8-K

0000950123-08-008120.txt : 20080721 0000950123-08-008120.hdr.sgml : 20080721 20080721165829 ACCESSION NUMBER: 0000950123-08-008120 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20080721 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080721 DATE AS OF CHANGE: 20080721 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: 08961690 BUSINESS ADDRESS: STREET 1: 2000 GALLOPING HILL ROAD CITY: KENILWORTH STATE: NJ ZIP: 07033 BUSINESS PHONE: 9082984000 MAIL ADDRESS: STREET 1: 2000 GALLOPING HILL ROAD CITY: KENILWORTH STATE: NJ ZIP: 07033 8-K 1 y63200e8vk.htm FORM 8-K 8-K

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): July 21, 2008

SCHERING-PLOUGH CORPORATION

(Exact Name of Registrant as Specified in its Charter)


New Jersey (State or Other Jurisdiction of Incorporation)		1-6571 (Commission File Number)		22-1918501 (IRS Employer 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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o 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 Second Quarter of 2008” 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

Terje R. Pedersen, M.D., Professor of Medicine, the lead independent investigator in the SEAS study, today issued a press release titled “Results from the SEAS (Simvastatin and Ezetimibe in Aortic Stenosis) study.” The SEAS study investigated the effects of intensive cholesterol lowering with the combination of simvastatin and ezetimibe (marketed as VYTORIN by the Merck/Schering-Plough joint venture) in patients with aortic stenosis. This press release is furnished as Exhibit 99.3 to this 8-K.

The University of Oxford Clinical Trial Service Unit and Epidemiological Studies Unit (CTSU) today issued a press release titled “Independent Analyses of the SEAS, SHARP and IMPROVE-IT Studies of Ezetimibe.” CTSU conducted and interpreted an independent analysis of data in the SEAS study, the SHARP (Study of Heart and Renal Protection) study and the IMPROVE-IT (IMProved Reduction of Outcomes: Vytorin Efficacy International Trial) study. This press release is furnished as Exhibit 99.4 to this 8-K.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits

99.1		Press release dated July 21, 2008 titled “Schering-Plough Reports Financial Results for Second Quarter of 2008”

99.2		Supplemental Financial Data

99.3		Press release dated July 21, 2008 titled “Results From the SEAS (Simvastatin and Ezetimibe in Aortic Stenosis) Study”

99.4		Press release dated July, 2008 titled “Independent Analysis of the SEAS, SHARP and IMPROVE-IT studies of Ezetimibe”

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/ Steven H. Koehler
	Steven H. Koehler
	Vice President and Controller

Date: July 21, 2008

Exhibit Index


Exhibit
Number		Description

99.1		Press release dated July 21, 2008 titled “Schering-Plough Reports Financial Results for Second Quarter of 2008”

99.2		Supplemental Financial Data

99.3		Press release dated July 21, 2008 titled “Results From the SEAS (Simvastatin and Ezetimibe in Aortic Stenosis) Study”

99.4		Press release dated July, 2008 titled “Independent Analysis of the SEAS, SHARP and IMPROVE-IT studies of Ezetimibe”

EX-99.1 2 y63200exv99w1.htm EX-99.1: PRESS RELEASE EX-99.1

Exhibit 99.1


		Media Contact		Schering-Plough
		Steve Galpin, Jr.		2000 Galloping Hill Road
		+1 908 298 7415		Kenilworth, New Jersey 07033-0530
		Investor Contacts		www.schering-plough.com
		Alex Kelly
		Janet M. Barth
		Joe Romanelli
		+1 908 298 7436

		For Release: IMMEDIATELY

SCHERING-PLOUGH REPORTS FINANCIAL RESULTS FOR SECOND QUARTER OF 2008

Broad-based Performance and Robust Phase III Pipeline
Validate Growth and Diversification Strategy;
OBS Acquisition Already Contributing to Results

KENILWORTH, N.J., July 21, 2008 — Schering-Plough Corporation (NYSE: SGP) today reported financial results for the second quarter of 2008.

“We are very pleased to see another quarter of strong performance and broad-based growth for our company,” said Fred Hassan, chairman and CEO. “Through the Action Agenda we launched in 2003, we were determined to diversify our company and to build a deep Phase III pipeline. Today, we are succeeding on both fronts. Our Phase III pipeline is now the strongest in our company’s history, and the $16 billion acquisition of Organon BioSciences in November 2007 has already met its accretion target for 2008.” The company had estimated an accretion target of 10 cents per share for the first full year of combined operations when the Organon BioSciences (OBS) acquisition was announced in March 2007.

He noted that Schering-Plough’s successful geographic diversification strategy has resulted in strong sales growth — and approximately 70 percent of sales in the 2008 second quarter — being generated outside the U.S. Adding business diversity are the Animal Health and Consumer Health Care businesses, which in the quarter represented about 25 percent of sales on a combined GAAP net sales basis. Said Hassan, “The combination of our broad portfolio, robust R&D pipeline and geographic breadth positions us well in this difficult environment.”

For the 2008 second quarter, Schering-Plough reported net income available to common shareholders of $398 million or 24 cents per common share on a GAAP basis. Earnings per common share for the 2008 second quarter would have been 45 cents on a reconciled basis, which excludes purchase accounting adjustments, special and acquisition-related items, and income from termination of a respiratory joint venture with Merck. For the 2007 second quarter, Schering-Plough

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reported net income available to common shareholders of $517 million or 34 cents per common share on a GAAP basis and 41 cents per common share on a reconciled basis.

GAAP net sales for the 2008 second quarter totaled $4.9 billion, up 55 percent as compared to the second quarter of 2007. Sales for the quarter benefited from the inclusion of OBS net sales as well as a favorable impact from foreign exchange. Net sales of the global cholesterol joint venture, which include VYTORIN and ZETIA, totaled $1.1 billion in the 2008 second quarter. Schering-Plough does not record sales of its cholesterol joint venture with Merck as the venture is accounted for under the equity method. Including an adjustment of an assumed 50 percent of the global cholesterol joint venture net sales, Schering-Plough’s adjusted sales for the 2008 second quarter would have been $5.5 billion.

Regarding second quarter results, Hassan said, “While the overall U.S. prescription market continues to get tougher, we achieved good sales growth internationally, with strong results for REMICADE, NASONEX and TEMODAR.”

Commenting on REMICADE, he said, “We were proud in 2006 to see this life-changing medicine go past the $1 billion sales mark in our territories — and excited now to see it currently annualizing past the $2 billion mark. As we look at the future of our company, we are counting on our anti-inflammatory agents REMICADE and golimumab to be key assets and contributors to our long-term performance.”

On the cholesterol franchise, he said, “We remain confident in VYTORIN and ZETIA and the ability of these medicines to help patients get to lower LDL cholesterol goals.” The company noted that VYTORIN has been shown to be the most effective medicine for lowering LDL (“bad”) cholesterol in head-to-head clinical trials versus rosuvastatin, atorvastatin or simvastatin alone, and to get more patients to goal at the usual starting dose and across the dosing range.

Said Hassan: “As we go forward, we will continue taking decisive actions to strengthen this company and pursue our basic strategy: grow the top line, grow the pipeline, reduce costs and invest wisely.” He expressed confidence about the company’s future, pointing to its robust Phase III research pipeline and long exclusivity periods for key marketed products that offer protection well

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into the next decade. He cited such Phase III compounds as a thrombin receptor antagonist (TRA) for atherothrombosis; boceprevir, a protease inhibitor for hepatitis C; and vicriviroc for HIV.

			He also cited such nearer-term opportunities as:

	•		Golimumab, a subcutaneous treatment for inflammatory diseases, filed for once-monthly dosing for three arthritic indications in the EU;

	•		Sugammadex, an exciting agent that may change the practice of anesthesia, currently under regulatory review in the U.S. (unanimous positive advisory committee recommendation received), EU (positive opinion issued) and Japan; and

	•		Asenapine, an agent under review by the U.S. Food and Drug Administration (FDA) for treatment of schizophrenia and acute bipolar disorder.

PRODUCTIVITY TRANSFORMATION PROGRAM (PTP)

Hassan reviewed progress with the Productivity Transformation Program (PTP), which also incorporates the ongoing integration of OBS. PTP was launched in April 2008.

“Thanks to the hard work of the people of the newly combined Schering-Plough, we are successfully integrating the acquired OBS units while continuing to advance our R&D pipeline and achieve impressive savings via our PTP actions,” said Hassan.

“PTP is more than just about cutting costs. Our aim is to streamline operations, make optimal use of our resources, and retain the strength and flexibility to capture and invest in new business and pipeline opportunities.”

PTP is expected to realize savings of about 10 percent or $1.5 billion of the company’s full-year 2007 cost base (including OBS) by the end of 2012, with $1.25 billion in savings targeted to be accomplished by 2010. The $1.5 billion target includes $500 million of previously announced integration synergy targets from the OBS acquisition. The company is on track to achieve these savings targets.

Second Quarter 2008 Results

For the 2008 second quarter, Schering-Plough reported net income available to common shareholders of $398 million or 24 cents per common share on a GAAP basis. Earnings per common share for the 2008 second quarter would have been 45 cents on net income of $731 million on a reconciled basis, which excludes purchase accounting adjustments, special and acquisition-related items, and $64 million of income from termination of a respiratory joint venture

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with Merck. For the 2007 second quarter, Schering-Plough reported net income available to common shareholders of $517 million or 34 cents per common share on a GAAP basis and 41 cents per common share on a reconciled basis.

GAAP net sales for the 2008 second quarter totaled $4.9 billion, including $1.4 billion as a result of the OBS acquisition. The overall sales increase includes the impact of the OBS net sales and an estimated favorable impact of 7.6 percent from foreign exchange on stand-alone Schering-Plough sales.

Global cholesterol joint venture net sales, which include VYTORIN and ZETIA, totaled $1.1 billion, a decrease of 9 percent when compared to the second quarter of 2007. Schering-Plough does not record sales of its cholesterol joint venture with Merck as the venture is accounted for under the equity method. Including an adjustment of an assumed 50 percent of the global cholesterol joint venture net sales, Schering-Plough’s adjusted sales for the 2008 second quarter would have been $5.5 billion.

