Schering-Plough profit rises on cholesterol drugs

NEW YORK (Reuters) - Schering-Plough Corp. (SGP.N) said on Monday that fourth-quarter profit rose 75 percent, helped by strong demand for its Remicade arthritis drug and Vytorin and Zetia cholesterol fighters.

Net income increased to $182 million, or 12 cents per share, from $104 million, or 7 cents per share, a year earlier.

Excluding charges to streamline manufacturing operations and license a heartburn treatment, earnings were 17 cents per share, matching the average forecast of analysts polled by Reuters Estimates.

Bear Stearns analyst John Boris said strong revenue growth was offset by high operating expenses, including a 33 percent jump in spending on research and development.

Schering-Plough shares fell 1 percent in early trading.

Boris affirmed his "underperform" rating on the stock, saying Schering-Plough needed to acquire new products that could boost sales and earnings to justify the 30 percent premium its stock commands over other drug makers' shares.

Schering-Plough's on-target performance follows recent quarters when earnings solidly beat expectations -- as Schering-Plough Chief Executive Fred Hassan made good on his promise to turn around the company.

Sales rose 14 percent to $2.65 billion, a bit higher than analysts' estimates of $2.55 billion. The figure excludes Zetia and Vytorin, which are co-marketed under a joint venture with Merck & Co. (MRK.N)

Including Schering-Plough's 50 percent share of sales from the cholesterol drugs, quarterly revenue jumped 18 percent to $3.2 billion.

Zetia blocks absorption by the intestines of cholesterol; Vytorin combines the medicine in a single pill with Merck's older Zocor cholesterol drug. Zetia and Vytorin together garnered global sales of $1.1 billion for the drug makers.

Schering-Plough officials told analysts in a conference call on Monday that they expected sales of Zetia and Vytorin to grow in 2007, despite the recent launch of additional and cheaper generic forms of Zocor.

Sales of Remicade, a treatment for rheumatoid arthritis that Schering-Plough sells overseas, soared 34 percent to $337 million, helped by recent approvals for new uses. Inhaled allergy drug Nasonex's sales jumped 37 percent to $253 million.

But sales of Peg-Intron, an interferon drug used to treat hepatitis C, slipped 3 percent to $208 million, hurt by declining demand in Japan.

Schering-Plough shares were down 24 cents at $24.85 in early New York Stock Exchange trade.