-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G7ITyuXPGXJguCMuOn/Tq2xXtJ+PT/bNCg9oEcTnvzWmO49expfzMwVmDiUPtOMh bVE82EXivKoNqIKcQhgXVw== 0000950123-05-000636.txt : 20050125 0000950123-05-000636.hdr.sgml : 20050125 20050125070809 ACCESSION NUMBER: 0000950123-05-000636 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050125 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050125 DATE AS OF CHANGE: 20050125 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCHERING PLOUGH CORP CENTRAL INDEX KEY: 0000310158 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 221918501 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06571 FILM NUMBER: 05545810 BUSINESS ADDRESS: STREET 1: ONE GIRALDA FARMS CITY: MADISON STATE: NJ ZIP: 07940-1000 BUSINESS PHONE: 9738227000 8-K 1 y05004e8vk.txt SCHERING-PLOUGH CORPORATION UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): January 25, 2005 SCHERING - PLOUGH CORPORATION (Exact Name of Registrant as Specified in its Charter) New Jersey 1-6571 22-1918501 (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification Number) 2000 Galloping Hill Road Kenilworth, NJ 07033 (Address of Principal Executive Office) Registrant's telephone number, including area code: (908) 298-4000 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION. Schering-Plough today issued a press release titled "Schering-Plough Reports Financial Results for 2004 Fourth Quarter, Full Year" and provided additional supplemental financial data. The press release is furnished as Exhibit 99.1 to this 8-K. The supplemental financial data is furnished as Exhibit 99.2 to this 8-K. ITEM 8.01 OTHER EVENTS. Disclosure Notice for Forward Looking Statements This 8-K, including each exhibit, the comments of Schering-Plough officers during our earnings teleconference/webcast on January 25, 2005 at 8:00 am (EDT), and other written reports and oral statements made from time to time by the company may contain "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. Forward-looking statements relate to expectations or forecasts of future events. They use words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "project," "intend," "plan," "potential," "will," and other words and terms of similar meaning in connection with a discussion of potential future events, circumstances or future operating or financial performance. You can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. In particular, forward-looking statements include statements relating to future actions, ability to access the capital markets, prospective products, the status of product approvals, future performance or results of current and anticipated products, sales efforts, development programs, estimates of rebates, discounts and returns, expenses and programs to reduce expenses, the cost of and savings from reductions in work force, the outcome of contingencies such as litigation and investigations, growth strategy and financial results. Any or all forward-looking statements here or in other publications may turn out to be wrong. Actual results may vary materially, and there are no guarantees about Schering-Plough's financial and operational performance or the performance of Schering-Plough stock. Schering-Plough does not assume the obligation to update any forward-looking statement. Many factors could cause actual results to differ from Schering-Plough's forward-looking statements. These factors include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. Although it is not possible to predict or identify all such factors, they may include the following: - - A significant portion of net sales are made to major pharmaceutical and health care products distributors and major retail chains in the United States. Consequently, net sales and quarterly growth comparisons may be affected by fluctuations in the buying patterns of major distributors, retail chains and other trade buyers. These fluctuations may result from seasonality, pricing, wholesaler buying decisions or other factors. - - Competitive factors, including technological advances attained by competitors, patents granted to competitors, new products of competitors coming to the market, new indications for competitive products, and generic, prescription and/or OTC products that compete with products of Schering-Plough or the Merck/Schering-Plough Pharmaceuticals joint venture (such as competition from OTC statins, like the one approved for use in the U.K. for which impact in the cholesterol reduction market is not yet known). - - Increased pricing pressure both in the United States and abroad from managed care organizations, institutions and government agencies and programs. In the United States, among other developments, consolidation among customers may increase pricing pressures and may result in various customers having greater influence over prescription decisions through formulary decisions and other policies. - - The potential impact of the Medicare Prescription Drug, Improvement and Modernization Act of 2003; possible other U.S. legislation or regulatory action affecting, among other things, pharmaceutical pricing and reimbursement, including Medicaid and Medicare, involuntary approval of prescription medicines for over-the-counter use; and other health care reform initiatives and drug importation legislation. Legislation or regulations in markets outside the U.S. affecting product pricing, reimbursement or access. Laws and regulations relating to trade, antitrust, monetary and fiscal policies, taxes, price controls and possible nationalization. - - Patent positions can be highly uncertain and patent disputes are not unusual. An adverse result in a patent dispute can preclude commercialization of products or negatively impact sales of existing products or result in injunctive relief and payment of financial remedies. - - Uncertainties of the FDA approval process and the regulatory approval and review processes in other countries, including, without limitation, delays in approval of new products. - - Failure to meet Good Manufacturing Practices established by the FDA and other governmental authorities can result in delays in the approval of products, release of products, seizure or recall of products, suspension or revocation of the authority necessary for the production and sale of products, fines and other civil or criminal sanctions. The resolution of manufacturing issues with the FDA discussed in Schering-Plough's 10-Ks, 10-Qs and 8-Ks are subject to substantial risks and uncertainties. These risks and uncertainties, including the timing, scope and duration of a resolution of the manufacturing issues, will depend on the ability of Schering-Plough to assure the FDA of the quality and reliability of its manufacturing systems and controls, and the extent of remedial and prospective obligations undertaken by Schering-Plough. - - Difficulties in product development. Pharmaceutical product development is highly uncertain. Products that appear promising in development may fail to reach market for numerous reasons. They may be found to be ineffective or to have harmful side effects in clinical or pre-clinical testing, they may fail to receive the necessary regulatory approvals, they may turn out not to be economically feasible because of manufacturing costs or other factors or they may be precluded from commercialization by the proprietary rights of others. - - Post-marketing issues. Once a product is approved and marketed, clinical trials of marketed products or post-marketing surveillance may raise efficacy or safety concerns. Whether or not scientifically justified, this new information could lead to recalls, withdrawals or adverse labeling of marketed products, which may negatively impact sales. Concerns of prescribers or patients relating to