Struggling drugmaker Schering-Plough (SGP) Tuesday reported first-quarter earnings of $564 million, or 38 cents per share, a 10% drop compared to the year-ago period but two cents above analysts' estimates.
Results could have been worse. In February, the drug giant warned that a probe into its manufacturing operations by the
U.S. Food and Drug Administration
would cut first-quarter sales and earnings by approximately 15%.
Analysts were expecting the Kenilworth, N.J-based company to post earnings of 36 cents per share, according to consensus figures compiled by
Thomson Financial/First Call
Schering-Plough shares fell 1.2% at Tuesday's opening after closing Monday at $36.45.
Schering-Plough posted first-quarter sales of $2.3 billion, lower by 3% compared to the first quarter of last year. Global pharmaceutical sales totaled $1.9 billion during the first quarter, a decline of 3% from the year-ago period.
Allergy drug Claritin, which faces cheaper, generic competition next year, posted 8% sales growth to $718 million. Schering-Plough has a replacement allergy drug in the pipeline called Clarinex, but the company's FDA problems have put its final approval on hold.
Schering-Plough also has quality control issues at its manufacturing plants that have resulted in drug shortages as the problems were being fixed. Two drugs in particular were affected. First-quarter sales of Vancenase, an anti-allergy steroid, fell 94% to $3 million, compared to the first quarter 2000. Sales of Vanceril, a steroid used to treat asthma, dropped 69% to $11 million in the first quarter, compared to $37 million in the year-ago quarter.
"Schering-Plough is moving aggressively and deliberately to resolve the manufacturing issues that affected our performance in the first quarter," said company chairman and CEO Richard Jay Kogan, in a statement.
The company, on its brief conference call, did not elaborate on the statement, giving no timetable for when the manufacturing problems and the FDA probe would be resolved. Analysts don't expect Schering-Plough to right itself until these problems are addressed.