Schering-Plough Corp has reported a 71 percent drop in second-quarter net income as U.S. pharmaceutical revenues fell by nearly half due to plunging sales of prescription Claritin, the former blockbuster allergy drug.
With its mainstay drug now facing both generic and nonprescription competition, Kenilworth-based Schering-Plough posted net income of $182 million, or 12 cents per share, for the April-June period.
That matched the consensus forecast of analysts surveyed by Thomson First Call, although they had reduced their estimates from 18 cents per share after the company warned two weeks ago that it would miss that target.
Zetia brought Schering-Plough $30 million in alliance revenues on $123 million in total second-quarter sales, and a planned pill combining Zetia and Merck's Zocor, which lower cholesterol by different mechanisms, could be a big seller.
In the second quarter of 2002, the company had net income of $633 million, or 43 cents per share.
Total revenues were $2.34 billion, down 17 percent from $2.83 billion a year earlier. Excluding the impact of favorable currency exchange, revenues would have been down 23 percent.
Revenues from prescription drugs decreased 45 percent in the United States and 23 percent worldwide, falling to $1.93 billion from $2.49 billion in the year-earlier quarter.
That was mostly due to an 86 percent drop in sales of prescription Claritin, the once-popular nonsedating antihistamine. Total sales fell to $112 million, from $792 million in the second quarter of 2002. Sales plunged even further in this country — to $13 million, from $677 million a year earlier.
Sales of a successor prescription drug, Clarinex, rose 27 percent to $219 million, and Schering's new, nonprescription version of Claritin had sales of $88 million. That was far too little to offset the lost revenues from a drug that provided about one-third of Schering-Plough revenues until it lost patent protection in December.
"In many areas, this is a deeply challenged company requiring transformational change," Hassan said during a conference call with analysts.
Hassan, known as a corporate turnaround whiz, said he is moving faster than ever before to make changes in staff, products and operations that will improve the company's drug pipeline, stabilize its market share, tighten financial discipline and boost sales of key products.
He said he plans to reduce annual expenses by $200 million, but without cutting sales staff, research funding or spending on upgrades of manufacturing plants required by the federal Food and Drug Administration.
For the first six months, net income tumbled to $355 million, or 24 cents per share, from $1.23 billion or 84 cents per share, in the first half of 2002. Total revenues for the first six months were $4.4 billion, down 18 percent from $5.4 billion a year earlier.