Schering-Plough finally back in profit after Organon buy; exceeds expectations, pleasing shareholders

US drug major Schering-Plough exceeded analysts expectations as it returned to profit after finally overcoming the cost of its acquisition  of Organon BioSciences (Marketletter November 26, 2007). Shares in the  firm rose 3% to $17.94  on the day of the news, February 3.

For the full year 2008, the firm reported net income of $1.6 billion, or  $1.01 per share, versus a net loss of $1.6 billion, or $1.04 per share,  which included $3.8 billion of acquired in-process R&D charges from  Organon. Excluding purchase accounting adjustments, special and  acquisition-related and other specified items, 2007 earnings per share  were $1.37.

Sales rose 46% to $18.5 billion, primarily due to the acquisition of  Organon, which generated $5.4 billion in turnover. Selling, general and  administrative expenses were $6.8 billion and R&D spending totaled $3.5  billion.