Overall, Schering-Plough shares in approximately 50 percent of the profits of the joint venture with Merck, although there are different profit-sharing arrangements for the cholesterol products in countries around the world. Schering-Plough records its share of the income from operations in “Equity income,” which totaled $493 million in the 2008 second quarter, as compared to $490 million in the second quarter of 2007. Included in second quarter 2008 GAAP equity income is $64 million of income related to the termination of the respiratory joint venture. Schering-Plough noted that it incurs substantial costs such as selling, general and administrative costs that are not reflected in “Equity income” and are borne by its overall cost structure. There is a separate co-marketing agreement with Bayer for ZETIA in Japan, where the product was launched in June 2007.

Sales of Global Pharmaceuticals for the 2008 second quarter totaled $3.7 billion. Included in the second quarter of 2008 are $921 million in net sales related to Organon, the OBS human health business acquired in 2007.

Sales of REMICADE increased 41 percent to $557 million in the second quarter of 2008 due to continued market growth, expanded use and a favorable impact from foreign exchange. REMICADE is a treatment for inflammatory diseases that Schering-Plough markets in countries outside the United States (except in Japan and certain other Asian markets) for rheumatoid arthritis, early rheumatoid arthritis, ankylosing spondylitis, psoriatic arthritis, plaque psoriasis, Crohn’s disease, pediatric Crohn’s disease and ulcerative colitis.

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Global sales of NASONEX, an inhaled nasal corticosteroid for allergies, rose 6 percent to $311 million versus the 2007 period, due to increased sales in international markets, partially offset by a decline in U.S. sales.

Sales of TEMODAR, a treatment for certain types of brain tumors, grew 16 percent to $251 million due to increased demand in most geographic regions.

Sales of PEGINTRON for hepatitis C decreased 2 percent to $229 million in the 2008 second quarter.

Sales in the women’s health franchise, including fertility and contraception products, grew to exceed $500 million in the 2008 second quarter. Franchise sales in the 2008 second quarter were led by FOLLISTIM/PUREGON, a fertility treatment, with sales of $162 million, and NUVARING, a contraceptive product, with sales of $116 million. Both products were obtained as part of the OBS acquisition.

Global sales of CLARINEX, a nonsedating antihistamine, in the second quarter of 2008 were $240 million, down 4 percent as compared to sales of $250 million in the second quarter of 2007, primarily due to lower sales in the U.S.

International sales of prescription CLARITIN were $111 million in the second quarter of 2008, an 8 percent increase compared to sales of $102 million in the second quarter of 2007 due primarily to foreign exchange.

Sales of AVELOX, an antibiotic marketed in the U.S., were down 12 percent to $67 million primarily reflecting a weaker respiratory tract infection season.

Animal Health sales totaled $818 million in the 2008 second quarter. Included in the second quarter of 2008 were net sales of $526 million related to products from the acquired OBS animal health business. Sales benefited from solid growth in all geographic regions, including in Europe where the company recently launched a vaccine for bluetongue disease (Bovilis BTV8). Bluetongue disease is a devastating disease of cattle and sheep caused by a virus which was first identified in Northern Europe in 2006. The newly combined animal health organization also achieved sales growth in products for cattle and poultry. Animal Health sales also benefited from foreign exchange.

Consumer Health Care sales were $401 million in the 2008 second quarter, up 2 percent versus the 2007 period. The increase was mainly due to higher sales of MIRALAX, launched in February 2007, partially offset by lower sales of OTC CLARITIN, due to the timing of shipments, a less severe allergy season and increased competition.

Schering-Plough does not record sales of its cholesterol joint venture and incurs substantial costs such as selling, general and administrative costs that are not reflected in “Equity income” and

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are borne by the overall cost structure of Schering-Plough. As a result, Schering-Plough’s gross margin and ratios of selling, general and administrative (SG&A) expenses and R&D expenses as a percentage of sales do not reflect the benefit of the impact of the cholesterol joint venture’s operating results.

Schering-Plough’s gross margin on a GAAP basis was unfavorably affected by purchase accounting adjustments and as a result was 61.2 percent for the 2008 second quarter as compared to 69.3 percent in the 2007 period. The gross margin percentage excluding purchase accounting adjustments was 68.4 percent in the second quarter of 2008.

SG&A expenses were $1.9 billion in the second quarter of 2008 versus $1.4 billion in the prior-year period. SG&A in the second quarter of 2008 increased primarily due to the impact of the inclusion of SG&A expenses from OBS and foreign exchange.

Research and development spending for the 2008 second quarter increased to $906 million compared to $696 million in the second quarter of 2007. Included in R&D spending in the second quarter of 2007 was $60 million related to an upfront payment made for licensing transactions. The increase in R&D expenses was due to the inclusion of OBS expenses, higher spending for clinical trials and related activities, and investments to build greater breadth and capacity to support Schering-Plough’s expanding R&D pipeline.

Recent Developments

The company also offered the following summary of recent significant developments that have previously been announced, including:

	•		Announced the purchase by Chairman/CEO Fred Hassan of just over $2 million of Schering-Plough common stock. (Announced April 24)

	•		Schering-Plough/Merck Pharmaceuticals announced receipt of a not-approvable letter from the U.S. FDA for a fixed combination of loratadine and montelukast. (Announced April 25)

	•		Reported results from an interim analysis of an ongoing Phase II study of boceprevir, an investigational oral hepatitis C protease inhibitor, at the European Association for the Study of the Liver (EASL). (Announced April 26)

	•		Presented final results of the IDEAL study, the first large, randomized, clinical study comparing the leading therapies for chronic hepatitis C, at EASL. (Announced April 26)

	•		Launched bluetongue vaccine (Bovilis BTV8) in certain European countries. (Announced April 30)

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	•		Presented an overview of asenapine clinical trials from the Olympia program at the American Psychiatric Association. (Announced May 8)

	•		Announced the initiation of two large Phase III studies of boceprevir in patients chronically infected with genotype 1 HCV. (Announced May 21)

	•		Gained positive opinion of sugammadex by the Committee for Medicinal Products for Human Use of the European Medicines Agency. (Announced June 2)

	•		Presented data showing that sugammadex reversed moderate rocuronium- and vecuronium-induced muscle relaxation considerably faster than the current standard of care at the European Society of Anesthesiology meeting. (Announced June 2)

	•		Schering-Plough/Merck Pharmaceuticals announced termination of its respiratory joint venture. (Announced June 27)

	•		Closed transaction with Virbac to divest certain animal health products. (Announced July 2)

	•		Announced that corifollitropin alfa, an experimental, sustained follicle stimulant, met its primary endpoints in the Phase III ENGAGE trial. (Announced July 8)

	•		Announced publication in The Lancet of Phase III trial results of long-term treatment of stage III melanoma with pegylated interferon alfa-2b. (Announced July 11)

	•		Received marketing approval in Japan for NASONEX Nasal Spray for the treatment of allergic rhinitis in adult patients (Announced July 17)

Second Quarter 2008 Conference Call and Webcast

Schering-Plough will conduct a conference call today at 4:45 p.m. (EDT) to review the 2008 second quarter results. To listen live to the call, dial 1-877-565-9664 or 1-706-634-5003 and enter conference ID #50992673. A replay of the call will be available beginning later on July 21 through 5 p.m. on July 28. To listen to the replay, dial 1-800-642-1687 or 1-706-645-9291 and enter the conference ID #50992673. 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 on July 21 through 5 p.m. on Aug. 20.

DISCLOSURE NOTICE: The information in this press release, the comments of Schering-Plough officers during the earnings teleconference/webcast on July 21, 2008, beginning at 4:45 p.m. (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 Private Securities Litigation Reform Act of 1995. Forward-looking statements do not relate strictly to historical or current facts and are based on current expectations or forecasts of future events. You can identify these forward-looking statements by their use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “project,” “intend,” “plan,” “potential,” “will,” and other similar words

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and terms. In particular, forward-looking statements include statements relating to the company’s plans; its strategies; its progress under the Action Agenda and anticipated timing regarding future performance of the Action Agenda; business prospects; anticipated growth; timing and level of savings achieved from the Productivity Transformation Program, including the ongoing integration of OBS; prospective products or product approvals; trends in performance; anticipated timing of clinical trials and its impact on R&D spending; anticipated exclusivity periods; actions to enhance clinical, R&D, manufacturing and post-marketing systems; and the potential of products and trending in therapeutic markets, including the cholesterol market. Actual results may vary materially from the company’s forward-looking statements, and there are no guarantees about the performance of Schering-Plough stock or Schering-Plough’s business. Schering-Plough does not assume the obligation to update any forward-looking statement. A number of risks and uncertainties could cause results to differ materially from forward-looking statements, including, among other uncertainties, market viability of the company’s (and the cholesterol joint venture’s) marketed and pipeline products; market forces; economic factors such as interest rate and exchange rate fluctuations; the outcome of contingencies such as litigation and investigations including litigation and investigations relating to the ENHANCE clinical trial; product availability; patent and other intellectual property protection; current and future branded, generic or over-the-counter competition; the regulatory process (including product approvals, labeling and post-marketing actions); scientific developments relating to marketed products or pipeline projects; and media and societal reaction to such developments. For further details of these and other risks and uncertainties that may impact forward-looking statements, see Schering-Plough’s Securities and Exchange Commission filings, including Item 1A, “Risk Factors” in the company’s first quarter 2008 10-Q.

Schering-Plough is an innovation-driven, science-centered global health care company. Through its own biopharmaceutical research and collaborations with partners, Schering-Plough creates therapies that help save and improve lives around the world. The company applies its research-and-development platform to human prescription and consumer products as well as to animal health products. Schering-Plough’s vision is to “Earn Trust, Every Day” with the doctors, patients, customers and other stakeholders served by its colleagues around the world. The company is based in Kenilworth, N.J., and its Web site is www.schering-plough.com.