the safety or efficacy of Schering-Plough products, other companies' products or pharmaceutical products generally, may also negatively impact sales. - - Major products such as CLARITIN, CLARINEX, INTRON A, PEG-INTRON, REBETOL Capsules, REMICADE, TEMODAR and NASONEX accounted for a material portion of Schering-Plough's 2004 revenues. If any major product were to become subject to a problem such as loss of patent protection, OTC availability of the Company's product or a competitive product (as has been disclosed for CLARITIN and its current and potential OTC competition), previously unknown side effects; if a new, more effective treatment should be introduced; generic availability of competitive products; or if the product is discontinued for any reason, the impact on revenues could be significant. Also, such information about important new products, such as ZETIA and VYTORIN, or important products in our pipeline, may impact future revenues. Further, sales of VYTORIN may negatively impact sales of ZETIA. - - Unfavorable outcomes of government (local and federal, domestic and international) investigations, litigation about product pricing, product liability claims, other litigation and environmental concerns could preclude commercialization of products, negatively affect the profitability of existing products, materially and adversely impact Schering-Plough's financial condition and results of operations, or contain conditions that impact business operations, such as exclusion from government reimbursement programs. - - Economic factors over which Schering-Plough has no control, including changes in inflation, interest rates and foreign currency exchange rates. - - Instability, disruption or destruction in a significant geographic region - due to the location of manufacturing facilities, distribution facilities or customers - regardless of cause, including war, terrorism, riot, civil insurrection or social unrest; and natural or man-made disasters, including famine, flood, fire, earthquake, storm or disease. - - Changes in tax laws including changes related to taxation of foreign earnings. - - Changes in accounting standards promulgated by the American Institute of Certified Public Accountants, the Financial Accounting Standards Board, the SEC, or the Public Company Accounting Oversight Board that would require a significant change to Schering-Plough's accounting practices. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. The following exhibits are furnished pursuant to Item 2.02 with this 8-K: 99.1 Press release dated January 25, 2005 titled "Schering-Plough Reports Financial Results for 2004 Fourth Quarter, Full Year" (furnished pursuant to Item 2.02) 99.2 Supplemental Financial Data (furnished pursuant to Item 2.02) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Schering-Plough Corporation By: /s/ Douglas J. Gingerella --------------------------- Douglas J. Gingerella Vice President and Controller (Duly Authorized Officer and Chief Accounting Officer) Date: January 25, 2005 Exhibit Index The following exhibits are furnished with this 8-K: 99.1 Press release titled "Schering-Plough Reports Financial Results for 2004 Fourth Quarter, Full Year" (furnished pursuant to Item 2.02) 99.2 Supplemental Financial Data (furnished pursuant to Item 2.02) EX-99.1 2 y05004exv99w1.txt PRESS RELEASE [Schering-Plough Letterhead] EXHIBIT 99.1 FOR RELEASE: IMMEDIATELY Media Contact: Steve Galpin, Jr. (908) 298-7415 Investor Contacts: Alex Kelly Janet M. Barth (908) 298-7436 SCHERING-PLOUGH REPORTS FINANCIAL RESULTS FOR 2004 FOURTH QUARTER, FULL YEAR KENILWORTH, N.J., Jan. 25, 2005 - Schering-Plough Corporation (NYSE: SGP) today reported financial results for the 2004 fourth quarter and full year. "We made enormous progress on the Stabilize and Repair phases of our six-to-eight year Action Agenda," said Fred Hassan, Schering-Plough chairman and CEO. "In 2004, the company managed severe top-line challenges while making critical investments in our long-term future. As we go into 2005, we are seeing the beginnings of top-line growth, with quarterly sales comparisons gradually moving into positive territory. In my experience, it is exceptionally challenging to turn negative sales momentum into positive performance. We are proud of this accomplishment. We now intend to drive this trend into bottom-line growth - through excellent execution, strategic investments, cost consciousness and sales dynamism. And we continue to anticipate beginning a turnaround later this year." Hassan highlighted some of Schering-Plough's major accomplishments in 2004 to transform the company into a long-term, high-performance competitor: - The on-time U.S. approval in July and successful launch of the cholesterol-lowering medicine VYTORIN while growing ZETIA to $1 billion in sales; - Continued progress in fulfilling consent decree obligations with the U.S. Food and Drug Administration (FDA), completing 161 of 212 significant steps and 22 of 33 validation actions without incurring any additional payments for missed deadlines; - Resolution of several major legacy issues, including the U.S. Attorney's Office for the Eastern District of Pennsylvania and the U.S. Department of Justice; - Gaining greater financial flexibility by strengthening its balance sheet through the successful issuance of Mandatory Convertible Preferred Stock in August; and - 2 - - Expanding the company's product line and research portfolio through internal R&D advances and licensing and strategic agreements with Bayer, Toyama Chemical Co. Ltd. and ViroPharma Incorporated. "On the product front, the year's major milestone was without question the on-time U.S. approval and the successful launch of the cholesterol-lowering medicine VYTORIN," said Hassan. "With its dual inhibition of the two sources of cholesterol, VYTORIN offers patients a powerful new treatment option for reducing cholesterol levels." He said VYTORIN is being well accepted by managed care organizations, reflecting the product's unique profile and attractive value proposition of high efficacy and competitive pricing. "We estimate that VYTORIN has open or second tier managed care access for more than 75 percent of all U.S. covered lives, which is a huge accomplishment in such a short time frame," added Hassan. "It is also worth noting that at this time last year, we reported that ZETIA sales were annualizing at more than $600 million. Now, with Vytorin launched, sales of our cholesterol franchise are annualizing at significantly in excess of $1 billion. ZETIA and VYTORIN represent two of the industry's major product launches in recent years. The cholesterol market is well - -established and the success of our cholesterol franchise remains pivotal to our turnaround." he said. VYTORIN (ezetimibe/simvastatin), a new once-daily, cholesterol-lowering therapy marketed in partnership with Merck & Co., Inc. (Merck), contains ZETIA (ezetimibe), a cholesterol-absorption inhibitor discovered by Schering-Plough, and Merck's Zocor (simvastatin) statin product. VYTORIN is the first single tablet to provide powerful LDL cholesterol reduction through dual inhibition of the two sources of cholesterol by inhibiting the production of cholesterol in the liver and blocking the absorption of cholesterol in the intestine, including cholesterol from food. VYTORIN has been shown to lower LDL cholesterol by 52 percent at the recommended starting dose (10/20 mg) and 60 percent at the maximum dose (10/80 mg). In head-to-head trials, VYTORIN provided superior reductions in LDL cholesterol versus current market leaders atorvastatin (Pfizer's Lipitor(R)) and simvastatin (Zocor) across the dosing range. Results of a clinical trial reported in October 2004 showed that 82 percent of high-risk patients taking VYTORIN