SP down in the dumps
Troubles at Schering-Plough continue to mount with poor fourth quarter results and a row brewing about a US$50m (Euro 46m) 'golden handshake' for ceo Richard Kogan.
The company reported a 28% drop in fourth quarter sales in the US to $885m (Euro 818m), following the conversion of its antihistamine prescription drug, Claritin (loratadine) to otc. This contributed to a worldwide sales decrease of 9% to $1.9bn (Euro 1.75bn).
Full year sales of the blockbuster antihistamine were down 43% to $1.8bn (Euro 1.65bn), but this did not overly impact on net income, which rose 8% to $2.1bn (Euro 1.9bn) on revenues up 4% to $10.2bn (Euro 9.4bn). However, the net income figure is partially distorted, as 2001 results included a $500m fine payable to the US government for manufacturing deficiencies at the firm's Puerto Rico and New Jersey sites.
US pharmaceutical sales slipped 5% to $4.8bn (Euro 4.4bn), mainly due to the over-the-counter switch of Claritin, but also because of lower sales from its asthma treatment Proventil (albuterol), the dermatologics franchise and K-Dur (potassium chloride), which was hampered by generic competition.
“Schering-Plough has lost $40bn in market capitalisation in the past two years, so it looks like Kogan is getting over $1m for every $1bn they've lost. |
SP's share price also fell on news that Richard Kogan, the outgoing ceo is to get a $50 million retirement package. $24m of Kogan's retirement package was charged in the company's fourth-quarter expenses, about $13m of the package will be basic cash severance, amounting to three times Kogan's annual salary, bonus and benefits. The remainder is from pension, stock awards and stock options, the company said.
Raymond James analyst Mike Krensavage said: 'Schering-Plough has lost $40bn in market capitalisation in the past two years, so it looks like Kogan is getting over $1m for every $1bn they've lost.'