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SCHERING-PLOUGH CORPORATION

U.S. GAAP report for the second quarter ended June 30 (unaudited):
(Amounts in millions, except per share figures)


	Second Quarter						Six Months
	2008			2007			2008			2007

Net sales 1/	$	4,921		$	3,178		$	9,577		$	6,153
Cost of sales 2/		1,908			977			4,044			1,913
Selling, general and administrative		1,870			1,358			3,547			2,572
Research and development 3/		906			696			1,786			1,403
Other expense/(income), net 4/		134			(16	)		229			(62	)
Special and acquisition-related charges 5/		94			11			117			12
Equity income 6/		(493	)		(490	)		(1,010	)		(978	)


Income before income taxes		502			642			864			1,293
Income tax expense		66			103			138			190

Net income	$	436		$	539		$	726		$	1,103


Preferred stock dividends		38			22			75			43

Net income available to common shareholders	$	398		$	517		$	651		$	1,060


Diluted earnings per common share	$	0.24		$	0.34		$	0.40		$	0.70


Average shares outstanding — diluted		1,632			1,587			1,635			1,579

The company incurs substantial costs related to the cholesterol joint venture, such as selling, general and administrative costs, that are not reflected in the “Equity income” and are borne by the overall cost structure of Schering-Plough.


1/		Net sales for the three and six months ended June 30, 2008, include sales of $1.4 billion and $2.8 billion, respectively, from Organon BioSciences (OBS) which was acquired on November 19, 2007.

2/		Cost of sales for the three and six months ended June 30, 2008 include purchase accounting adjustments of $354 million and $1.0 billion, respectively, related to the acquisition of OBS.

3/		Research and development for the three and six months ended June 30, 2007 include $60 million and $156 million, respectively, related to upfront R&D payments.

4/		Included in other expense/(income), net for the three and six months ended June 30, 2007 were mark-to-market losses of $35 million and $31 million, respectively, related to a Euro denominated currency option related to the acquisition of OBS.

5/		Special and acquisition-related charges relate to the Productivity Transformation Program (PTP) which also incorporates the ongoing integration of OBS. For the three and six months ended June 30, 2008 these charges were $94 million ($77 million for severance costs and $17 million for integration-related costs) and $117 million, respectively. Special and acquisition-related charges for the three and six months ended June 30, 2007 was $11 million and $12 million, respectively.

6/		Included in Equity income is $64 million of income related to the termination of a respiratory joint venture with Merck.

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SCHERING-PLOUGH CORPORATION

Reconciliation from Reported Net Income Available to Common Shareholders
and Reported Diluted Earnings Per Common Share to As Reconciled Amounts for Net Income
Available to Common Shareholders and Diluted Earnings per Common Share
(Amounts in Millions, except per share figures)

To supplement its consolidated financial statements presented in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), Schering-Plough is providing the supplemental financial information below and on the following pages to reflect “As Reconciled” amounts related to Net income available to common shareholders and Diluted earnings per common share. “As Reconciled” amounts exclude the effects of purchase accounting adjustments, special and acquisition-related items and other specified items.

“As Reconciled” amounts related to Net income available to common shareholders and Diluted earnings per common share are non-U.S. GAAP measures used by management in evaluating the performance of Schering-Plough’s overall business. The effects of purchase accounting adjustments, special and acquisition-related items and other specified items have been excluded from Net income available to common shareholders and Diluted earnings per common share as management of Schering-Plough does not consider these charges to be indicative of continuing operating results. Schering-Plough believes that these “As Reconciled” performance measures contribute to a more complete understanding by investors of the overall results of the company and enhances investor understanding of items that impact the comparability of results between fiscal periods. Net income available to common shareholders and Diluted earnings per common share, as reported, are required to be presented under U.S. GAAP.


	Three months ended June 30, 2008
	(unaudited)
				Purchase			Special and Acquisition-			Other
	As			Accounting			Related			Specified			As
	Reported			Adjustments			Items			Items			Reconciled(1)


Net sales	$	4,921		$	—		$	—		$	—		$	4,921
Cost of sales		1,908			(354	)		—			—			1,554
Selling, general and administrative		1,870			(1	)		—			—			1,869
Research and development		906			(2	)		—			—			904
Other expense/(income), net		134			—			—			—			134
Special and acquisition-related charges		94			—			(94	)		—			—
Equity income		(493	)		—			—			64			(429	)


Income before income taxes		502			357			94			(64	)		889
Income tax expense/(benefit)		66			(47	)		(7	)		—			120


Net income	$	436		$	310		$	87		$	(64	)	$	769


Preferred stock dividends		38			—			—			—			38

Net income available to common shareholders	$	398		$	310		$	87		$	(64	)	$	731


Diluted earnings per common share	$	0.24											$	0.45


Average shares outstanding-diluted		1,632												1,632

(1) “As Reconciled” to exclude purchase accounting adjustments, special and acquisition-related items and other specified items.

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SCHERING-PLOUGH CORPORATION


	Three months ended June 30, 2007
	(unaudited)
	As			Purchase Accounting		Special and Acquisition- Related			Other Specified			As
	Reported			Adjustments		Items			Items			Reconciled(1)

Net sales	$	3,178		$	—	$	—		$	—		$	3,178
Cost of sales		977			—		—			—			977
Selling, general and administrative		1,358			—		—			—			1,358
Research and development		696			—		—			(60	)		636
Other expense/(income), net		(16	)		—		(35	)		—			(51	)
Special and acquisition-related charges		11			—		(11	)		—			—
Equity income		(490	)		—		—			—			(490	)


Income before income taxes		642			—		46			60			748
Income tax expense		103			—		—			—			103


Net income	$	539		$	—	$	46		$	60		$	645


Preferred stock dividends		22			—		—			—			22

Net income available to common shareholders	$	517		$	—	$	46		$	60		$	623


Diluted earnings per common share	$	0.34										$	0.41


Average shares outstanding-diluted		1,587											1,587

(1) “As Reconciled” to exclude purchase accounting adjustments, special and acquisition-related items and other specified items.

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SCHERING-PLOUGH CORPORATION


	Six months ended June 30, 2008
	(unaudited)
	As			Purchase Accounting			Special and Acquisition- Related			Other Specified			As
	Reported			Adjustments			Items			Items			Reconciled(1)

Net sales	$	9,577		$	—		$	—		$	—		$	9,577
Cost of sales		4,044			(1,042	)		—			—			3,002
Selling, general and administrative		3,547			(2	)		—			—			3,545
Research and development		1,786			(4	)		—			—			1,782
Other expense/(income), net		229			—			—			17			246
Special and acquisition-related charges		117			—			(117	)		—			—
Equity income		(1,010	)		—			—			64			(946	)


Income before income taxes		864			1,048			117			(81	)		1,948
Income tax expense/(benefit)		138			(138	)		(9	)		5			280


Net income	$	726		$	910		$	108		$	(76	)	$	1,668


Preferred stock dividends		75			—			—			—			75

Net income available to common shareholders	$	651		$	910		$	108		$	(76	)	$	1,593


Diluted earnings per common share	$	0.40											$	0.97


Average shares outstanding-diluted		1,635												1,635

(1) “As Reconciled” to exclude purchase accounting adjustments, special and acquisition-related items and other specified items.

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SCHERING-PLOUGH CORPORATION


	Six months ended June 30, 2007
	(unaudited)
	As			Purchase Accounting		Special and Acquisition- Related			Other Specified			As
	Reported			Adjustments		Items			Items			Reconciled(1)

Net sales	$	6,153		$	—	$	—		$	—		$	6,153
Cost of sales		1,913			—		—			—			1,913
Selling, general and administrative		2,572			—		—			—			2,572
Research and development		1,403			—		—			(156	)		1,247
Other expense/(income), net		(62	)		—		(31	)		—			(93	)
Special and acquisition-related charges		12			—		(12	)		—			—
Equity income		(978	)		—		—			—			(978	)


Income before income taxes		1,293			—		43			156			1,492
Income tax expense/(benefit)		190			—		—			—			190


Net income	$	1,103		$	—	$	43		$	156		$	1,302


Preferred stock dividends		43			—		—			—			43

Net income available to common shareholders	$	1,060		$	—	$	43		$	156		$	1,259


Diluted earnings per common share	$	0.70										$	0.82


Average shares outstanding-diluted		1,579											1,579

(1) “As Reconciled” to exclude purchase accounting adjustments, special and acquisition-related items and other specified items.

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SCHERING-PLOUGH CORPORATION

“As Reconciled” amounts related to Net income available to common shareholders and Diluted earnings per common share reflect the following adjustments:


	Second Quarter					Six Months
	(unaudited)					(unaudited)
	2008			2007		2008			2007
Purchase accounting adjustments:
Amortization of intangibles in connection with the acquisition of Organon BioSciences (a)	$	138		$	—	$	270		$	—
Depreciation related to the fair value adjustment of fixed assets related to the acquisition of Organon BioSciences (b)		8			—		16			—
Charge related to the fair value adjustment to inventory related to the acquisition of Organon BioSciences (a)		211			—		762			—

Total purchase accounting adjustments, pre-tax		357			—		1,048			—
Income tax benefit		47			—		138			—

Total purchase accounting adjustments	$	310		$	—	$	910		$	—


Special and acquisition-related items:
Special and integration-related activities (e)	$	94			11	$	117		$	12
Acquisition-related gains on currency-related items (d)		—		$	35		—			31

Total special and acquisition-related items, pre-tax		94			46		117			43
Income tax benefit		7			—		9			—

Total special and acquisition-related items	$	87		$	46	$	108		$	43


Other specified items:
Income from respiratory JV termination (f)	$	(64	)	$	—	$	(64	)	$	—
(Gain) on sale of manufacturing plant (d)		—			—		(17	)		—
Upfront R&D payments (c)		—			60		—			156

Total other specified items, pre-tax		(64	)		60		(81	)		156
Income tax expense		—			—		(5	)		—

Total other specified items	$	(64	)	$	60	$	(76	)	$	156


Total purchase accounting adjustments, special and acquisition-related items and other specified items	$	333		$	106	$	942		$	199


(a)		Included in Cost of sales

(b)		Included in Cost of sales, Selling, general and administrative and Research and development

(c)		Included in Research and development

(d)		Included in Other expense/(income), net

(e)		Included in Special and acquisition-related charges

(f)		Included in Equity income

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SCHERING-PLOUGH CORPORATION

Report for the period ended June 30 (unaudited):

GAAP Net Sales by Key Product


(Dollars in millions)	Second Quarter							Six Months
	2008		2007		%			2008		2007		%