achieved their LDL goal of less than 100 versus only 47 percent for Lipitor at the usual starting doses of each therapy. Schering-Plough achieved further progress in broadening its product portfolio with several regulatory actions in 2004. The company's PEG-INTRON and REBETOL combination therapy for hepatitis C in December became the first pegylated interferon combination therapy to be available in Japan. Other products gaining approvals for additional indications or formulations included REMICADE, a treatment for immune-mediated inflammatory disorders, in the European Union (EU) and, in the United States, the allergy medicines NASONEX and CLARINEX. In addition, U.S. and EU regulatory applications were filed seeking marketing approval for the systemic antifungal posaconazole and for a new indication for the brain cancer treatment TEMODAR. Throughout the year, Schering-Plough aggressively pursued cost reductions and greater efficiencies while working to upgrade the company's global infrastructure. "We reinvested much of - 3 - those savings, and I believe that a key factor in the success of the VYTORIN launch was the investment we made in advance to expand and train our U.S. sales force," he said. "During 2004, we did what we said we would do," he said. "We go into 2005 with much accomplished and still much work ahead." On the growing public concern about the general safety of medicines, Hassan commented, "Today our entire industry confronts a special challenge in the form of new, heightened caution among regulators, prescribers and patients. In this new environment, our fundamental commitment to building business integrity, quality and compliance in the New Schering-Plough is especially relevant." Regarding the American Jobs Creation Act of 2004, the company offered the following comment: "We are pleased by the passage of this important legislation," said Hassan. "While this legislation will require a tax charge, it will also allow us to repatriate significant foreign funds for productive purposes in the United States, in line with the intent of the legislation," he added. FOURTH QUARTER 2004 RESULTS Schering-Plough reported a net loss available for common shareholders of $856 million in the 2004 fourth quarter or 58 cents in diluted loss per common share compared with a loss in the 2003 period of $181 million or 12 cents per share. The net loss available for common shareholders and loss per share in the 2004 fourth quarter reflected a tax provision of $807 million, or 55 cents per share, relating primarily to the recently enacted tax legislation - the American Jobs Creation Act of 2004 - which allows companies to repatriate funds held by foreign subsidiaries to the United States at a much-reduced tax rate. Fourth quarter 2004 net sales of $2.2 billion were 12 percent higher than the 2003 period and included a favorable foreign exchange impact of 4 percent. The fourth quarter sales increase was led by U.S. and international product growth, the sales contribution from Bayer products and the positive impact from currency exchange. The company noted that net sales under U.S. Generally Accepted Accounting Principles (GAAP) does not include sales of the cholesterol products marketed in partnership with Merck, as the company accounts for the cholesterol joint venture under the equity method as described below. Global cholesterol joint venture net sales, which include VYTORIN and ZETIA, totaled approximately $400 million in the 2004 fourth quarter, up more than 140 percent from approximate net sales of $163 million in the comparable 2003 period. U.S. cholesterol joint venture net sales for the period totaled $333 million compared with $144 million in 2003, up 131 percent. VYTORIN (also marketed as INEGY and ZINTREPID) has now been approved in 25 countries, including the United States, and ZETIA (also marketed as EZETROL and ZIENT) in 72 countries. Overall, the company shares in approximately 50 percent of the profits of the joint venture with Merck, although there are different profit sharing arrangements for the cholesterol - 4 - products in countries around the world. Accordingly, including an adjustment of an assumed 50 percent of global cholesterol joint venture net sales (see note and table below), Schering-Plough's adjusted net sales for the fourth quarter of 2004 would have totaled $2.4 billion, an increase of $354 million or 17 percent, as compared to $2.0 billion on a similar adjusted basis in the fourth quarter of 2003. The company utilizes the equity method of accounting for its cholesterol joint venture with Merck. Under the equity method, the company records its share of the operating profits less its share of the research and development costs in "Equity income from cholesterol joint venture." "Equity income from cholesterol joint venture" for Schering-Plough totaled $98 million in the 2004 fourth quarter versus $33 million in the fourth quarter of 2003. The company noted that it incurs substantial costs, such as selling, general and administrative costs, that are not reflected in "Equity income from cholesterol joint venture" and are borne by the overall cost structure of Schering-Plough. On a reported basis, fourth quarter 2004 sales of Prescription Pharmaceuticals, which do not include sales of the cholesterol joint venture, totaled $1.7 billion, up 15 percent, with a favorable foreign exchange impact of 4 percent. Consumer Health Care sales declined 4 percent to $217 million. Animal Health sales grew 8 percent to $230 million, reflecting solid growth across core brands and a favorable foreign exchange impact of 5 percent. Among prescription products recording higher sales in the 2004 fourth quarter were TEMODAR, a treatment for certain types of brain tumors, and REMICADE, a treatment for immune-mediated inflammatory disorders that Schering-Plough markets in countries outside the United States (excluding Japan and certain Far East markets) for rheumatoid arthritis, psoriatic arthritis, Crohn's disease and ankylosing spondylitis. TEMODAR sales totaled $150 million in the 2004 fourth quarter, up 72 percent, benefiting from increased market penetration. Sales for REMICADE rose 33 percent to $212 million, due primarily to greater demand and expanded indications. Also posting higher sales in the quarter was CAELYX, for the treatment of ovarian cancer, metastatic breast cancer and Kaposi's sarcoma, up 25 percent to $40 million, largely as a result of increased use in treating breast cancer. Also contributing to 2004 fourth quarter net sales growth were products under the strategic agreement with Bayer, which became effective on Oct. 1, 2004. Under the agreement, Schering-Plough gained exclusive rights in the United States and Puerto Rico to market, sell and distribute Bayer's AVELOX and CIPRO antibiotics and to undertake Bayer's U.S. commercialization activities for the erectile dysfunction medicine LEVITRA under Bayer's co-promotion agreement with GlaxoSmithKline PLC. In the Japanese market, Bayer will co-market Schering-Plough's cholesterol absorption inhibitor ZETIA when approved. Sales of the Bayer products totaled $91 million in the quarter, reflecting harmonization of trade inventory practices coupled with a mild respiratory season. Schering-Plough records its share of LEVITRA results as alliance revenue within net sales. - 5 - In the company's prescription allergy business, global CLARINEX sales in the fourth quarter of 2004 were $162 million, up 22 percent. Sales of CLARINEX outside the United States rose 38 percent to $55 million in the fourth quarter due to market share gains and continued conversion from prescription CLARITIN. U.S. CLARINEX sales increased 15 percent to $107 million, benefiting from favorable comparisons of trade inventory adjustments. Global NASONEX