Strong Financial Performance Driven By Strength and Diversity on Many Fronts; Productivity Transformation Taking Hold
KENILWORTH, N.J., Oct. 21 /PRNewswire-FirstCall/ -- Schering-Plough Corporation (NYSE: SGP) today reported financial results for the third quarter of 2008.

"Our performance this quarter again demonstrates the strength of our long-term strategies and our ability to execute on them," said Fred Hassan, chairman and CEO. "Despite a tough environment and challenges to the U.S. cholesterol joint venture products, we delivered strong sales and earnings while investing in R&D and paying down debt. Thanks to the new strength and diversity we have built on many fronts, we have continued to grow our top line, grow our pipeline, reduce costs and invest wisely."


Hassan added, "Now with almost one year of experience, we are seeing that the acquisition of Organon BioSciences (OBS) is resulting in a powerful combination. This integration is creating new product strength, new geographic strength, new strength with our customers and new R&D strength - including a late-stage pipeline that is now one of the strongest in our industry."


For the 2008 third quarter, Schering-Plough reported net income available to common shareholders of $551 million or 34 cents per common share on a GAAP basis. Earnings per common share for the 2008 third quarter would have been 39 cents on a reconciled basis, which excludes purchase accounting adjustments, special and acquisition-related items, a $160 million pre-tax gain on previously announced divestitures of certain animal health products and $19 million of income from the termination of a respiratory joint venture with Merck. For the 2007 third quarter, Schering-Plough reported net income available to common shareholders of $713 million or 45 cents per common share on a GAAP basis and 28 cents per common share on a reconciled basis.


GAAP net sales for the 2008 third quarter totaled $4.6 billion, up 63 percent as compared to the third quarter of 2007. Sales for the quarter benefited from the inclusion of net sales of products from OBS 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 third quarter, down 15 percent, with lower U.S. sales partly offset by growth in international markets. 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 third quarter would have been $5.1 billion.


Commenting on third quarter results, Hassan said, "While the U.S. market remained difficult, we continued to take advantage of our growing international presence and opportunities." Approximately 70 percent of Schering-Plough's 2008 third quarter GAAP net sales were generated outside the United States. "Our concerted effort over the last five years to invest in newer markets - such as Brazil, China, Russia and countries in Central and Eastern Europe - is paying off," Hassan added, "with dynamic sales in these markets contributing to the overall growth rate of our company." The company noted that sales in these newer markets contributed about 12 percent of the company's overall net sales, more than double the percentage contributed by those markets in 2005.


"Importantly, our company continued to generate good cash flow in the third quarter, paid off additional debt and still increased cash balances," Hassan noted.

As a result of actions during the last five years, Hassan said that the company is now "particularly well positioned" for the following reasons:

-- Broad diversification in geographic markets and businesses, with the
consumer and animal health segments together generating about 23 percent
of GAAP net sales;
-- Relatively long period of expected market exclusivity for key
prescription products, affording protection well into the next decade;
-- Robust research pipeline, with 10 projects in Phase III;
-- Near-term opportunities, including the biologic golimumab, filed in the
EU; sugammadex, now being launched as BRIDION in EU countries; and
asenapine, under U.S. regulatory review; and
-- Sound financial management, with rigorous cost controls in place to
reduce costs and improve efficiencies and productivity.

More info on: http://www.sgp.com/schering_plough/news/release.jsp?releaseID=1214771

Third Quarter 2008 Conference Call and Webcast

Schering-Plough will conduct a conference call today at 8 a.m. (EDT) to review the 2008 third quarter results. To listen live to the call, dial 1-877-565-9664 or 1-706-634-5003 and enter conference ID # 64088992. A replay of the call will be available beginning later on Oct. 21 through 5 p.m. on Oct. 28. To listen to the replay, dial 1-800-642-1687 or 1-706-645-9291 and enter the conference ID # 64088992. 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 Oct. 21 through 5 p.m. on Nov. 21.