HUMAN PRESCRIPTION PHARMACEUTICALS a/	$	3,702	$	2,520		47	%	$	7,259	$	4,918		48	%
REMICADE		557		394		41	%		1,064		767		39	%
NASONEX		311		295		6	%		618		579		7	%
TEMODAR		251		216		16	%		487		412		18	%
CLARINEX / AERIUS		240		250		(4	%)		454		455		—
PEGINTRON		229		234		(2	%)		454		451		1	%
FOLLISTIM/PUREGON c/		162		—		—			308		—		—
NUVARING c/		116		—		—			212		—		—
CLARITIN RX		111		102		8	%		239		214		11	%
INTEGRILIN		78		78		—			152		163		(7	%)
CAELYX		78		65		20	%		152		127		20	%
REBETOL		70		74		(5	%)		130		146		(11	%)
ZEMURON c/		67		—		—			130		—		—
AVELOX		67		75		(12	%)		209		191		10	%
SUBUTEX / SUBOXONE		62		52		18	%		115		108		7	%
REMERON c/		61		—		—			129		—		—
INTRON A		61		55		10	%		116		115		1	%
LIVIAL c/		50		—		—			95		—		—
CERAZETTE c/		49		—		—			93		—		—
ASMANEX		48		42		16	%		91		85		7	%
MERCILON c/		47		—		—			90		—		—
ELOCON		47		43		10	%		92		79		16	%
IMPLANON c/		44		—		—			82		—		—
MARVELON c/		40		—		—			77		—		—
PROVENTIL / ALBUTEROL CFC		38		61		(37	%)		89		114		(22	%)
NOXAFIL		38		20		91	%		72		36		101	%
FORADIL		25		26		(1	%)		51		52		(2	%)
Other Pharmaceuticals		755		438		72	%		1,458		824		77	%

ANIMAL HEALTH b/		818		264		210	%		1,540		496		211	%

CONSUMER HEALTH CARE		401		394		2	%		778		739		5	%
OTC		181		182		(1	%)		389		359		8	%
OTC CLARITIN		120		137		(12	%)		258		264		(2	%)
MiraLAX		28		6		N/M			54		14		N/M
Other OTC		33		39		(16	%)		77		81		(5	%)
Foot Care		105		102		3	%		190		180		5	%
Sun Care		115		110		5	%		199		200		(1	%)


CONSOLIDATED GAAP NET SALES	$	4,921	$	3,178		55	%	$	9,577	$	6,153		56	%


a/		Human Prescription Pharmaceuticals Net sales for the three and six months ended June 30, 2008 include net sales of $921 million and $1.8 billion, respectively, from the human health segment of Organon BioSciences (OBS), which was acquired on November 19, 2007.

b/		Animal Health Net sales for the three and six months ended June 30, 2008 include net sales of $526 million and $980 million, respectively, from the animal health segment of OBS, which was acquired on November 19, 2007.

c/		Products acquired in OBS acquisition on November 19, 2007.


NOTE:		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.

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SCHERING-PLOUGH CORPORATION

Reconciliation of Non-U.S. GAAP Financial Measures

Adjusted net sales, defined as Net sales plus an assumed 50 percent of global cholesterol joint venture net sales.


	Three months ended June 30,
(Dollars in millions)	(unaudited)
	2008		2007		%

Net sales, as reported a/	$	4,921	$	3,178		55	%
50 percent of cholesterol joint venture net sales b/		566		624		(9	%)

Adjusted net sales b/	$	5,487	$	3,802		44	%


	Six months ended June 30,
(Dollars in millions)	(unaudited)
	2008		2007		%

Net sales, as reported a/	$	9,577	$	6,153		56	%
50 percent of cholesterol joint venture net sales b/		1,174		1,199		(2	%)

Adjusted net sales b/	$	10,751	$	7,352		46	%


a/		Net sales for the three and six months ended June 30, 2008 include sales from Organon BioSciences (OBS) which was acquired on November 19, 2007.

b/		Total Net sales of the cholesterol joint venture for the three months ended June 30, 2008 and 2007 were $1.1 billion and $1.2 billion, respectively. Total Net sales of the cholesterol joint venture for the six months ended June 30, 2008 and 2007 were $2.3 billion and $2.4 billion, respectively.

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 Schering-Plough’s overall business. Schering-Plough believes that this performance measure contributes to a more complete understanding by investors of the overall results of the company. Schering-Plough 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 income from operations in the calculation of Schering-Plough’s “Equity income.” Net sales of the cholesterol joint venture do not include net sales of cholesterol products in non-joint venture territories.

# # #

EX-99.2 3 y63200exv99w2.htm EX-99.2: SUPPLEMENTAL FINANCIAL DATA EX-99.2

Exhibit 99.2

SCHERING-PLOUGH CORPORATION
STATEMENTS OF CONSOLIDATED OPERATIONS
(U.S. GAAP and As Reconciled)
(Amounts in Millions, except per share figures)
(Unaudited)


	2008			2007			2008			2007			2nd Qtr			2008			2007			2008			2007			6 Mos.
	2nd Qtr			2nd Qtr			2nd Qtr			2nd Qtr			vs.			Six Months			Six Months			Six Months			Six Months			vs.
	U.S.			U.S.			* As			* As			2nd Qtr			U.S.			U.S.			* As			* As			6 Mos.
	GAAP			GAAP			Reconciled			Reconciled			As			GAAP			GAAP			Reconciled			Reconciled			As
	$			$			$			$			Reconciled			$			$			$			$			Reconciled

Net sales 1/		4,921			3,178			4,921			3,178			55	%		9,577			6,153			9,577			6,153			56	%

Cost of sales		1,908			977			1,554			977			59	%		4,044			1,913			3,002			1,913			57	%

Gross profit		3,013			2,201			3,367			2,201			53	%		5,533			4,240			6,575			4,240			55	%

Selling, general and administrative		1,870			1,358			1,869			1,358			38	%		3,547			2,572			3,545			2,572			38	%
Research and development		906			696			904			636			42	%		1,786			1,403			1,782			1,247			43	%
Other expense/(income), net		134			(16	)		134			(51	)		N/M			229			(62	)		246			(93	)		N/M
Special and acquisition-related charges		94			11			—			—			N/M			117			12			—			—			N/M
Equity income		(493	)		(490	)		(429	)		(490	)		(12	%)		(1,010	)		(978	)		(946	)		(978	)		(3	%)

Income before income taxes		502			642			889			748			19	%		864			1,293			1,948			1,492			31	%

Income tax expense		66			103			120			103			17	%		138			190			280			190			47	%

Net income		436			539			769			645			19	%		726			1,103			1,668			1,302			28	%

Preferred stock dividends		38			22			38			22			73	%		75			43			75			43			74	%

Net income available to common shareholders		398			517			731			623			17	%		651			1,060			1,593			1,259			27	%

Diluted earnings per common share		0.24			0.34			0.45			0.41			10	%		0.40			0.70			0.97			0.82			18	%

Avg. shares outstanding — diluted		1,632			1,587			1,632			1,587						1,635			1,579			1,635			1,579


Ratios to net sales

Net sales		100.0	%		100.0	%		100.0	%		100.0	%					100.0	%		100.0	%		100.0	%		100.0	%

Cost of sales		38.8	%		30.7	%		31.6	%		30.7	%					42.2	%		31.1	%		31.3	%		31.1	%

Gross margin		61.2	%		69.3	%		68.4	%		69.3	%					57.8	%		68.9	%		68.7	%		68.9	%

Selling, general and administrative		38.0	%		42.7	%		38.0	%		42.7	%					37.0	%		41.8	%		37.0	%		41.8	%

Research and development		18.4	%		21.9	%		18.4	%		20.0	%					18.6	%		22.8	%		18.6	%		20.3	%

Income before income taxes		10.2	%		20.2	%		18.1	%		23.5	%					9.0	%		21.0	%		20.3	%		24.2	%

Net income		8.9	%		17.0	%		15.6	%		20.3	%					7.6	%		17.9	%		17.4	%		21.2	%


1/		Net sales for the three and six months ended June 30, 2008 include sales of Organon BioSciences (OBS) of $1.4 billion and $2.8 billion, respectively.

*		“As Reconciled” to exclude purchase accounting adjustments, special and acquisition-related items and other specified items. See Non-GAAP Reconciliation tables posted on the Schering-Plough website at www.Schering-Plough.com under “Investor Relations/Financial Highlights.”

N/M-		Not a meaningful percentage.

All figures rounded. Totals may not add due to rounding. Percentages based on unrounded figures.

Page 1

SCHERING-PLOUGH CORPORATION
STATEMENTS OF CONSOLIDATED OPERATIONS
(U.S. GAAP)
(Amounts in Millions, except per share figures)
(Unaudited)


	2008												2007
	1st			2nd			3rd	4th	6			Full	1st			2nd			3rd			4th			6			Full			2nd Qtr			6 Mos.
	Qtr.			Qtr.			Qtr.	Qtr.	Mos.			Year	Qtr.			Qtr.			Qtr.			Qtr.			Mos.			Year			vs			vs
	$			$			$	$	$			$	$			$			$			$			$			$			2nd Qtr			6 Mos.