sales rose 10 percent to $145 million, with U.S. sales climbing 5 percent to $81 million. In international markets, NASONEX sales were up 17 percent to $64 million as a result of market share gains and market growth. Although the company's hepatitis C products showed signs of market share stabilization in the 2004 fourth quarter, product sales declined versus the year-ago period due to ongoing competition in a contracting market and increased U.S. generic competition for REBETOL. Fourth quarter global sales of PEG-INTRON were down 15 percent to $138 million; sales of REBETOL were down 51 percent to $49 million. In Consumer Health Care, sales of OTC CLARITIN were down 22 percent to $75 million, primarily reflecting increased private label competition. Sales of foot care products rose 16 percent to $79 million, benefiting from higher sales of DR. SCHOLL'S FREEZE AWAY wart remover product. The company's gross margin at 62.1 percent for the 2004 fourth quarter was flat compared to the 2003 period. Schering-Plough said its ongoing focus on operational excellence in all key functions, including compliance and quality, continues to increase the overall cost structure of the company. Selling, general and administrative expenses rose 25 percent to $1.0 billion in the fourth quarter of 2004 versus the prior year, primarily reflecting the previously announced field force expansions to prepare for the U.S. launch of VYTORIN and the addition of more than 800 Bayer sales representatives, coupled with increased promotional spending and Bayer integration costs. Research and development spending for the 2004 fourth quarter totaled $406 million, up 3 percent. The "Other, net" line primarily reflects higher interest expense from increased borrowings stemming from the long-term debt issued in the 2003 fourth quarter, offset by higher interest income related to higher cash and cash equivalent balances resulting from the August 2004 issuance of $1.4 billion in Mandatory Convertible Preferred Stock. In the fourth quarter of 2004, the company recorded a tax provision of $807 million, which includes an accrual for tax at the reduced rate under the American Jobs Creation Act of 2004. This Act applies a tax rate of 5.25 percent on qualifying repatriations of funds versus the normal tax rate of 35 percent. The company intends to repatriate approximately $9.4 billion of previously unremitted foreign - 6 - earnings under the Act. Also included in the fourth quarter tax provision is a valuation allowance associated with certain deferred tax assets resulting from changes in company tax planning strategies triggered by the opportunity to take full advantage of the Act. RECENT DEVELOPMENTS The company also offered the following summary of recent significant developments, including: - Launched PEG-INTRON in Japan for use in combination with REBETOL Capsules for the treatment of chronic hepatitis C - the first and only pegylated interferon-based combination therapy available in Japan (announced Dec. 10, 2004). An estimated 1.5 to 2 million Japanese are chronically infected with hepatitis C. - Reached an agreement with NeoGenesis Pharmaceuticals, Inc. of Cambridge, Mass., (announced Jan. 20, 2005) for Schering-Plough to acquire most of NeoGenesis' assets, subject to normal closing conditions. Financial terms of the transaction were not disclosed. NeoGenesis is a privately held biopharmaceutical company focused on applying novel screening and chemistry technologies to discover and develop small molecule drugs. Schering-Plough and NeoGenesis have had a research collaboration since 1999. - Merck/Schering-Plough Pharmaceuticals announced on Nov. 9, 2004, a large scale clinical outcomes trial to be conducted for VYTORIN. The trial, known as IMPROVE IT (Improved Reduction of Outcomes: VYTORIN Efficacy International Trial), will evaluate the risk reduction provided by VYTORIN 10/40 mg as compared to Zocor (simvastatin) 40 mg in reducing death and major coronary events in approximately 10,000 patients with acute coronary syndromes (ACS). The intent of the study is to evaluate the incremental reductions in cardiovascular events in these patients that VYTORIN may provide as compared to simvastatin alone. - Merck/Schering-Plough Pharmaceuticals announced on Oct. 28, 2004, results from a clinical trial conducted in 1,902 patients with high cholesterol showing that VYTORIN provided greater reduction in LDL ("bad") cholesterol across the dosing ranges compared to Lipitor. At the most commonly used starting doses of these two therapies, VYTORIN 10/20 mg decreased LDL cholesterol by 51 percent compared with 36 percent for Lipitor 10 mg (p<0.001). The results were presented at the 15th International Symposium on Drugs Affecting Lipid Metabolism (DALM), in Venice, Italy. - Gained U.S. approval for use of NASONEX Nasal Spray, 50 mcg for the treatment of nasal polyps in patients 18 years of age and older (announced Dec. 15, 2004). This represents the first and only FDA-approval of a nasal inhaled steroid for the treatment of this condition prior to - 7 - surgery. - Reported U.S. availability of new scent-free, alcohol-free formulation of NASONEX Nasal Spray, 50 mcg. (announced Jan. 12, 2005). - Reported results on Oct. 31, 2004, of a pivotal investigative clinical study of posaconazole oral suspension for invasive fungal infections, which showed that posaconazole was successful in treating a wide range (20 species) of fungal infections and may have broad clinical use in the treatment of infections when other therapies have failed. The results were reported at the 44th Annual Interscience Conference on Antimicrobial Agents and Chemotherapy (ICAAC). - Expanded CLARITIN nonsedating antihistamine line in Japan with the introduction of instantly dissolving CLARITIN REDITABS (announced Nov. 24, 2004). - Received six-month priority review from FDA (announced Oct. 29, 2004) of a Supplemental New Drug Application for TEMODAR in the treatment of gliomas, a form of brain tumors. The application was submitted to FDA in September 2004. - Filed an application with the European Medicines Agency (EMEA) (announced Nov. 3, 2004) seeking centralized Marketing Authorization in the European Union (EU) for the use of TEMODAL Capsules (sold as TEMODAR in the United States) for the treatment of patients with newly diagnosed glioblastoma multiforme concomitantly with radiotherapy and then as adjuvant treatment. Glioblastoma multiforme is a form of brain tumor. FOURTH QUARTER 2004 CONFERENCE CALL AND WEBCAST Schering-Plough will conduct a conference call today at 8 a.m. (ET) to review the 2004 fourth quarter and full year results. To listen live to the call, dial 1-877-565-9664 or 1-706-634-5003. A replay of the call will be available starting at approximately 11 a.m. on Jan. 25 through 5 p.m. on Jan. 27. To listen to the replay, dial 1-800-642-1687 or 1-706-645-9291 and enter the conference ID # 2568524. A live audio webcast of the conference call also will be available by going to the Investor Relations section of the Schering-Plough corporate Web site, www.schering-plough.com, and clicking on the "Presentations/Webcasts" link. A replay of the webcast will be available starting at approximately 11 a.m. on Jan. 25 through 5 p.m. on Jan. 31. NOTE: Adjusted net sales, defined as net sales plus an assumed 50 percent of global cholesterol joint venture net sales, is a non-U.S. GAAP measure used by management in evaluating the performance of the company's overall business. The company believes that this performance measure contributes to a more complete understanding by investors of the overall results of the company. The - 8 - company provides this information to supplement the reader's understanding of the importance to the company of its share of results from the