MONDAY, SEPTEMBER 08, 2003 5:37 PM
- AP Online
NEW YORK, Sep 08, 2003 (AP Online via COMTEX) -- Schering-Plough Corp. is losing market share in its top four drugs, and one of the beleaguered company's first priorities is to stabilize those declines, Chairman and Chief Executive Fred Hassan said Monday. Speaking on a webcast from the Bear Stearns Healthcare Conference in New York, Hassan outlined his turnaround plans for the Kenilworth, N.J., company, which has become the most downtrodden in the industry. "I know that many of you have been frustrated with what you've seen with this company," Hassan said. "It's very hard to understand all the moving parts. Our U.S. prescription (allergy) business has evaporated and the hepatitis-C market is very volatile. As you know, for a mid-sized company, we have an unusual number of manufacturing and regulatory issues." The company's sales have plummeted since losing patent protection on Claritin, once the world's top-selling allergy drug. Before Hassan came on board in April, the company cut its allergy drug sales force to cut costs, but Hassan now blames that move for the slow uptake of Clarinex, a next-generation allergy drug that was supposed to help abate Claritin losses. Nasonex, another allergy drug, is losing market share, Hassan said. Roche Holding AG's Pegasys is eating up market share of its now top-selling PEG-Intron franchise of Hepatitis-C drugs. And Rebetol, a drug in the Hepatitis-C franchise, faces a patent challenge. Schering-Plough shelled out $250 million in the second quarter as part of a consent decree with the Food and Drug Administration over manufacturing processes, and it faces a criminal indictment from federal prosecutors who suspect the drug company of giving kickbacks to doctors in return for prescribing its drugs. The federal government is also investigating whether former Chief Executive Richard Jay Kogan broke SEC fair-disclosure rules. Late last month the company decided to slash its dividend 68 percent and trim at least 1,000 employees under an early retirement program, while warning that earnings in 2004 will likely be below already low 2003 levels. "We must reinvent and rebuild the machine," Hassan said. He wants to make Schering-Plough a "single, integrated global pharmaceutical company," which will require a "culture change from inside the company." The next step forward is to "stabilize and repair" the company, he said. That, he said, may take 18 to 24 months. In the nearer term - the next six months - Hassan wants to reduce the rate of market-share loss in the top franchises. He wants Zetia, a cholesterol drug that is and considered the company's big saving grace, to gain 5 percent of the cholesterol market. And thirdly, he wants to "rigorously try to capture all the savings we're looking for," he said. "It's a long haul that should give a successful turnaround," he said. "Everything that I've shared with you today suggests that this one can be done. It's difficult but we can get this turned around. But it will take some time." New York Stock Exchange-listed Schering-Plough shares closed Monday at $15.55, up 31 cents, or 2 percent. Copyright 2003 Associated Press, All rights reserved | 
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