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Biotech / Medical : T/FIF, a New Plateau -- Ignore unavailable to you. Want to Upgrade?

To: John Metcalf who wrote (1795)	3/6/2003 2:30:12 AM
From: Spekulatius	Read Replies (1) \| Respond to of 2243

Schering-Plough Cuts 2003 Forecast Wednesday March 5, 5:46 pm ET By Jed Seltzer and Ransdell Pierson NEW YORK (Reuters) - Schering-Plough Corp.(NYSE:SGP - News) on Wednesday cut its 2003 profit forecast by 25 percent, its second earnings warning in five months and the latest disappointment in a seemingly endless stream of bad news. Plunging sales of the company's Claritin allergy pill and new competition for its hepatitis C treatments prompted the company to lower its forecast to between 75 cents and 85 cents per share. That represents a decline of 37 to 44 percent from the $1.34 per share it earned last year. First-quarter earnings are expected at 10 cents per share, well below the average estimate of 25 cents per share among analysts polled by research firm Thomson First Call (News - Websites). Schering-Plough also withdrew its earlier forecasts for 2004 and 2005. The latest warning comes as the Kenilworth, New Jersey-based company faces federal probes of quality-control lapses at its plants and possibly inappropriate disclosures to select investors by Chief Executive Officer Richard Kogan. "We knew 2003 was going to be a challenge, but it appears it's going to be more of a challenge than we expected," said Robert Hazlett, an analyst at SunTrust Robinson Humphrey. Shares of Schering-Plough fell 3.1 percent to $16.60 Wednesday on the New York Stock Exchange (News - Websites), nearly a six-year low. They have declined almost 65 percent since February 2001, when the company disclosed manufacturing problems at plants in New Jersey and Puerto Rico. Schering-Plough warned in October that its 2003 profit would be only $1.00 to $1.15 per share, far lower than the $1.42 per share that Wall Street had been expecting. That bombshell came after an unexplained three-day, 20-percent decline in shares of the company's stock during which Kogan met privately with select investors, sparking a probe by U.S. regulators. A myriad of problems have battered the company's earnings and stock price in recent years. Kogan plans to retire by April, and investors hope his replacement will right the ship. PAVING WAY FOR NEW CEO "Today's earnings warning is probably part of Schering-Plough's house-cleaning to prepare the way for a prestigious new chief executive," said Shaojing Tong, a drug analyst for New York research firm Mehta Partners. He noted that Pharmacia Corp's (NYSE:PHA - News) chief executive, Fred Hassan, is widely considered the front-runner for taking over Schering-Plough because of his surprising success in turning around Pharmacia. Pharmacia is slated to merge later this month with Pfizer Inc. (NYSE:PFE - News), at which point Hassan would be able to cash out valuable stock options and take the helm of another company. Schering-Plough's woes have included the plant problems that have caused U.S. regulators to hold up approvals of new drugs, including asthma treatment Asmanex that some analysts think could become a blockbuster. Its best-selling products are the interferon Peg-Intron and antiviral pill ribavirin, used together to treat hepatitis C, which boasted combined fourth quarter sales over $800 million. But Swiss drugmaker Roche Holding AG (ROCZg.VX) last December launched a rival interferon called Pegasys and its own far cheaper form of ribavirin in the United States, ending Schering-Plough's monopoly in treating the often-deadly liver disease. Meanwhile, Schering-Plough is facing disappointing demand in Japan for its hepatitis drugs. And it is bracing for the possibility that generic forms of the ribavirin component of its dual treatment will hit U.S. drugstores later this year. The company is also reeling from last December's expiration of its U.S. patent on Claritin, which once had global annual sales of over $3 billion. The allergy medicine is now sold without a prescription for about $1 a pill, a third of its previous price. It must also compete with cheaper copycats. Schering-Plough launched a new prescription allergy pill called Clarinex over a year ago that is almost chemically identical to Claritin. But sales of cheaper over-the-counter Claritin are eating more heavily than expected into sales of the newer treatment. The company is counting on a new cholesterol fighter called Zetia, co-developed by Merck & Co. Inc. (NYSE:MRK - News), to become a big seller and help restore earnings growth. But costs of marketing Zetia will also hurt earnings this year, Schering-Plough said. (Additional reporting by Toni Clarke)