operations of the cholesterol joint venture. Net sales (excluding the cholesterol joint venture net sales) is required to be presented under U.S. GAAP. The cholesterol joint venture's net sales are included as a component of operating profits in the calculation of the company's "Equity income from cholesterol joint venture." DISCLOSURE NOTICE: The information in this press release includes certain "forward-looking" statements within the meaning of the Securities Litigation Reform Act of 1995 relating to the company's business prospects, trends in top and bottom line performance, the timing of the anticipated turnaround and resulting growth prospects, the future impacts of the American Jobs Creation Act of 2004 and the potential of certain products including ZETIA, VYTORIN and posaconazole. Forward-looking statements relate to expectations or forecasts of future events and not to historical information. There are no guarantees about any of the forward-looking statements, Schering-Plough stock or Schering-Plough's business. Actual results may differ materially from forward-looking statements due to a number of risks and uncertainties, including the market viability of the company's (and the cholesterol joint venture's ) marketed and pipeline products; possible changes in business strategies and the ability to successfully implement those business strategies; general market and economic factors; regulations and legislation; label/use changes and concerns of prescribers or patients relating to Schering-Plough products, other companies' products or pharmaceutical products generally; existing and new manufacturing issues that may arise; trade buying patterns; patent positions; litigation and investigations; and instability or destruction in a geographic area important to the company. For further details and a discussion of these and other risks and uncertainties that may impact forward-looking statements, see Schering-Plough's Securities and Exchange Commission filings, including the company's 8-K being filed today. The company does not assume any obligation to update any forward-looking statements. Schering-Plough is a global science-based health care company with leading prescription, consumer and animal health products. Through internal research and collaborations with partners, Schering-Plough discovers, develops, manufactures and markets advanced drug therapies to meet important medical needs. Schering-Plough's vision is to earn the trust of the physicians, patients and customers served by its more than 30,000 people around the world. The company is based in Kenilworth, N.J., and its Web site is www.schering-plough.com. - 9 - SCHERING-PLOUGH CORPORATION Report for the fourth quarter and twelve months ended December 31 (unaudited): (Amounts in millions, except per share figures)
Fourth Quarter Twelve Months ----------------------------- ------------------------- 2004 2003 % 2004 2003 % ------- ------- ----- ------- ------- --- Net Sales .................................................... $ 2,184 $ 1,948 12 $ 8,272 $ 8,334 (1) Cost of Sales ................................................ 829 739 12 3,070 2,833 8 Selling, General and Administrative ...................................... 1,026 821 25 3,811 3,474 10 Research and Development a/ .................................. 406 395 3 1,607 1,469 9 Other, Net ................................................... 33 10 N/M 146 59 N/M Special Charges b/ ........................................... 15 229 (93) 153 599 (74) Equity (Income) from Cholesterol Joint Venture ............................... (98) (33) N/M (347) (54) N/M ------- ------- ------- ------- Loss Before Income Taxes ..................................... (27) (213) 87 (168) (46) N/M Income Tax Expense/(Benefit) ................................. 807 (32) N/M 779 46 N/M ------- ------- ------- ------- Net Loss ..................................................... $ (834) $ (181) N/M $ (947) $ (92) N/M ======= ======= ======= ======= Dividends on Preferred Shares ................................ 22 - N/M 34 - N/M ------- ------- ------- ------- Net Loss Available for Common Shareholders ...................................... $ (856) $ (181) N/M $ (981) $ (92) N/M ======= ======= ======= ======= Diluted Loss per Common Share ................................ $ (0.58) $ (0.12) N/M $ (0.67) $ (0.06) N/M ======= ======= ======= ======= Effective Tax Rate c/ ........................................ N/M 15.0% N/M N/M Average Common Shares Outstanding - Diluted ..................................... 1,473 1,470 1,472 1,469 Actual Number of Common Shares Outstanding at December 31 ................................ 1,474 1,471 1,474 1,471
The Company noted that it incurs substantial costs, such as selling, general and administrative costs, that are not reflected in the "Equity income from cholesterol joint venture" and are borne by the overall cost structure of Schering-Plough. N/M - Not a meaningful percentage a/ Research and development in the twelve months of 2004 includes an $80 million upfront payment in conjunction with the licensing from Toyama Chemical Company LTD. of garenoxacin, a quinolone antibiotic in development. b/ Special Charges for the fourth quarter ended December 31, 2004 included $8 million of employee termination costs and $7 million of closure costs associated with the exit from a small European research-and-development facility. Special charges for the twelve months ended December 31, 2004 included $119 million of employee termination costs, as well as $27 million of asset impairment charges and $7 million of closure costs primarily related to the aforementioned research-and-development facility. Special Charges for the fourth quarter of 2003 included $179 million of employee termination costs, primarily related to the VERP in the United States, as well as $50 million of - 10 - asset impairment charges related to certain fixed and intangible assets. Special charges for the full year 2003 also included the $350 million provision to increase litigation reserves recorded in the third quarter, as well as $20 million of asset impairment charges related to manufacturing facility assets recorded in the second quarter. c/ In the fourth quarter ended December 31, 2004, the Company recorded the impact of the intended repatriation of funds under the American Jobs Creation Act. For the full year 2003, the effective tax rate was 15% excluding the $350 million non-tax deductible provision to increase litigation reserves. - 11 - SCHERING-PLOUGH CORPORATION Report for the period ended December 31 (unaudited): Net Sales by Major Product: (Dollars in Millions)
Fourth Quarter Twelve Months ----------------------- ---------------------- 2004 2003 % 2004 2003 % ------ ------ --- ------- ------ --- GLOBAL PHARMACEUTICALS $1,737 $1,509 15 $ 6,417 $6,611 (3) Remicade 212 159 33 746 540 38 Clarinex / Aerius 162 133 22 692 694 0 Temodar 150 87 72 459 324 42 Nasonex 145 132 10 594 500 19 PEG-Intron 138 162 (15) 563 802 (30) Integrilin 81 46 75 325 306 6 Claritin Rx* 80 81 (1) 321 328 (2) Intron A 79 107 (26) 318 409 (22) Subutex 50 41 21 185 144 29 Rebetol 49 100 (51) 287 639 (55) Avelox 44 -- N/M 44 -- N/M Cipro 43 -- N/M 43 -- N/M Elocon 42 33 27 168 154 9 Caelyx 40 32 25 150 111 35 Other Pharmaceuticals 422 396 7 1,522 1,660 (8) CONSUMER HEALTH CARE 217 225 (4) 1,085 1,026 6 OTC 121 147 (17) 578 588 (2) OTC Claritin 75 97 (22) 419 432 (3) FOOT CARE 79 68 16 331 292 13 SUN CARE 17 10 68 176 146 20 ANIMAL HEALTH 230 214 8 770 697 10 CONSOLIDATED NET SALES $2,184 $1,948 12 $8,272 $8,334 (1) ====== ====== ======= ======
