Schering-Plough to Pay $500 Million to Settle Factory Probe - TheStreet

Pharmaceutical company

Schering-Plough

(SGP)

agreed to pay the government $500 million to resolve quality control issues at its New Jersey and Puerto Rico plants.

The company signed a consent decree to pay $250 million in the second quarter and $250 million in the third quarter to bring its plants into compliance with manufacturing standards.

In a press release, the company said it will suspend the manufacture of certain animal health products in its Puerto Rico facility while that plant is brought up to speed, and it will discontinue manufacturing certain older products.

Because of inspection requirements and potential delays in shipments, Schering-Plough also lowered its outlook. The company now expects a single-digit percentage increase in earnings instead of the previously forecast double-digit growth. Schering now sees second-quarter EPS flat with last year at 43 cents, below analyst estimates of 46 cents.

Schering-Plough was up about 3% to $25.47 in premarket trading after closing at $24.75 Thursday.