Net sales 1/		4,657			4,921					9,577				2,975			3,178			2,812			3,724			6,153			12,690			55	%		56	%

Cost of sales 2/		2,137			1,908					4,044				937			977			925			1,566			1,913			4,405			95	%		111	%

Gross profit		2,520			3,013					5,533				2,038			2,201			1,887			2,158			4,240			8,285			37	%		31	%

Selling, general and administrative		1,676			1,870					3,547				1,213			1,358			1,262			1,634			2,572			5,468			38	%		38	%
Research and development 3/		880			906					1,786				707			696			669			855			1,403			2,926			30	%		27	%
Acquired in-process research and development 4/		—			—					—				—			—			—			3,754			—			3,754			N/M			N/M
Other expense/(income), net		95			134					229				(48	)		(16	)		(390	)		(231	)		(62	)		(683	)		N/M			N/M
Special and acquisition-related charges 5/		23			94					117				1			11			20			52			12			84			N/M			N/M
Equity income 6/		(517	)		(493	)				(1,010	)			(487	)		(490	)		(506	)		(566	)		(978	)		(2,049	)		1	%		3	%

Income/(loss) before income taxes		363			502					864				652			642			832			(3,340	)		1,293			(1,215	)		(22	%)		(33	%)

Income tax expense/(benefit)		72			66					138				87			103			82			(14	)		190			258			(36	%)		(27	%)

Net income/(loss)		291			436					726				565			539			750			(3,326	)		1,103			(1,473	)		(19	%)		(34	%)

Preferred stock dividends		38			38					75				22			22			37			38			43			118			73	%		74	%

Net income/(loss) available to common shareholders		253			398					651				543			517			713			(3,364	)		1,060			(1,591	)		(23	%)		(39	%)

Diluted earnings/(loss) per common share		0.15			0.24					0.40				0.36			0.34			0.45			(2.08	)		0.70			(1.04	)


Avg. shares outstanding- diluted		1,637			1,632					1,635				1,571			1,587			1,622			1,621			1,579			1,536
Actual shares outstanding		1,621			1,626					1,626				1,489			1,496			1,620			1,621			1,496			1,621


Ratios to net sales

Net sales		100.0	%		100.0	%				100.0	%			100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Cost of sales		45.9	%		38.8	%				42.2	%			31.5	%		30.7	%		32.9	%		42.1	%		31.1	%		34.7	%

Gross margin		54.1	%		61.2	%				57.8	%			68.5	%		69.3	%		67.1	%		57.9	%		68.9	%		65.3	%

Selling, general and administrative		36.0	%		38.0	%				37.0	%			40.8	%		42.7	%		44.9	%		43.9	%		41.8	%		43.1	%

Research and development		18.9	%		18.4	%				18.6	%			23.8	%		21.9	%		23.8	%		23.0	%		22.8	%		23.1	%

Income/(loss) before income taxes		7.8	%		10.2	%				9.0	%			21.9	%		20.2	%		29.6	%		(89.7	%)		21.0	%		(9.6	%)

Net income/(loss)		6.2	%		8.9	%				7.6	%			19.0	%		17.0	%		26.7	%		(89.3	%)		17.9	%		(11.6	%)


N/M-		Not a meaningful percentage

Note:		The Company incurs substantial costs, such as selling, general and administrative costs, that are not reflected in “Equity income” and are borne by the overall cost structure of Schering-Plough.

1/		Net sales for the three and six months ended June 30, 2008 include sales of Organon BioSciences (OBS) of $1.4 billion and $2.8 billion, respectively. Net sales for the twelve months ended December 31, 2007, include $626 million of OBS sales as of the November 19, 2007 close of the acquisition through December 31, 2007.

2/		Cost of sales for the three and six months ended June 30, 2008 include purchase accounting adjustments of $354 million and $1.0 billion, respectively, related to the acquisition of OBS. Cost of sales for the twelve months ended December 31, 2007 includes purchase accounting adjustments of $326 million related to the acquisition of OBS.

3/		Research and development for the three and six months ended June 30, 2007 includes $60 million and $156 million, respectively, related to upfront R&D payments. Research and development for the twelve months ended December 31, 2007 include $197 million related to upfront R&D payments.

4/		Acquired in-process research and development for the twelve months ended December 31, 2007 represents a charge of $3.8 billion in connection with the acquisition of OBS.

5/		Special and acquisition-related charges relate to the Productivity Transformation Program (PTP) activities which also incorporates the ongoing integration of OBS. For the three and six months ended June 30, 2008 these charges were $94 million ($77 million for severance costs and $17 million for integration-related costs) and $117 million, respectively. Special and acquisition-related charges for the three and six months ended June 30, 2007 was $11 million and $12 million, respectively. Special and acquisition-related charges for the twelve months ended December 31, 2007 were $84 million.

6/		Included in Equity Income is $64 million of income related to the termination of a respiratory joint venture with Merck.

All figures rounded. Totals may not add due to rounding. Percentages based on unrounded figures.

Page 2

SCHERING-PLOUGH CORPORATION
ANALYSIS OF NET SALES AND ADJUSTED NET SALES
(Dollars in Millions)


	2008									2007
	1st		2nd		3rd	4th	6		Full	1st		2nd		3rd		4th		6		Full		2nd Qtr			6 Mos.
	Qtr.		Qtr.		Qtr.	Qtr.	Mos.		Year	Qtr.		Qtr.		Qtr.		Qtr.		Mos.		Year		vs			vs
	$		$		$	$	$		$	$		$		$		$		$		$		2nd Qtr			6 Mos.

*Cholesterol Joint Venture:*		*1,216*		*1,133*				*2,348*			*1,150*		*1,248*		*1,277*		*1,443*		*2,397*		*5,119*		(9	%)		(2	%)
U.S.		851		710				1,561			897		958		969		1,071		1,854		3,894		(26	%)		(16	%)
International		365		423				787			253		290		308		372		543		1,225		45	%		45	%

*50% of Cholesterol Joint Venture:*		607		566				1,174			575		624		639		722		1,199		2,559		(9	%)		(2	%)


*Human Prescription Pharma (1):*		*3,557*		*3,702*				*7,259*			*2,398*		*2,520*		*2,291*		*2,963*		*4,918*		*10,173*		47	%		48	%
U.S.		975		926				1,899			802		771		709		855		1,573		3,138		20	%		21	%
International		2,582		2,776				5,360			1,596		1,749		1,582		2,108		3,345		7,035		59	%		60	%

*Animal Health (2):*		*723*		*818*				*1,540*			*232*		*264*		*248*		*507*		*496*		*1,251*		*210*	%		*211*	%
U.S.		131		138				269			58		58		63		99		116		278		139	%		132	%
International		592		680				1,271			174		206		185		408		380		973		230	%		235	%

*Consumer Health Care*		*377*		*401*				*778*			*345*		*394*		*273*		*254*		*739*		*1,266*		2	%		5	%

*Consolidated GAAP Net Sales:*		*4,657*		*4,921*				*9,577*			*2,975*		*3,178*		*2,812*		*3,724*		*6,153*		*12,690*		55	%		56	%

U.S.		1,453		1,434				2,885			1,179		1,195		1,028		1,194		2,374		4,597		20	%		22	%
International		3,204		3,487				6,692			1,796		1,983		1,784		2,530		3,779		8,093		76	%		77	%


*Adjusted Net Sales:*		*5,264*		*5,487*				*10,751*			*3,550*		*3,802*		*3,451*		*4,446*		*7,352*		*15,249*		44	%		46	%


(1)		Human Prescription Pharma Net sales for the three and six months ended June 30, 2008 include $921 million and $1.8 billion, respectively, of sales of the human health segment of Organon BioSciences (OBS). Human Prescription Pharma Net sales for both the fourth quarter and full year 2007 include $409 million of OBS human health segment sales as of the closing date of the acquisition on November 19, 2007 through December 31, 2007.

(2)		Animal Health Net sales for the three and six months ended June 30, 2008 includes $526 million and $980 million, respectively, of sales of the animal health segment of OBS. Animal Health Net sales for both the fourth quarter and full year 2007 include $217 million of OBS animal health segment sales as of the closing date of the acquisition on November 19, 2007 through December 31, 2007.

All figures rounded. Totals may not add due to rounding. Percentages based on unrounded figures.

Page 3

SCHERING-PLOUGH CORPORATION
CHOLESTEROL FRANCHISE NET SALES
(Dollars in Millions)


	2008									2007
	1st		2nd		3rd	4th	6		Full	1st		2nd		3rd		4th		6		Full		2nd Qtr			6 Mos.
	Qtr.		Qtr.		Qtr.	Qtr.	Mos.		Year	Qtr.		Qtr.		Qtr.		Qtr.		Mos.		Year		vs			vs
	$		$		$	$	$		$	$		$		$		$		$		$		2nd Qtr			6 Mos.

*Global Zetia (1):*		*588*		*578*				*1,166*			*544*		*605*		*606*		*680*		*1,149*		*2,436*		(5	%)		1	%

U.S.		395		349				745			408		424		443		489		832		1,764		(18	%)		(10	%)
International		193		229				421			136		181		163		191		317		672		26	%		33	%

*Global Vytorin (1):*		*647*		*586*				*1,233*			*616*		*683*		*684*		*778*		*1,299*		*2,761*		*(14*	%)		(5	%)

U.S.		456		361				816			489		534		526		582		1,022		2,130		(32	%)		(20	%)
International		191		225				417			127		149		158		196		277		631		51	%		51	%

*Global Cholesterol (1):*		*1,235*		*1,164*				*2,399*			*1,160*		*1,288*		*1,290*		*1,458*		*2,448*		*5,197*		*(10*	%)		(2	%)

U.S.		851		710				1,561			897		958		969		1,071		1,854		3,894		(26	%)		(16	%)
International		384		454				838			263		330		321		387		594		1,303		37	%		41	%


(1)		Substantially all sales of cholesterol products are not included in Schering-Plough’s Net sales. Global franchise sales include sales under the Merck/Schering-Plough joint venture, plus any sales that are not part of the joint venture, such as Schering-Plough sales of cholesterol products in Latin America and Japan. In Japan, Schering-Plough co-markets ZETIA with Bayer HealthCare. ZETIA was launched in Japan in June 2007. In the second quarter of 2008 and 2007, sales in non-joint venture territories of the cholesterol franchise totaled $31 million and $40 million, respectively. For the six months of 2008 and 2007 sales in non-joint venture territories of the cholesterol franchise totaled $50 million and $51 million, respectively.

The results of the operation of the joint venture are reflected in Equity income. As a result, Schering-Plough’s Gross margin and ratios of Selling, general and administrative expenses and R&D expenses as a percentage of sales do not reflect the benefit of the impact of the cholesterol joint venture’s operating results.

Schering-Plough utilizes the Equity method of accounting in recording its share of activity from the Merck/Schering-Plough cholesterol joint venture. Schering-Plough’s Net sales do not include the sales of the joint venture. The cholesterol joint venture agreements provide for the sharing of operating income generated by the joint venture based upon percentages that vary by product, sales level and country. Equity income also includes milestone and other payments. Either company’s share of the joint venture’s income from operations is subject to a reduction if that company fails to perform a specified minimum number of physician details in a particular country. The companies agree annually to the minimum number of physician details by country.

In the U.S. market, Schering-Plough receives a greater share of profits on the first $300 million of annual ZETIA sales. As such, Schering-Plough’s share of operating income from the joint venture in the first fiscal quarter is generally higher than subsequent quarters.

All figures rounded. Totals may not add due to rounding. Percentages based on unrounded figures.