N/M - not a meaningful percentage * Includes international sales of Claritin Rx only. Canadian sales of Claritin are reported in the OTC Claritin line within Consumer Health Care. The prior period has been reclassified accordingly. NOTE: Certain prior period amounts have been reclassified to conform to the current year presentation. Additional information about U.S. and international sales for specific products is available by calling the company or visiting the investor relations Web site at http://ir.schering-plough.com. - 12 - SCHERING-PLOUGH CORPORATION Reconciliation of Non-U.S. GAAP Financial Measure Adjusted net sales, defined as net sales plus an assumed 50 percent of global cholesterol joint venture net sales.
Three-Months Ended December 31 (unaudited) ------------------------------ (Dollars in Millions) 2004 2003 - --------------------- ----- ------ NET SALES, AS REPORTED $2,184 $1,948 Net Sales, Cholesterol Joint Venture 400 163 50 percent of Cholesterol Joint Venture Net Sales 200 82 Adjusted net sales $2,384 $2,030 ====== ======
Three-Months Ended September 30 (unaudited) ------------------------------- (Dollars in Millions) 2004 2003 - --------------------- ------ ------- NET SALES, AS REPORTED $1,978 $ 1,998 Net Sales, Cholesterol Joint Venture 340 135 50 percent of Cholesterol Joint Venture Net Sales 170 68 Adjusted net sales $2,148 $ 2,066 ====== =======
NOTE: Adjusted net sales, defined as net sales plus an assumed 50 percent of global cholesterol joint venture net sales, is a non-U.S. GAAP measure used by management in evaluating the performance of the company's overall business. The company believes that this performance measure contributes to a more complete understanding by investors of the overall results of the company. The company provides this information to supplement the reader's understanding of the importance to the company of its share of results from the operations of the cholesterol joint venture. Net sales (excluding the cholesterol joint venture net sales) is required to be presented under U.S. GAAP. The cholesterol joint venture's net sales are included as a component of operating profits in the calculation of the company's "Equity income from cholesterol joint venture." EX-99.2 3 y05004exv99w2.txt SUPPLEMENTAL FINANCIAL DATA Exhibit 99.2 SCHERING-PLOUGH CORPORATION STATEMENTS OF CONSOLIDATED OPERATIONS (DOLLARS IN MILLIONS, EXCEPT EPS) (UNAUDITED)
2004 ---------------------------------------------------------------------------------- 1st 2nd 6 3rd 9 4th 4th Qtr. 12 Mos. Qtr. Qtr. Mos. Qtr. Mos. Qtr. Year vs vs $ $ $ $ $ $ $ 4th Qtr. 12 Mos. ---------------------------------------------------------------------------------- Net Sales 1,963 2,147 4,110 1,978 6,088 2,184 8,272 12% (1%) Cost of Sales 740 790 1,530 711 2,241 829 3,070 12% 8% ---------------------------------------------------------------------------------- Gross Margin 1,223 1,357 2,580 1,267 3,847 1,355 5,202 12% (5%) Total SG&A 914 979 1,893 892 2,785 1,026 3,811 25% 10% Research & Development 1/ 372 451 824 378 1,201 406 1,607 3% 9% Other, Net 36 43 78 34 112 33 146 N/M N/M Special Charges 2/ 70 42 112 26 138 15 153 (93%) (74%) Equity (Income)/Loss from Cholesterol Joint Venture (78) (77) (154) (95) (249) (98) (347) N/M N/M --------------------------------------------------------------------------------- (Loss)/Income before Income Taxes (91) (81) (173) 32 (140) (27) (168) 87% N/M Income Tax (Benefit)/ Expense 3/ (18) (16) (35) 6 (28) 807 779 N/M N/M --------------------------------------------------------------------------------- Net (Loss)/Income (73) (65) (138) 26 (112) (834) (947) N/M N/M ================================================================================= Dividends on Preferred Shares - - - 12 12 22 34 N/M N/M Net (Loss)/Income Available to Common Shareholders (73) (65) (138) 14 (124) (856) (981) N/M N/M ================================================================================= Diluted (Loss)/Earnings per Common Share (0.05) (0.04) (0.09) 0.01 (0.08) (0.58) (0.67) N/M N/M ================================================================================= Avg. Shares Outstanding - Diluted 1,471 1,472 1,471 1,475 1,472 1,473 1,472 Actual Shares Outstanding 1,472 1,472 1,472 1,472 1,472 1,474 1,474 ------------------------------------------------------------- Ratios To Net Sales Net Sales 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Cost of Sales 37.7% 36.8% 37.2% 35.9% 36.8% 37.9% 37.1% Gross Margin 62.3% 63.2% 62.8% 64.1% 63.2% 62.1% 62.9% Total SG&A 46.6% 45.6% 46.1% 45.1% 45.7% 47.0% 46.1% Research & Development 19.0% 21.0% 20.0% 19.1% 19.7% 18.6% 19.4% (Loss)/Income Before Income Taxes (4.6%) (3.8%) (4.2%) 1.6% (2.3%) (1.3%) (2.0%) Income Taxes (Benefit)/ Expense (0.9%) (0.8%) (0.8%) 0.3% (0.5%) 37.0% 9.4% Net (Loss)/Income (3.7%) (3.0%) (3.4%) 1.3% (1.8%) (38.2%) (11.4%) -------------------------------------------------------------
2003 ------------------------------------------------------------ 1st 2nd 6 3rd 9 4th Qtr. Qtr. Mos. Qtr. Mos. Qtr. Year $ $ $ $ $ $ $ ------------------------------------------------------------ Net Sales 2,082 2,308 4,389 1,998 6,386 1,948 8,334 Cost of Sales 658 784 1,442 652 2,094 739 2,833 ------------------------------------------------------------ Gross Margin 1,424 1,524 2,947 1,346 4,292 1,209 5,501 Total SG&A 843 938 1,780 873 2,653 821 3,474 Research & Development 1/ 322 369 691 382 1,074 395 1,469 Other, Net 13 (4) 8 41 49 10 59 Special Charges 2/ - 20 20 350 370 229 599 Equity (Income)/Loss from Cholesterol Joint Venture 30 (26) 4 (24) (21) (33) (54) ------------------------------------------------------------ (Loss)/Income before Income Taxes 216 227 444 (276) 167 (213) (46) Income Tax (Benefit)/ Expense 43 45 89 (11) 77 (32) 46 ------------------------------------------------------------ Net (Loss)/Income 173 182 355 (265) 90 (181) (92) ============================================================ Dividends on Preferred Shares - - - - - - - Net (Loss)/Income Available to Common Shareholders 173 182 355 (265) 90 (181) (92) ============================================================ Diluted (Loss)/Earnings per Common Share 0.12 0.12 0.24 (0.18) 0.06 (0.12) (0.06) ============================================================ Avg. Shares Outstanding - Diluted 1,470 1,471 1,471 1,469 1,470 1,470 1,469 Actual Shares Outstanding 1,469 1,469 1,469 1,469 1,469 1,471 1,471 ------------------------------------------------------------ Ratios To Net Sales Net Sales 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Cost of Sales 31.6% 34.0% 32.9% 32.6% 32.8% 37.9% 34.0% Gross Margin 68.4% 66.0% 67.1% 67.4% 67.2% 62.1% 66.0% Total SG&A 40.5% 40.6% 40.6% 43.7% 41.5% 42.1% 41.7% Research & Development 15.5% 16.0% 15.8% 19.1% 16.8% 20.3% 17.6% (Loss)/Income Before Income Taxes 10.4% 9.8% 10.1% (13.8%) 2.6% (11.0%) (0.6%) Income Taxes (Benefit)/ Expense 2.1% 2.0% 2.0% (0.6%) 1.2% (1.6%) 0.5% Net (Loss)/Income 8.3% 7.9% 8.1% (13.3%) 1.4% (9.3%) (1.1%) -----------------------------------------------------------
