, Kogan noted that multiple studies have shown that many patients on statins -- products that lower cholesterol by inhibiting its production in the liver -- fail to get their cholesterol down to levels recommended by their physicians. "Patients who fail to 'get to goal' are often treated with increasingly higher doses of statins," Kogan said, which can be associated with side effects, especially at higher doses.
ZETIA, on the other hand, works by inhibiting the absorption of dietary cholesterol. Kogan noted that a study of patients already on a statin, but not at goal, demonstrated that adding ZETIA helped 72 percent of these patients reach their desired cholesterol level.
"For Schering-Plough, ZETIA represents a tremendous opportunity," Kogan told shareholders. "The market for cholesterol-management products -- now at $18 billion and heading toward $30 billion -- is one of the largest and fastest-growing in the world. And we believe that ZETIA, used with a statin and as a combination tablet with Merck's Zocor(R), is going to be one of the world's major cholesterol-management products."
Kogan also highlighted ASMANEX(R), a next-generation inhaled steroid for asthma also in the company's late-stage pipeline. ASMANEX is expected to offer high potency and a good safety profile. It would be Schering-Plough's first product in this therapeutic class to be marketed on a worldwide basis.
In late-stage clinical trials is NOXAFIL(R), an oral, broad-spectrum antifungal for serious opportunistic infections, such as those occurring in cancer and HIV patients. An intravenous formulation is also being developed. "Globally, there is an unmet medical need for safe and effective management of severe invasive fungal infections," Kogan said.
Earlier in the pipeline are several promising compounds discovered by Schering-Plough scientists. Among these is SARASAR(TM), an FPT inhibitor. "This product takes a novel approach to treating cancer by inhibiting a protein found in the body that appears to activate many types of cancer," Kogan said. SARASAR as an oral therapy is in Phase II development for non-small-cell lung cancer as well as a variety of difficult-to-treat solid tumors and leukemia.
"Our CCR5 receptor antagonist is an oral agent in early development for HIV infection," Kogan told the audience. "This compound offers a novel approach to treating the disease." Current HIV drugs work inside the cell to inhibit the replication cycle of the AIDS virus. CCR5 receptor antagonists work by blocking HIV before the virus enters the cell and begins to replicate. "Our CCR5 receptor antagonist is the farthest along of any in development, and early clinical results have shown a direct antiviral effect in patients infected with the HIV virus," Kogan said.
"For many years, Schering-Plough has achieved success and our shareholders have prospered because we have remained committed to a philosophy of growth through research. That will not change," Kogan affirmed. "Our scientists are striving to develop important new medicines, and our marketing and sales teams are working to grow our revenues so we can continue the research investment cycle."
In other business at the annual meeting, shareholders elected Hans W. Becherer, Regina E. Herzlinger, Kathryn C. Turner and Robert F. W. van Oordt for three-year terms on the Board of Directors. Shareholders also ratified the designation of Deloitte & Touche LLP as auditors for 2002, and approved the 2002 Stock Incentive Plan. A shareholder proposal concerning pharmaceutical pricing was not adopted.
DISCLOSURE NOTICE: In addition to historical information, this press release includes certain "forward-looking" statements relating to the company's projected earnings for 2002, the company's business prospects, and the possibility that the manufacturing process and control and current Good Manufacturing Practices (GMP) issues identified by the FDA may be resolved by a negotiated consent decree between the company and the FDA. The reader of this release should understand that the resolution of the issues with the FDA, the ability of the company to achieve the projected earnings and the market viability of the company's currently marketed and pipeline products are subject to substantial risks and uncertainties and actual results could differ materially from the company's forward-looking statements. Further, there are no assurances that new drug applications or foreign equivalents for the pipeline products will be filed with the FDA or its foreign counterparts, or if such applications are filed, that they will be approved. Many factors could cause the resolution of the GMP issues through a consent decree and actual financial results to differ materially from the company's forward-looking statements, including that the timing, scope and duration of a resolution of the manufacturing process and control and GMP issues will depend on the ability of the company to assure the FDA of the quality and reliability of its manufacturing systems and controls, and, in addition to the factors described above in this release, whether and to what extent the company experiences any disruptions of its major products or manufacturing facilities. The reader of this release should also understand that the failure to reach resolution of the GMP issues through a consent decree or otherwise could result in delays in approval of new products, seizure or recall of products, suspension or revocation of the authority necessary for the production and sale of products, fines and other civil or criminal sanctions. In addition to the risks and uncertainties relating to the company's regulatory and compliance difficulties, the forward-looking statements may also be adversely affected by general market factors, competitive product development, product availability, the extent of market acceptance of new products, the potential shift of prescription products to OTC status, current and future branded, generic or OTC competition, federal and state regulations and legislation, the regulatory process for new products and indications, existing and new manufacturing issues that may arise, trade buying patterns, exchange rate fluctuations, patent positions, litigation and investigations. In particular, actual results could vary materially from the company's forward-looking statements if generic loratadine were introduced, the potential introduction of OTC CLARITIN changed, or if trade inventory reductions or elimination were different than the company expected. For further details and a discussion of these and other risks and uncertainties, see the company's Securities and Exchange Commission filings, including the company's 2001 annual report on Form 10-K.
Schering-Plough Corporation is a research-based company engaged in the discovery, development, manufacturing and marketing of pharmaceutical products worldwide. |
