The seemingly unending stream of bad news for Schering-Plough
The main reason for the warning is the expected shortfall in sales of the allergy drug Claritin, which raked in $3.2 billion in revenue last year. With patent protection expiring in December, Schering is moving Claritin from prescription to over-the-counter status in order to compete with generic equivalents. Apparently, sales of its new allergy prescription drug Clarinex are not yet taking up the slack.
Schering's shares were off about 4% today and now sit at a five-year low. The company is still extremely profitable, with a solid balance sheet and an attractive dividend yield of about 2.9%. Its always-risky drug cycle is buffeted somewhat by sales of sunscreen, foot care, and animal health products.
But investors will have to exercise patience. The company expects growth to return in 2004 to the tune of about 20%, and "continuing to accelerate in 2005," but there may not be a whole lot of good news in the meantime.