Embattled pharmaceutical company Schering-Plough has lowered its financial forecasts for the second time and unveiled a fresh round of cost cutting in an attempt to stabilise the company's finances.
S-P has suffered of late from manufacturing compliance issues that held up by key products in its late-stage pipeline and culminated in a $500 million charge for the firm last year. Other problems for the firm include the switch of flagship product Claritin (loratadine), an antihistamine, to over-the-counter status in the USA and a decline in market share for Peg-Intron (peginterferon alfa-2b) and Rebetol (ribavirin) for hepatitis C and the allergy drug Nasonex (mometasone).
Fred Hassan, the company's recently established new chief executive, has initiated an early retirement plan designed to remove more than 1,000 employees from the payroll, and the company has also warned that additional lay-offs are likely.
In addition, performance-related pay hikes will be frozen through 2004 for all employees with the exception of the company's sales force. The company also announced a series of administrative cost cutting measuring including the sale of its corporate jet and reductions in other executive privileges.
The moves are part of Hassan's previously announced plan to reduce spending by $200 million a year. S-P now expects profits for the second half of 2003 to be below levels reported for the first six months, while 2004 earnings per share are expected to be below 2003 levels.
The company said that the cost savings will allows it to throw its weight behind Zetia (ezetimibe), the cholesterol-lowerer launched last fall in the USA by S-P's joint venture with Merck & Co, as well as a Zetia/simvastatin combination therapy.