It can be tough to identify the point at which a company has stanched its bleeding, put improvements into place, and become a real turnaround candidate.

In the case of pharmaceutical company Schering-Plough (NYSE:SGP), management has now announced the official beginning of its turnaround phase. I'm not one for this sort of high-minded formalism, but I'll be the first to tip my hat to the progress already made by CEO Fred Hassan and the rest of his team.

Part and parcel of the turnaround is getting growth back on track. Sales in the quarter rose 15% as prescription pharmaceutical sales climbed 18%. Growth was fueled by a variety of products, including above-average growth for Remicade, PEG-Intron, and Temodar. While net income growth was hampered by a large R&D payment made to acquire rights to an antibody drug candidate, year-over-year performance was still notably improved.

It certainly looks like Schering-Plough has the business moving in the right direction again, and Vytorin seems to be a big part of that improvement. Sales from the company's cholesterol-fighting joint venture with Motley Fool Income Investor pick Merck (NYSE:MRK) (which includes Vytorin) totaled more than $600 million in the quarter, nearly double the year-ago level. Schering-Plough recognizes its share of these profits a little differently (as equity income), but it's nevertheless true that the company's share in this product is making a tremendous difference on the bottom line.

Of course, there are still risks with this turnaround story. Something could happen to Vytorin -- unexpected competition, a previously unknown side effect, etc. -- and that would obviously be a painful blow. Additionally, although the company continues to make progress in its regulatory clean-up efforts with the FDA, it's not in the clear just yet. Finally, there are the normal risks to all pharmaceutical companies -- drug litigation, trial failures, etc.

I would think that Schering-Plough should be set to produce several years of good profit growth in a time when many of its peers and rivals will be struggling with single-digit growth or worse. That said, the stock seems to reflect a lot of those expectations already. So while there's probably still some running room for the company, I'm not sure there's a lot of unappreciated value here right now.

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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).