Note: The Company noted that it incurs substantial costs, such as selling, general and administrative costs, that are not reflected in the "Equity income from cholesterol joint venture" and are borne by the overall cost structure of Schering-Plough. 1/ Research and development costs includes an $80 million upfront payment recognized in the second quarter of 2004 in conjunction with the licensing from Toyama Chemical Company Ltd. of Garenoxacin, a Quinolone antibiotic in development. 2/ Special Charges for the fourth quarter ended December 31, 2004 included $8 million of employee termination costs and $7 million of closure costs associated with the exit from a small European research-and-development facility. Special charges for the twelve months ended December 31, 2004 included $119 million of employee termination costs, as well as $27 million of asset impairment charges and $7 million of closure costs primarily related to the aforementioned research-and-development facility. Special Charges for 2003 included $20 million of asset impairment charges related to manufacturing facility assets recorded in the second quarter, the $350 million provision to increase litigation reserves recorded in the third quarter and $179 million of employee termination costs, primarily related to the VERP in the United States, as well as $50 million of asset impairment charges related to certain fixed and intangible assets recorded in the fourth quarter. 3/ In the fourth quarter ended December 31, 2004, the Company recorded the impact of the intended repatriation of funds under the American Jobs Creation Act. For the full year 2003, the effective tax rate was 15% excluding the $350 million non-tax deductible provision to increase litigation reserves. All figures rounded. Totals may not add due to rounding. N/M - not a meaningful percentage. Page 1 SCHERING-PLOUGH CORPORATION CONSOLIDATED SALES (DOLLARS IN MILLIONS)
2004 ------------------------------------------------------------------- 1st 2nd 6 3rd 9 4th 4th Qtr. 12 Mos. Qtr. Qtr. Mos. Qtr. Mos. Qtr. Year vs vs $ $ $ $ $ $ $ 4th Qtr. 12 Mos. - ------------------------------------------------------------------------------------------- PRESCRIPTION PHARM: 1,481 1,644 3,125 1,556 4,681 1,737 6,417 15% (3%) U.S. 411 495 906 518 1,424 584 2,007 37% (16%) International 1,070 1,150 2,220 1,037 3,257 1,153 4,410 7% 4% - ------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------- CONSUMER HEALTH CARE: 312 317 629 239 868 217 1,085 (4%) 6% OTC: 157 150 306 150 456 121 578 (17%) (2%) OTC Claritin * 117 117 234 110 344 75 419 (22%) (3%) Other OTC 40 32 72 41 112 46 159 (8%) 2% FOOT CARE: 76 89 166 86 252 79 331 16% 13% --- ---- Sun Care: 79 78 157 3 160 17 176 68% 20% --- ---- - ------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------- Animal Health: 170 186 356 183 539 230 770 8% 10% ---- ---- U.S. 41 36 77 56 133 61 194 (10%) (11%) International 129 150 279 127 406 169 575 16% 20% ---- ---- - ------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------- TOTAL CONSOLIDATED: 1,963 2,147 4,110 1,978 6,088 2,184 8,272 12% (1%) ----- ----- ----- ----- ----- ----- ----- U.S. 738 827 1,565 800 2,365 854 3,219 20% (10%) International 1,225 1,320 2,545 1,178 3,723 1,330 5,053 8% 6% ----- ----- - -------------------------------------------------------------------------------------------
2003 ------------------------------------------------- 1st 2nd 6 3rd 9 4th Qtr. Qtr. Mos. Qtr. Mos. Qtr. Year $ $ $ $ $ $ $ - ------------------------------------------------------------------------- PRESCRIPTION PHARM: 1,646 1,871 3,517 1,585 5,101 1,509 6,611 U.S. 643 757 1,401 549 1,950 426 2,376 International 1,003 1,113 2,116 1,035 3,151 1,083 4,235 - ------------------------------------------------------------------------- - ------------------------------------------------------------------------- CONSUMER HEALTH CARE: 293 266 559 243 802 225 1,026 OTC: 157 135 291 149 441 147 588 OTC Claritin * 129 97 225 111 336 97 432 Other OTC 28 38 66 38 105 50 156 FOOT CARE: 62 83 145 80 224 68 292 Sun Care: 74 48 123 14 137 10 146 - ------------------------------------------------------------------------- - ------------------------------------------------------------------------- Animal Health: 143 171 313 170 483 214 697 U.S. 45 49 94 57 150 68 218 International 98 122 220 113 333 146 479 - ------------------------------------------------------------------------- - ------------------------------------------------------------------------- TOTAL CONSOLIDATED: 2,082 2,308 4,389 1,998 6,386 1,948 8,334 ----- ----- ----- ----- ----- ----- ------ U.S. 965 1,047 2,012 836 2,848 712 3,559 International 1,116 1,261 2,378 1,162 3,539 1,236 4,775 - -------------------------------------------------------------------------
* Includes net sales of Claritin in Canada. Notes: Certain prior period amounts have been reclassified to conform to the current year presentation. All figures rounded. Totals may not add due to rounding. N/M - not a meaningful percentage. Page 2 SCHERING-PLOUGH CORPORATION PRESCRIPTION PHARMACEUTICAL SALES - KEY PRODUCT SALES (DOLLARS IN MILLIONS)
GLOBAL PRESCRIPTION PHARM U.S. INTERNATIONAL ------------------------- --------------------------- -------------------------- 2004 2003 2004 2003 2004 2003 ------------- -------------- -------------- 4th 4th 4th Qtr. 4th 4th 4th Qtr. 4th 4th 4th Qtr. Qtr. Qtr. vs Qtr. Qtr. vs Qtr. Qtr. vs $ $ 4th Qtr. $ $ 4th Qtr. $ $ 4th Qtr. ------------------------- --------------------------- -------------------------- PRESCRIPTION PHARM: 1,737 1,509 15% 584 426 37% 1,153 1,083 7% Remicade 212 159 33% -- -- -- 212 159 33% Clarinex / Aerius 162 133 22% 107 93 15% 55 40 38% Temodar 150 87 72% 79 39 100% 72 48 49% Nasonex 145 132 10% 81 78 5% 64 55 17% PEG-Intron 138 162 (15%) 42 76 (45%) 96 85 12% Integrilin 81 46 75% 74 40 86% 7 6 8% Claritin Rx 1) 80 81 (1%) -- -- -- 80 81 (1%) Intron A 79 107 (26%) 29 37 (22%) 50 70 (28%) Subutex 50 41 21% -- -- -- 50 41 21% Rebetol 49 100 (51%) -- 18 N/M 57 81 (29%) Avelox 2) 44 -- N/M 44 -- N/M -- -- N/M Cipro 2) 43 -- N/M 43 -- N/M -- -- N/M Elocon 42 33 27% 9 3 N/M 32 30 10% Caelyx 40 32 25% -- -- -- 40 32 25% ------------------------- --------------------------- --------------------------
1) Includes international net sales of Claritin Rx only. Canadian sales of Claritin are reported in the OTC Claritin line within Consumer Health Care. Prior periods have been reclassified accordingly. 2) Includes net sales in Puerto Rico Notes: Global cholesterol franchise net sales totaled $403 million in the 2004 fourth quarter consisting of Zetia net sales of $328 million and Vytorin net sales of $75 million. Global cholesterol franchise net sales totaled $165 million in the 2003 fourth quarter, which consisted solely of net sales of Zetia. U.S. net sales of Zetia/Vytorin were $333 million in the 2004 fourth quarter, consisting of $274 million of Zetia net sales and $59 million Vytorin net sales. Certain prior period amounts have been reclassified to conform to the current year presentation. All figures rounded. Totals may not add due to rounding. N/M - not a meaningful percentage. SCHERING-PLOUGH CORPORATION GLOBAL PRESCRIPTION PHARMACEUTICAL SALES - KEY PRODUCT SALES (DOLLARS IN MILLIONS)
2004 2003 -------------------------------------------------------------------------------------------------------------------- 1st 2nd 6 3rd 9 4th 1st 2nd 6 3rd 9 4th 4th Qtr. 12 Mos. Qtr. Qtr. Mos. Qtr. Mos. Qtr. Year Qtr. Qtr. Mos. Qtr. Mos. Qtr. Year vs vs $ $ $ $ $ $ $ $ $ $ $ $ $ $ 4th Qtr. 12 Mos. -------------------------------------------------------------------------------------------------------------------- GLOBAL PRESCRIPTION PHARM: 1,481 1,644 3,125 1,556 4,681 1,737 6,417 1,646 1,871 3,517 1,585 5,101 1,509 6,611 15% (3%) Remicade 165 182 347 188 535 212 746 114 126 240 142 382 159 540 33% 38% Clarinex / Aerius 130 226 356 175 530 162 692 173 219 392 169 561 133 694 22% 0% Temodar 86 102 188 121 309 150 459 59 87 146 90 237 87 324 72% 42% Nasonex 140 156 296 153 449 145 594 79 175 254 114 368 132 500 10% 19% PEG-Intron 148 144 293 132 425 138 563 221 247 469 172 641 162 802 (15%) (30%) Integrilin 73 78 151 94 245 81 325 89 92 181 79 260 46 306 75% 6% Claritin Rx 1) 91 82 173 67 240 80 321 89 90 179 68 247 81 328 (1%) (2%) Intron A 69 89 158 81 239 79 318 74 125 199 103 302 107 409 (26%) (22%) Subutex 44 47 91 45 136 50 185 31 36 66 37 103 41 144 21% 29% Rebetol 99 88 187 52 239 49 287 219 196 415 125 540 100 639 (51%) (55%) Avelox 2) - - - - - 44 44 - - - - - - - N/M N/M Cipro 2) - - - - - 43 43 - - - - - - - N/M N/M Elocon 38 46 84 42 127 42 168 39 41 80 41 121 33 154 27% 9% Caelyx 34 35 70 39 109 40 150 22 26 49 30 78 32 111 25% 35% --------------------------------------------------------------------------------------------------------------------