Page 4

SCHERING-PLOUGH CORPORATION
PRESCRIPTION PHARMACEUTICAL SALES — KEY PRODUCT NET SALES
(Dollars in Millions)


	Global Prescription Pharma							U.S.							International
	2008		2007					2008		2007					2008		2007
	2nd		2nd		2nd Qtr			2nd		2nd		2nd Qtr			2nd		2nd		2nd Qtr
	Qtr.		Qtr.		vs			Qtr.		Qtr.		vs			Qtr.		Qtr.		vs
	$		$		2nd Qtr			$		$		2nd Qtr			$		$		2nd Qtr

*Human Prescription Pharma (1):*		*3,702*		*2,520*		47	%		*926*		*771*		20	%		*2,776*		*1,749*		59	%

Remicade		557		394		41	%		—		—		—			557		394		41	%
Nasonex		311		295		6	%		166		175		(5	%)		145		120		21	%
Temodar		251		216		16	%		82		79		3	%		169		137		24	%
Clarinex / Aerius		240		250		(4	%)		79		106		(25	%)		161		144		11	%
PegIntron		229		234		(2	%)		40		46		(13	%)		189		188		1	%
Follistim/Puregon (2)		162		—		—			45		—		—			117		—		—
Nuvaring (2)		116		—		—			68		—		—			48		—		—
Claritin Rx		111		102		8	%		—		—		—			111		102		8	%
Integrilin		78		78		—			73		73		(1	%)		5		5		—
Caelyx		78		65		20	%		—		—		—			78		65		20	%
Rebetol		70		74		(5	%)		—		1		—			70		73		(5	%)
Zemuron (2)		67		—		—			33		—		—			34		—		—
Avelox		67		75		(12	%)		67		75		(12	%)		—		—		—
Subutex / Suboxone		62		52		18	%		—		—		—			62		52		18	%
Remeron (2)		61		—		—			2		—		—			59		—		—
Intron A		61		55		10	%		29		28		3	%		32		27		17	%
Livial (2)		50		—		—			—		—		—			50		—		—
Cerazette (2)		49		—		—			—		—		—			49		—		—
Asmanex		48		42		16	%		45		39		16	%		3		3		—
Mercilon (2)		47		—		—			1		—		—			46		—		—
Elocon		47		43		10	%		1		—		—			46		43		8	%
Implanon (2)		44		—		—			14		—		—			30		—		—
Marvelon (2)		40		—		—			3		—		—			37		—		—
Proventil / Albuterol cfc		38		61		(37	%)		38		61		(37	%)		—		—		—
Noxafil		38		20		91	%		10		7		48	%		28		13		114	%
Foradil		25		26		(1	%)		24		25		(1	%)		1		1		—


(1)		Human Prescription Pharma Net sales for the three months ended June 30, 2008 include $921 million of sales of the human health segment of Organon BioSciences (OBS). U.S. Pharma and International Pharma include OBS human health segment sales of $209 million and $712 million, respectively.

(2)		Products acquired in OBS acquisition on November 19, 2007.

N/M — Not a meaningful percentage

All figures rounded. Totals may not add due to rounding. Percentages based on unrounded figures.

Page 5

SCHERING-PLOUGH CORPORATION
GLOBAL PRESCRIPTION PHARMACEUTICAL SALES — KEY PRODUCT NET SALES
(Dollars in Millions)


	2008									2007
	1st		2nd		3rd	4th	6		Full	1st		2nd		3rd		4th		6		Full		2nd Qtr			6 Mos.
	Qtr.		Qtr.		Qtr.	Qtr.	Mos.		Year	Qtr.		Qtr.		Qtr.		Qtr.		Mos.		Year		vs			vs
	$		$		$	$	$		$	$		$		$		$		$		$		2nd Qtr			6 Mos.

*Human Prescription Pharma (1):*		*3,557*		*3,702*				*7,259*			*2,398*		*2,520*		*2,291*		*2,963*		*4,918*		*10,173*		47	%		48	%

Remicade		507		557				1,064			373		394		426		455		767		1,648		41	%		39	%
Nasonex		307		311				618			284		295		242		271		579		1,092		6	%		7	%
Temodar		236		251				487			196		216		215		234		412		861		16	%		18	%
Clarinex / Aerius		213		240				454			204		250		171		174		455		799		(4	%)		—
PegIntron		225		229				454			217		234		221		239		451		911		(2	%)		1	%
Follistim/Puregon (2)		145		162				308			—		—		—		57		—		57		—			—
Nuvaring (2)		96		116				212			—		—		—		45		—		45		—			—
Claritin Rx		128		111				239			112		102		83		93		214		391		8	%		11	%
Integrilin		74		78				152			84		78		78		91		163		332		—			(7	%)
Caelyx		74		78				152			62		65		64		66		127		257		20	%		20	%
Rebetol		59		70				130			71		74		60		71		146		277		(5	%)		(11	%)
Zemuron (2)		63		67				130			—		—		—		25		—		25		—			—
Avelox		142		67				209			115		75		78		115		191		384		(12	%)		10	%
Subutex / Suboxone		54		62				115			56		52		55		57		108		220		18	%		7	%
Remeron (2)		68		61				129			—		—		—		33		—		33		—			—
Intron A		55		61				116			60		55		61		57		115		233		10	%		1	%
Livial (2)		45		50				95			—		—		—		24		—		24		—			—
Cerazette (2)		44		49				93			—		—		—		20		—		20		—			—
Asmanex		42		48				91			43		42		36		41		85		162		16	%		7	%
Mercilon (2)		43		47				90			—		—		—		18		—		18		—			—
Elocon		45		47				92			36		43		40		37		79		156		10	%		16	%
Implanon (2)		38		44				82			—		—		—		15		—		15		—			—
Marvelon (2)		37		40				77			—		—		—		20		—		20		—			—
Proventil / Albuterol cfc		50		38				89			53		61		52		41		114		207		(37	%)		(22	%)
Noxafil		34		38				72			16		20		24		29		36		89		91	%		101	%
Foradil		25		25				51			26		26		25		25		52		102		(1	%)		(2	%)


(1)		Human Prescription Pharma Net sales for the three and six months ended June 30, 2008 include $921 million and $1.8 billion, respectively, of sales of the human health segment of Organon BioSciences (OBS). Human Prescription Pharma Net sales for both the fourth quarter and full year 2007 include $409 million of OBS human health segment sales as of the closing date of the acquisition on November 19, 2007 through December 31, 2007.

(2)		Products acquired in OBS acquisition on November 19, 2007.

N/M — Not a meaningful percentage

All figures rounded. Totals may not add due to rounding. Percentages based on unrounded figures.

Page 6

SCHERING-PLOUGH CORPORATION
U.S. PHARMACEUTICAL SALES — KEY PRODUCT NET SALES
(Dollars in Millions)


	2008									2007
	1st		2nd		3rd	4th	6		Full	1st		2nd		3rd		4th		6		Full		2nd Qtr			6 Mos.
	Qtr.		Qtr.		Qtr.	Qtr.	Mos.		Year	Qtr.		Qtr.		Qtr.		Qtr.		Mos.		Year		vs			vs
	$		$		$	$	$		$	$		$		$		$		$		$		2nd Qtr			6 Mos.

*Total U.S. Pharma (1):*		*975*		*926*				*1,899*			*802*		*771*		*709*		*855*		*1,573*		*3,138*		20	%		21	%

Nasonex		172		166				338			177		175		153		162		352		667		(5	%)		(4	%)
Temodar		80		82				162			74		79		79		83		154		315		3	%		6	%
Clarinex / Aerius		76		79				156			91		106		83		82		197		362		(25	%)		(21	%)
PegIntron		39		40				79			49		46		46		42		95		183		(13	%)		(16	%)
Follistim/Puregon (2)		44		45				89			—		—		—		14		—		14		—			—
Nuvaring (2)		54		68				122			—		—		—		26		—		26		—			—
Integrilin		69		73				142			80		73		73		85		153		312		(1	%)		(8	%)
Zemuron (2)		34		33				67			—		—		—		10		—		10		—			—
Avelox		142		67				209			115		75		78		115		191		384		(12	%)		10	%
Remeron (2)		4		2				6			—		—		—		2		—		2		—			—
Intron A		27		29				56			31		28		29		28		59		117		3	%		(5	%)
Asmanex		39		45				85			40		39		34		38		80		152		16	%		7	%
Implanon (2)		11		14				26			—		—		—		3		—		3		—			—
Marvelon (2)		2		3				5			—		—		—		2		—		2		—			—
Proventil / Albuterol cfc		50		38				89			53		61		52		41		114		207		(37	%)		(22	%)
Noxafil		9		10				20			6		7		8		10		13		31		48	%		57	%
Foradil		24		24				49			25		25		24		24		50		98		(1	%)		(2	%)


(1)		U.S. Pharma Net sales for the three and six months ended June 30, 2008 include $209 million and $398 million, respectively, of sales of the human health segment of Organon BioSciences (OBS). U.S. Pharma Net sales for both the fourth quarter and full year 2007 include $84 million of OBS human health segment sales as of the closing date of the acquisition on November 19, 2007 through December 31, 2007.

(2)		Products acquired in OBS acquisition on November 19, 2007.

N/M — Not a meaningful percentage

All figures rounded. Totals may not add due to rounding. Percentages based on unrounded figures.

Page 7

SCHERING-PLOUGH CORPORATION
INTERNATIONAL PHARMACEUTICAL SALES — KEY PRODUCT NET SALES
(Dollars in Millions)


	2008									2007
	1st		2nd		3rd	4th	6		Full	1st		2nd		3rd		4th		6		Full		2nd Qtr			6 Mos.
	Qtr.		Qtr.		Qtr.	Qtr.	Mos.		Year	Qtr.		Qtr.		Qtr.		Qtr.		Mos.		Year		vs			vs
	$		$		$	$	$		$	$		$		$		$		$		$		2nd Qtr			6 Mos.

