Schering-Plough (NYSE:SGP) got EU approval yesterday to sell off several animal vaccines and medicines to fellow drugmaker Pfizer (NYSE:PFE). The sales were part of Schering's commitment to the EU to sell some of the products it received in its acquisition of the Organon BioSciences (OBS) unit of Akzo Nobel in order to eliminate antitrust issues.

I know what you're thinking: "Who cares about this little side business of pharmaceutical companies?" While I'd agree that animal health is definitely a side business, it's far from small. Just check out the numbers from the most recent quarter.


Animal Health Sales in Quarter Ending June '08

Growth (YOY)


$818 million



$715 million


Eli Lilly (NYSE:LLY)

$255 million


Wyeth (NYSE:WYE)

$313 million


Source: Company press releases.

Even generic-drug maker Teva Pharmaceutical (NASDAQ:TEVA) is in on the act, producing generic drugs for Fido, although it is considering selling off its animal health division.

The main lure of OBS for Schering was probably to boost its pharmaceutical pipeline -- with mixed results so far -- and get exposure to women's health and central nervous system medicine. However, OBS' animal health business did boost last quarter's revenue numbers by $526 million; organic growth was 11%. Selling off a few products -- Schering also had to sell a few to France-based Virbac -- shouldn't do too much damage to that growth going forward.

But even if it can manage double-digit growth of the newly acquired products, I'm not sure it will be enough to turn around the company. Animal health sales made up just 17% of sales last quarter. In order to make up for Merck's (NYSE:MRK) and Schering's Vytorin fiasco, Schering is going to have to get FDA approval for some of the pharmaceutical drugs it acquired.

More Foolishness on turnaround possibilities:

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Pfizer is also a recommendation of the Inside Value newsletter. The Fool has a disclosure policy.