Schering-Plough Corp.'s chief executive told shareholders Friday the company remains on track five years into his rebuilding program, with a wider range of products and more drugs in late-stage development.
CEO Fred Hassan said sales have risen by $6.6 billion in four years, to about $12.7 billion. That includes revenues from Organon BiosSciences, a big biotech company acquired last year that made the combined company a world leader in women's and animal health products.
Schering-Plough, based in Kenilworth, N.J., now has 13 experimental drugs in final testing in humans, up from five in 2003, he noted.
But Hassan, speaking at the annual shareholder's meeting, said the business has been affected by negative reports about a study of key cholesterol drugs it jointly markets with partner Merck & Co.
The study found their pricey combination cholesterol drug Vytorin was no better at preventing artery clogging than a cheap generic, and the long delay in the study's release has led to multiple probes by congressional committees and state and federal investigators.
Last month, Hassan announced another major restructuring _ to cut about 10 percent of jobs and $1.5 billion in annual costs _ after the Vytorin flap started cutting into sales.
When Hassan took over in the spring 2003, the company was in big trouble, with profits and the stock price down and federal regulators ordering it to pay a huge fine and clean up and upgrade its manufacturing plants. The prior CEO had been forced out amid those problems and the loss of most revenues from then-blockbuster allergy pill Claritin, which had brought in about a third of total revenues until it became available in nonprescription form.
"We resolved to never again become aligned to a single product like Claritin," Hassan told the shareholders.
Hassan said the company's long-term goal is to have four to six products driving growth. He said Schering-Plough now gets more than 20 percent of its revenues from consumer and animal health products, and only about 12 percent of revenues from its cholesterol franchise.
Cowen & Co. analyst Steve Scala wrote in a research note Friday that Schering-Plough's earnings per share could grow more than the drug industry average through 2012, but he has reduced his forecasts for sales of the cholesterol drugs during that period, given the setback over Vytorin. Scala kept his hold recommendation for the stock.
The meeting was held in Memphis, Tenn., where the company has the research and development center for its consumer health business, which makes Claritin, Dr. Scholl's foot products and the Coppertone suncare line.
In trading Friday, Schering-Plough shares fell 4 cents to $19.38, near their 52-week low of $13.83.
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