*Total International Pharma (1):*		*2,582*		*2,776*				*5,360*			*1,596*		*1,749*		*1,582*		*2,108*		*3,345*		*7,035*		59	%		60	%

Remicade		507		557				1,064			373		394		426		455		767		1,648		41	%		39	%
Nasonex		135		145				280			107		120		89		109		227		425		21	%		24	%
Temodar		156		169				325			122		137		136		151		258		546		24	%		26	%
Clarinex / Aerius		137		161				298			113		144		88		92		258		437		11	%		16	%
PegIntron		186		189				375			168		188		175		197		356		728		1	%		5	%
Follistim/Puregon (2)		101		117				219			—		—		—		43		—		43		—			—
Nuvaring (2)		42		48				90			—		—		—		19		—		19		—			—
Claritin Rx		128		111				239			112		102		83		93		214		391		8	%		11	%
Integrilin		5		5				10			4		5		5		6		10		20		—			—
Caelyx		74		78				152			62		65		64		66		127		257		20	%		20	%
Rebetol		59		70				129			71		73		59		70		144		273		(5	%)		(11	%)
Zemuron (2)		29		34				63			—		—		—		15		—		15		—			—
Subutex / Suboxone		54		62				115			56		52		55		57		108		220		18	%		7	%
Remeron (2)		64		59				123			—		—		—		31		—		31		—			—
Intron A		28		32				60			29		27		32		29		56		116		17	%		7	%
Livial (2)		45		50				95			—		—		—		24		—		24		—			—
Cerazette (2)		44		49				93			—		—		—		20		—		20		—			—
Asmanex		3		3				6			3		3		2		3		5		10		—			15	%
Mercilon (2)		42		46				88			—		—		—		18		—		18		—			—
Elocon		45		46				91			36		43		40		39		79		158		8	%		16	%
Implanon (2)		27		30				56			—		—		—		12		—		12		—			—
Marvelon (2)		35		37				72			—		—		—		18		—		18		—			—
Noxafil		25		28				52			10		13		16		19		23		58		114	%		126	%
Foradil		1		1				2			1		1		1		1		2		4		—			—


(1)		International Pharma Net sales for the three and six months ended June 30, 2008 include $712 million and $1.4 billion, respectively, of sales of the human health segment of Organon BioSciences (OBS). International Pharma Net sales for both the fourth quarter and full year 2007 include $325 million of OBS human health segment sales as of the closing date of the acquisition on November 19, 2007 through December 31, 2007.

(2)		Products acquired in OBS acquisition on November 19, 2007.

N/M — Not a meaningful percentage

All figures rounded. Totals may not add due to rounding. Percentages based on unrounded figures.

Page 8

SCHERING-PLOUGH CORPORATION
GLOBAL CONSUMER HEALTH CARE
NET SALES ANALYSIS
(Dollars in Millions)


	2008									2007
	1st		2nd		3rd	4th	6		Full	1st		2nd		3rd		4th		6		Full		2nd Qtr			6 Mos.
	Qtr.		Qtr.		Qtr.	Qtr.	Mos.		Year	Qtr.		Qtr.		Qtr.		Qtr.		Mos.		Year		vs			vs
	$		$		$	$	$		$	$		$		$		$		$		$		2nd Qtr			6 Mos.

*Global Consumer Health Care:*		*377*		*401*				*778*			*345*		*394*		*273*		*254*		*739*		*1,266*		2	%		5	%

OTC:		209		181				389			177		182		162		161		359		682		(1	%)		8	%
OTC Claritin		139		120				258			127		137		104		94		264		462		(12	%)		(2	%)
MiraLAX		26		28				54			8		6		16		18		14		48		N/M			N/M
Other OTC		44		33				77			42		39		42		49		81		172		(16	%)		(5	%)
Foot Care		85		105				190			78		102		92		74		180		345		3	%		5	%
Sun Care		83		115				199			90		110		19		19		200		239		5	%		(1	%)


N/M — Not a meaningful percentage

All figures rounded. Totals may not add due to rounding. Percentages based on unrounded figures.

Page 9

SCHERING-PLOUGH CORPORATION
CONSOLIDATED OPERATIONS DATA
(Dollars in Millions)
(Unaudited)


	2008												2007
	1st			2nd			3rd	4th	6			Full	1st			2nd			3rd			4th			6			Full
	Qtr.			Qtr.(1)			Qtr.	Qtr.	Mos.(1)			Year	Qtr.			Qtr.			Qtr.			Qtr.(1)			Mos.			Year(1)
	$			$			$	$	$			$	$			$			$			$			$			$
Geographic net sales
U.S.		1,453			1,434					2,885				1,179			1,195			1,028			1,194			2,374			4,597
Europe and Canada		2,235			2,449					4,686				1,215			1,343			1,199			1,743			2,558			5,500
Latin America		482			524					1,006				311			327			324			398			638			1,359
Asia Pacific		487			514					1,000				270			313			261			389			583			1,234


Consolidated net sales		4,657			4,921					9,577				2,975			3,178			2,812			3,724			6,153			12,690


	2008												2007
	1st			2nd			3rd	4th	6			Full	1st			2nd			3rd			4th			6			Full
	Qtr.			Qtr.			Qtr.	Qtr.	Mos.			Year	Qtr.			Qtr.			Qtr.			Qtr.			Mos.			Year
	$			$			$	$	$			$	$			$			$			$			$			$
Other expense/(income), net
Interest income		(22	)		(17	)				(39	)			(82	)		(86	)		(117	)		(112	)		(167	)		(395	)
Interest expense		138			140					278				37			39			45			125			76			245
Acquisition-related (gains)/losses on currency-related and interest rate-related items (2)		—			—					—				(3	)		35			(314	)		(255	)		31			(537	)
Foreign exchange (gains)/losses		(4	)		11					7				—			(3	)		(4	)		3			(2	)		(3	)
Other (income)/expense (3)		(17	)		—					(17	)			—			(1	)		—			8			—			7


Total — Other expense/(income), net		95			134					229				(48	)		(16	)		(390	)		(231	)		(62	)		(683	)


(1)		Second quarter and first half of 2008 include $1.4 billion and $2.8 billion, respectively, of Organon BioSciences (OBS) sales. Fourth quarter and full year of 2007 include $626 million of OBS sales as of the closing date of the acquisition on November 19, 2007 through December 31, 2007.

(2)		Included in acquisition-related (gains)/losses on currency-related and interest rate-related items are gains from foreign currency options in the amount of $510 million for the twelve months ended December 31, 2007.

(3)		Other expense/(income) for the first quarter of 2008 reflects a $17 million gain on sale of a manufacturing plant.

All figures rounded. Totals may not add due to rounding.


Janet Barth		908-298-7011
Joe Romanelli		908-298-7904

Page 10

SCHERING-PLOUGH CORPORATION

Reconciliation from Reported Net Income Available to Common Shareholders
and Reported Diluted Earnings Per Share to As Reconciled Amounts for Net Income
Available to Common Shareholders and Diluted Earnings per Common Share
(Amount in Millions, except per share figures)

To supplement its consolidated financial statements presented in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), Schering-Plough is providing the following supplemental financial information to reflect “As Reconciled” amounts related to Net income available to common shareholders and Diluted earnings per common share. “As Reconciled” amounts exclude the effects of purchase accounting adjustments, special and acquisition-related items and other specified items.


	Three months ended June 30, 2008
	(unaudited)
				Purchase			Special and			Other
	As			Accounting			Acquisition-			Specified			As Reconciled
	Reported			Adjustments			Related Items			Items			(1)

Net sales	$	4,921		$	—		$	—		$	—		$	4,921
Cost of sales		1,908			(354	)		—			—			1,554
Selling, general and administrative		1,870			(1	)		—			—			1,869
Research and development		906			(2	)		—			—			904
Other expense/(income), net		134			—			—			—			134
Special and acquisition-related charges		94			—			(94	)		—			—
Equity income		(493	)		—			—			64			(429	)


Income before income taxes		502			357			94			(64	)		889
Income tax expense/(benefit)		66			(47	)		(7	)		—			120


Net income	$	436		$	310		$	87		$	(64	)	$	769


Preferred stock dividends		38			—			—			—			38


Net income available to common shareholders	$	398		$	310		$	87		$	(64	)	$	731


Diluted earnings per common share	$	0.24											$	0.45


Average shares outstanding-diluted		1,632												1,632


(1)		“As Reconciled” to exclude purchase accounting adjustments, special and acquisition-related items and other specified items.

Page 11

SCHERING-PLOUGH CORPORATION


	Three months ended June 30, 2007
	(unaudited)
				Purchase		Special and			Other
	As			Accounting		Acquisition-			Specified			As Reconciled
	Reported			Adjustments		Related Items			Items			(1)


Net sales	$	3,178		$	—	$	—		$	—		$	3,178
Cost of sales		977			—		—			—			977
Selling, general and administrative		1,358			—		—			—			1,358
Research and development		696			—		—			(60	)		636
Other expense/(income), net		(16	)		—		(35	)		—			(51	)
Special and acquisition-related charges		11			—		(11	)		—			—
Equity income		(490	)		—		—			—			(490	)


Income before income taxes		642			—		46			60			748
Income tax expense		103			—		—			—			103


Net income	$	539		$	—	$	46		$	60		$	645


Preferred stock dividends		22			—		—			—			22


Net income available to common shareholders	$	517		$	—	$	46		$	60		$	623


Diluted earnings per common share	$	0.34										$	0.41


Average shares outstanding-diluted		1,587											1,587


(1)		“As Reconciled” to exclude purchase accounting adjustments, acquisition-related items and other specified items.

Page 12

SCHERING-PLOUGH CORPORATION


	Six months ended June 30, 2008
	(unaudited)
				Purchase			Special and			Other
	As			Accounting			Acquisition-			Specified			As Reconciled
	Reported			Adjustments			Related Items			Items			(1)

Net sales	$	9,577		$	—		$	—		$	—		$	9,577
Cost of sales		4,044			(1,042	)		—			—			3,002
Selling, general and administrative		3,547			(2	)		—			—			3,545
Research and development		1,786			(4	)		—			—			1,782
Other expense/(income), net		229			—			—			17			246
Special and acquisition related charges		117			—			(117	)		—			—
Equity income		(1,010	)		—			—			64			(946	)


Income before income taxes		864			1,048			117			(81	)		1,948
Income tax expense/(benefit)		138			(138	)		(9	)		5			280

Net income	$	726		$	910		$	108		$	(76	)	$	1,668


Preferred stock dividends		75			—			—			—			75

Net income available to common shareholders	$	651		$	910		$	108		$	(76	)	$	1,593


Diluted earnings per common share	$	0.40											$	0.97


Average shares outstanding-diluted		1,635												1,635


(1)		“As Reconciled” to exclude purchase accounting adjustments, special and acquisition-related items and other specified items.

