Schering raises forecasts after strong first-half
unveiled its second-quarter profit for 2005, which saw the
drugmaker's profits rise by 34 per cent, helped by sales of its
Yasmin contraceptive and gains from the sale of its stake in a
marketing company.
Net profit rose to €176 million, or 92 cents a share, from last year's figure of €131 million. Sales also rose to €134 billion - a rise of 8 per cent. Schering said sales of its Yasmin contraceptive rose 32 per cent to 256 million euros in the first half of the year.
Schering has raised its 2005 operating margin outlook to 16.5 per cent to 17 per cent, moving ever closer to the 18 per cent it has targeted for next year. This goal is based on newer products such as Yasmin to reduce its reliance on the 16- year-old multiple sclerosis drug Betaseron.
Betaferon/Betaseron, had first quarter 2005 sales of €404 million - a rise of 8 per cent from this time last year.
"We are raising our profitability target for 2005 as we expect our strong earnings momentum to continue throughout the second half of this year," said chief executive Hubertus Erlen in a statement.
In June Schering sold its 25 per cent stake in the marketing company Medac for "a two-digit-million-euro sum." Shering also bought the remaining 50 per cent stake in an oncology joint venture it had with Medac.
While Schering's 2Q results have exceeded analyst's expectations, its shares have fallen by 6 per cent this year. In contrast with some of its larger European peers, its pipeline is not as well stocked and it relies more heavily on its older drugs for growth.
In March, along with Swiss partner Novartis, it postponed filing for regulatory approval a key cancer drug following inconclusive late-stage trial data. The company is trimming costs, partly through job cuts, to improve profitability.
Schering's European sales recorded an increase of 4 per cent in total. In Germany - the largest market in this region - net sales increased by 12 per cent. Schering attributed this increase to a "decrease in the government-imposed manufacturer's rebate from 16 per cent to now 6 per cent on reimbursable products."
Net sales in Great Britain declined by 5 per cent in the first six months of 2005. This was partially due to government-imposed price reductions. In France, the net sales development remained at the previous year's level, despite generic competition for Diane - the company's best selling contraceptive pill.
Sales in the United States Region grew by 14 per cent in the first six months of the year. In the second quarter alone, net sales increased by 16 per cent. The net sales increase in the second quarter is in part due to the development of Betaseron.
