Schering-Plough sees Q2 slightly above view
Wednesday July 8, 3:28 pm Eastern Time
NEW YORK, July 8 (Reuters) - Drug maker Schering-Plough Corp. (SGP - news) said Wednesday it expects to report diluted earnings per share for the second quarter of $0.61, a 22 percent rise from last year's $0.50 figure and a penny ahead of the latest consensus view among Wall Street analysts.
In a statement, company president and chief executive Jay Kogan described the period ended June 30 as ''particularly strong'' and repeated earlier projections that the company's EPS growth for the year would be in the 20 percent range.
Kogan gave the earnings guidance in a luncheon meeting here with Wall Street analysts, adding that complete second quarter numbers would not be available until the company reported full results on July 21.
He said the Madison, N.J., company plans to boost its 1998 research and development spending to over $1 billion from $847 million in 1997.
Kogan added Schering-Plough expects to move four new compounds into development from internal drug discovery programs in the next 12 months and hoped to increase the rate in the future.
''Schering-Plough's biggest growth driver is Claritin, the world's No. 1 antihistamine,'' said Kogan, adding the company's flagship product was ''on track for a strong performance this year.'' Claritin
(loratadine) had worldwide sales of $1.7 billion in 1997.
Shares were unchanged at 97-5/8 in afternoon trade, almost double the closing price of 50 seen a year ago. For the year to date alone, the price has soared 57 percent.
Salomon Smith Barney on Monday put Schering-Plough on its ''Ten+Exceptional Names'' list of attractive stocks for the coming year.
''There was little news at the meeting other than Schering-Plough's second-quarter earnings prediction,'' said Hambrecht & Quist analyst Alex Zisson.
But Gruntal & Co analyst David Saks said Kogan's positive comments and the company's slightly better-than-expected second-quarter results reassured analysts the heady growth of Schering-Plough's share price was warranted.
''I don't think anyone walked away from the meeting disappointed,'' Saks said, noting the expected 22 percent rise in per-share earnings for the second quarter follows a 20 percent year-on-year gain seen in the first quarter.
Saks said he expected Schering-Plough to file a New Drug Application this month with the U.S. Food and Drug Administration for Vasomax, a candidate impotence pill which would compete with Pfizer Inc.'s (PFE - news) blockbuster Viagra.
Schering-Plough signed a deal late last year worth $57.5 million, exclusive of royalties, with Zonagen Inc. (ZONA - news) for worldwide rights to Vasomax, whose chemical name is phentolamine.
CIBC Oppenheimer analyst Matthew Geller said he believed Vasomax, if approved by the FDA, would have 1999 sales of $31 million, growing to $106 million by the year 2000.
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