Turnarounds take time, but if the first quarter is an accurate picture of what's happening at Schering-Plough (NYSE:SGP), this company seems to be solidly on the road back. Sales were up 21% for the quarter at $2.4 billion -- marking the second consecutive quarter of annual and sequential revenue improvement.

Schering-Plough also reported a net profit for the quarter of $105 million or $0.07 a share, reversing the year-ago loss. While the company made some minor improvements in margins, equity income from its cholesterol joint venture with Motley Fool Income Investor recommendation Merck (NYSE:MRK) allowed the company to post a profit, and it would have had a small pre-tax loss without this contribution.

Luckily, that partnership with Merck is paying off in a big way, as Vytorin is proving to be a very popular drug regimen. A combination of Zetia and Zocor, Vytorin is currently a unique option for treating cholesterol -- and sales of the joint venture more than doubled in the March quarter to $505 million, from $188 million a year ago.

Other companies, such as Motley Fool Inside Value pick Pfizer (NYSE:PFE), are working on their own combinations to compete with Vytorin, but they won't be on the market for years -- and Vytorin still has potential sales in excess of $2 billion to $3 billion.

Schering-Plough's other drugs also performed well in the March quarter. Sales of Remicade, which Schering-Plough sells outside the United States, grew 33% to $220 million, and Temodar sales climbed 52% to $131 million. Other drugs like Nasonex, PEG-Intron, and Claritin Rx all showed double-digit revenue growth. Rebetol was the only significant drug to show year-over-year declines.

Though Schering-Plough stock is nowhere near the heights seen back in late 2000, the shares have come up nicely off the bottom and are near a 52-week high. The company still has room for improvement with respect to its margins, and there is a clear opportunity to grow revenue with its current product portfolio.

That said, Schering-Plough investors must realize that the company has a rather sparse late-stage pipeline relative to other large pharmaceutical peers. Though that is not a major problem today, it is something for long-term investors to keep an eye on over time. Remember, no matter how well management has performed in getting this business on the path to a turnaround, pharmaceutical companies ultimately win and lose on the strength of their pipeline and/or their ability to supplement that pipeline with licensed and partnered products.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).