1) Includes international net sales of Claritin Rx only. Canadian net sales of Claritin are reported in the OTC Claritin line within Consumer Health Care. Prior periods have been reclassified accordingly. 2) Includes net sales in Puerto Rico. Notes: Global cholesterol franchise net sales, which include Zetia and Vytorin, totaled $403 million in the 2004 fourth quarter and $1.2 billion for the 2004 year compared with net sales of $165 million and $471 million, respectively, in 2003. Global net sales of Zetia totaled $328 million in the 2004 fourth quarter and $1.1 billion for the 2004 year compared with net sales of $165 million and $471 million, respectively in 2003. Global net sales of Vytorin totaled $75 million in the 2004 Fourth Quarter and $131 million for the 2004 year. U.S. net sales of Zetia and Vytorin were $333 million in the 2004 fourth quarter, consisting of $274 million of Zetia net sales and $59 million of Vytorin net sales. Certain prior period amounts have been reclassified to conform to the current year presentation. All figures rounded. Totals may not add due to rounding. N/M - not a meaningful percentage. SCHERING-PLOUGH CORPORATION U.S. PHARMACEUTICAL SALES - KEY PRODUCT SALES (DOLLARS IN MILLIONS)
2004 2003 ---------------------------------------------------------------------------------------------------------- 1st 2nd 6 3rd 9 4th 1st 2nd 6 3rd 9 4th 4th Qtr. 12 Mos. Qtr. Qtr. Mos. Qtr. Mos. Qtr. Year Qtr. Qtr. Mos. Qtr. Mos. Qtr. Year vs vs $ $ $ $ $ $ $ $ $ $ $ $ $ $ 4th Qtr. 12 Mos. ---------------------------------------------------------------------------------------------------------- TOTAL U.S. PHARM: 411 495 906 518 1,424 584 2,007 643 757 1,401 549 1,950 426 2,376 37% (16%) Clarinex / Aerius 69 126 195 118 313 107 420 133 144 277 128 405 93 498 15% (16%) Temodar 37 45 82 60 142 79 220 26 48 73 47 120 39 159 100% 39% Nasonex 82 85 167 104 271 81 353 34 115 149 74 223 78 301 5% 17% PEG-Intron 63 50 113 49 163 42 205 126 146 272 85 358 76 434 (45%) (53%) Integrilin 68 72 139 88 228 74 301 84 87 171 73 244 40 284 86% 6% Intron A 18 33 51 30 81 29 109 15 54 69 38 107 37 144 (22%) (24%) Rebetol 31 23 53 - 54 - 45 136 102 238 50 288 18 306 N/M (85%) Avelox 1) - - - - - 44 44 - - - - - - - N/M N/M Cipro 1) - - - - - 43 43 - - - - - - - N/M N/M Elocon 7 12 19 12 31 9 40 10 11 21 12 33 3 37 N/M 9% ----------------------------------------------------------------------------------------------------------
1) Includes net sales in Puerto Rico. Notes: U.S. net sales of Zetia and Vytorin were $333 million in the 2004 fourth quarter, consisting of $274 million of Zetia net sales and $59 million of Vytorin net sales. U.S. net sales of Zetia and Vytorin for year-to-date 2004 were $1.0 billion consisting of $910 million of Zetia and $102 million of Vytorin net sales. All figures rounded. Totals may not add due to rounding. N/M - not a meaningful percentage. SCHERING-PLOUGH CORPORATION INTERNATIONAL PHARMACEUTICAL SALES - KEY PRODUCT SALES (DOLLARS IN MILLIONS)
2004 2003 ------------------------------------------------------------------------------------------------------------------- 1st 2nd 6 3rd 9 4th 1st 2nd 6 3rd 9 4th 4th Qtr. 12 Mos. Qtr. Qtr. Mos. Qtr. Mos. Qtr. Year Qtr. Qtr. Mos. Qtr. Mos. Qtr. Year vs vs $ $ $ $ $ $ $ $ $ $ $ $ $ $ 4th Qtr. 12 Mos. ------------------------------------------------------------------------------------------------------------------- TOTAL INTERNATIONAL PHARM: 1,070 1,150 2,220 1,037 3,257 1,153 4,410 1,003 1,113 2,116 1,035 3,151 1,083 4,235 7% 4% Remicade 165 182 347 188 535 212 746 114 126 240 142 382 159 540 33% 38% Clarinex / Aerius 61 100 161 57 218 55 272 41 75 116 41 157 40 196 38% 39% Temodar 49 57 106 61 168 72 239 34 40 73 44 117 48 165 49% 45% Nasonex 58 71 129 48 178 64 242 44 60 105 39 144 55 199 17% 22% PEG-Intron 85 94 179 83 262 96 358 95 101 196 87 283 85 368 12% (3%) Integrilin 5 6 12 5 17 7 24 5 5 10 6 16 6 22 8% 9% Claritin Rx 91 82 173 67 240 80 321 89 90 179 68 247 81 328 (1%) (2%) Intron A 51 56 107 51 158 50 208 59 71 130 65 195 70 265 (28%) (21%) Subutex 44 47 91 45 136 50 185 31 36 66 37 103 41 144 21% 29% Rebetol 68 65 133 52 185 57 242 83 94 177 75 252 81 333 (29%) (27%) Elocon 31 34 65 31 96 32 128 29 30 58 29 88 30 117 10% 10% Caelyx 34 35 70 39 109 40 150 22 26 49 30 78 32 111 25% 35% -------------------------------------------------------------------------------------------------------------------
Notes: International cholesterol franchise net sales totaled $70 million in the 2004 fourth quarter, consisting of $54 million of Zetia net sales and $16 million of Vytorin net sales. International cholesterol franchise net sales for 2004 were $171 million, consisting of $142 million of Zetia net sales and $29 million of Vytorin net sales. All figures rounded. Totals may not add due to rounding. N/M - not a meaningful percentage. SCHERING-PLOUGH CORPORATION MISCELLANEOUS DATA (DOLLARS IN MILLIONS)
2004 2003 ------------------------------------------------------------------------------------------------- 1st 2nd 6 3rd 9 4th 1st 2nd 6 3rd 9 4th Qtr. Qtr. Mos. Qtr. Mos. Qtr. Year Qtr. Qtr. Mos. Qtr. Mos. Qtr. Year $ $ $ $ $ $ $ $ $ $ $ $ $ $ ------------------------------------------------------------------------------------------------- GEOGRAPHIC SALES U.S. 738 827 1,565 800 2,365 854 3,219 965 1,047 2,012 836 2,848 712 3,559 EUROPE AND CANADA 874 972 1,846 820 2,666 929 3,595 777 935 1,711 849 2,560 849 3,410 LATIN AMERICA 174 182 356 204 560 223 782 171 163 334 184 517 199 716 PACIFIC AREA AND ASIA 177 166 343 154 497 178 676 169 163 332 129 461 188 649 CONSOLIDATED SALES 1,963 2,147 4,110 1,978 6,088 2,184 8,272 2,082 2,308 4,389 1,998 6,386 1,948 8,334 ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -------------------------------------------------------------------------------------------------
2004 2003 -------------------------------------------------------------------------------------------------- 1st 2nd 6 3rd 9 4th 1st 2nd 6 3rd 9 4th Qtr. Qtr. Mos. Qtr. Mos. Qtr. Year Qtr. Qtr. Mos. Qtr. Mos. Qtr. Year $ $ $ $ $ $ $ $ $ $ $ $ $ $ -------------------------------------------------------------------------------------------------- CONSOLIDATED SALES GROWTH RATES: As Reported (6%) (7%) (6%) (1%) (5%) 12% (1%) (19%) (19%) (19%) (17%) (18%) (18%) (18%) Excluding Exchange (12%) (10%) (11%) (4%) (9%) 8% (5%) (23%) (24%) (24%) (21%) (23%) (24%) (23%) OTHER, NET Interest Income $14 $15 $29 $20 $50 $31 $80 $13 $15 $28 $9 $37 $20 $57 Interest Expense (48) (43) (91) (39) (130) (38) (168) (13) (12) (25) (24) (49) (32) (81) FX Gains/(Losses) (1) (4) (4) 0 (4) (1) (5) (1) - (1) 1 (1) - (1) Other Income/(Expense) (1) (11) (12) (15) (28) (25) (53) (12) 1 (10) (27) (36) 2 (34) --- ---- ---- ---- ---- ---- ---- ---- -- ---- ---- ---- -- ---- Total - Other, Net ($36) ($43) ($78) ($34) ($112) ($33) ($146) ($13) $4 ($8) ($41) ($49) ($10) ($59) EFFECTIVE TAX RATE 20% 20% 20% 20% 20% * * 20% 20% 20% ** ** 15% ** --------------------------------------------------------------------------------------------------
* In the 2004 fourth quarter, the company recorded the tax impact of the intended repatriation of funds under the American Job Creations Act. ** In the 2003 third quarter, the company reduced its estimate of the 2003 annual effective tax rate to 15% from 20% on income, excluding the $350 million non-tax deductible provision to increase litigation reserves. Note: All figures rounded. Totals may not add due to rounding. N/M - not a meaningful percentage. Alex Kelly 908-298-7450 Janet M. Barth 908-298-7417 -----END PRIVACY-ENHANCED MESSAGE-----