Page 13

SCHERING-PLOUGH CORPORATION


	Six months ended June 30, 2007
	(unaudited)
				Purchase		Special and
	As			Accounting		Acquisition-			Other			As Reconciled
	Reported			Adjustments		Related Items			Specified Items			(1)

Net sales	$	6,153		$	—	$	—		$	—		$	6,153
Cost of sales		1,913			—		—			—			1,913
Selling, general and administrative		2,572			—		—			—			2,572
Research and development		1,403			—		—			(156	)		1,247
Other expense/(income), net		(62	)		—		(31	)		—			(93	)
Special and acquisition related charges		12			—		(12	)		—			—
Equity income		(978	)		—		—			—			(978	)


Income before income taxes		1,293			—		43			156			1,492
Income tax expense		190			—		—			—			190

Net income	$	1,103		$	—	$	43		$	156		$	1,302


Preferred stock dividends		43			—		—			—			43

Net income available to common shareholders	$	1,060		$	—	$	43		$	156		$	1,259


Diluted earnings per common share	$	0.70										$	0.82


Average shares outstanding-diluted		1,579											1,579


(1)		“As Reconciled” to exclude purchase accounting adjustments, acquisition-related items and other specified items.

Page 14

SCHERING-PLOUGH CORPORATION

“As Reconciled” amounts related to Net income available to common shareholders and Diluted earnings per common share reflect the following adjustments:


	Second Quarter					Six Months
	(unaudited)					(unaudited)
	2008			2007		2008			2007

Purchase accounting adjustments:
Amortization of intangibles in connection with the acquisition of Organon BioSciences (a)	$	138		$	—	$	270		$	—
Depreciation related to the fair value adjustment of fixed assets related to the acquisition of Organon BioSciences (b)		8			—		16			—
Charge related to the fair value adjustment to inventory related to the acquisition of Organon BioSciences (a)		211			—		762			—

Total purchase accounting adjustments, pre-tax		357			—		1,048			—
Income tax benefit		47			—		138			—

Total purchase accounting adjustments	$	310		$	—	$	910		$	—

Special and Acquisition-related items:
Special and Integration-related activities (e)	$	94		$	11	$	117		$	12
Acquisition-related loss on currency-related items (d)		—			35		—			31


Total acquisition-related items, pre-tax		94			46		117			43
Income tax benefit		7			—		9			—

Total acquisition-related items	$	87		$	46	$	108		$	43

Other specified items:
Income from Respiratory JV termination (f)	$	(64	)	$	—		(64	)		—
(Gain) on sale of manufacturing plant (d)		—			—		(17	)
Upfront R&D payments (c)		—			60		—			156


Total other specified items, pre-tax		(64	)		60		(81	)		156
Income tax expense		—			—		(5	)		—

Total other specified items	$	(64	)	$	60	$	(76	)	$	156

Total purchase accounting adjustments, special and acquisition-related items and other specified items	$	333		$	106	$	942		$	199


(a)		Included in Cost of sales

(b)		Included in Cost of sales, Selling, general and administrative and Research and development

(c)		Included in Research and development

(d)		Included in Other expense/(income), net

(e)		Included in Special and acquisition-related charges

(f)		Included in Equity income

Page 15

EX-99.3 4 y63200exv99w3.htm EX-99.3: PRESS RELEASE EX-99.3

Exhibit 99.3

Attention News Editors:

Results From the SEAS (Simvastatin and Ezetimibe in Aortic Stenosis) Study

LONDON, July 21 /PRNewswire/ -- The SEAS (Simvastatin and Ezetimibe in Aortic Stenosis) study has investigated the effects of intensive cholesterol lowering with the combination of simvastatin (40 mg daily) and ezetimibe (10 mg daily) in patients with aortic stenosis.

Aortic stenosis (which involves partial blockage of the aortic valve in the heart) is a relatively common disease among older people in Western populations. Left untreated, it can progress to death from heart failure or cardiac arrest. Aortic valve replacement for severe symptoms is the second most frequent type of heart surgery. Apart from surgery, there is no medical therapy known to prevent or heal this condition. Population studies and other scientific research indicate that a high blood level of LDL-cholesterol (so called “bad cholesterol) is a risk factor for developing aortic stenosis and may be involved in the pathological process. Treatment to lower LDL-cholesterol in many other types of patient has been shown to produce substantial reductions in the rates of heart attacks, strokes and other adverse outcomes.

The SEAS study is the first large-scale randomised trial to assess the effects of lowering LDL-cholesterol in patients with aortic stenosis. The study was initiated and designed by academic researchers in Scandinavia, and carried out at 173 clinical centres in Norway, Denmark, Sweden, Finland, Germany, UK and Ireland. It included 1873 patients with mild to moderate aortic stenosis without symptoms who were not considered to have a clear indication for treatment with cholesterol-lowering drugs. Patients were randomly assigned to receive either intensive cholesterol lowering with the combination of simvastatin (40 mg daily) and ezetimibe (10 mg daily) or matching placebo. The first patient was included in 2001. The study was completed according to the study plan when the last patient included had been followed for 4 years (March 2008). Vital status at the end of the study was established for all patients. All data have been checked for completeness and the data file for analysis was closed on 30 June 2008.

The scientific leadership of the study was a Steering Committee consisting of 14 academic representatives of centres in each of the participating countries and two members (a statistician and a coordinator) representing the funders. The SEAS study is funded by the pharmaceutical companies Merck Sharp & Dohme (MSD) and Schering-Plough who market the drugs being tested. All clinical endpoint events were adjudicated by an independent committee that was blinded to the study treatment allocation. The study was monitored by an independent Data Safety and Monitoring Board. Data collection was performed by MSD, and the data were analyzed by statisticians at Ulleval University Hospital in Oslo, Norway, and at MSD. The primary endpoint of the SEAS study was “major cardiovascular events”, which is the composite of events associated with aortic valve disease and with atherosclerotic disease. The secondary endpoints were the two separate components of the primary endpoint: “aortic valve disease events” (surgical valve replacement, hospitalization because of heart failure, and cardiovascular death); and “atherosclerotic disease events” (non-fatal

myocardial infarction, coronary artery bypass surgery or percutaneous coronary intervention, hospitalization because of unstable angina pectoris, non-haemorrhagic stroke and cardiovascular death). Subsidiary outcomes included echocardiographic evidence of aortic stenosis progression and safety.

Compared with placebo, the combination of simvastatin and ezetimibe reduced LDL-cholesterol by an average of 61%, corresponding to a reduction of about 2 mmol/L (76 mg/dl), and this effect was sustained throughout the study. 688 patients had one or more primary endpoint events. No significant difference was observed between the treatment groups for the combined primary endpoint (333 patients with an event on LDL-lowering treatment versus 355 on placebo; hazard ratio (HR) 0.96; 95% confidence interval (CI) 0.83 to 1.12). Nor was there a significant difference for the secondary endpoint of aortic valve disease events alone (308 versus 326; HR 0.97; 95% CI 0.83 to 1.14). The combination of simvastatin and ezetimibe did, however, produce a statistically significant 22% (95% CI 3% to 37%; p=0.02) proportional reduction in the secondary endpoint of atherosclerotic events alone: 148 (15.7%) in the simvastatin plus ezetimibe group versus 187 (20.1%) in the placebo group.

The study therapy was generally well tolerated, with no significant differences between the treatment groups in the proportions of patients who stopped taking study treatment (irrespective of whether it was active or placebo). In the subsidiary safety analyses, a total of 158 patients were recorded with a serious adverse event attributed to cancer. More of these events were observed among patients assigned the combination of simvastatin and ezetimibe than among those assigned placebo (93 (9.9%) versus 65 (7.0%); unadjusted p=0.03), and there were also slightly more cancer deaths (39 (4.1%) versus 23 (2.5%); unadjusted p=0.05). These apparent differences were not related to any particular type of cancer and did not become significantly larger with more prolonged treatment.

The observed differences in cancer in the SEAS study are based on small numbers and could have occurred as a result of chance. In order to assess their relevance, the SEAS data have been provided to an independent academic group for combined analysis with data on cancer from the two other large trials of simvastatin and ezetimibe, which are still in progress. The SHARP (Study of Heart and Renal Protection) study is a randomized placebo-controlled trial of simvastatin and ezetimibe in 9400 patients with chronic kidney disease. The IMPROVE-IT (IMProved Reduction of Outcomes: Vytorin Efficacy International Trial) study is a randomized double-blind trial of simvastatin and ezetimibe compared to simvastatin alone which has recruited 12,000 of a planned 18,000 patients with acute coronary disease.

In combination, the SHARP and IMPROVE-IT studies involve about 4 times as many cancers as in the SEAS study. The analysis of SHARP and IMPROVE-IT does not support the suggestion of an increase in cancer that was raised by the subsidiary analyses of the relatively small numbers of cancers in the SEAS study. Independent analysis of these data was initiated and has been conducted and interpreted by the Clinical Trial Service Unit (CTSU) at the University of Oxford, UK. The CTSU also designed and is conducting the SHARP trial, which is funded by a research grant to the University of Oxford from MSD and Schering-Plough academic. Both the SHARP study and the analyses of cancer data have been conducted by the CTSU independently of the pharmaceutical companies. Please, refer to the press release issued by the CTSU today.

In conclusion, the SEAS study has found that intensive LDL-cholesterol lowering with the combination of simvastatin and ezetimibe in patients with mild to moderate aortic stenosis does appear to reduce the risk of coronary artery disease events (as has been shown for many other types of patient in previous trials) but not the rate of progression of aortic valve disease. The use of simvastatin and ezetimibe in such patients was generally well tolerated and safe.

SOURCE;
Prof Terje Pedersen, SEAS Study Principal Investigator & Head of Steering Committee For contact, Terje R. Pedersen, MD, Professor of Medicine, Head of the Centre for Preventive Medicine, and Chairman of the SEAS trial Steering Committee, Ulleval University Hospital, Oslo, Norway, mobile telephone: +47-91-78-71-26, e-mail: t.r.pedersen@medisin.uio.no

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