Schering-Plough Tuesday reported a quarterly loss as special charges from its acquisition of Organon Biosciences late last year offset sharply higher sales, but results beat Wall Street expectations.
The U.S. drugmaker said it lost $3.4 billion in the fourth quarter, or $2.08 per share, compared with a year-earlier profit of $182 million, or 12 cents per share.
Excluding special items, Schering-Plough earned 27 cents per share. Analysts on average expected 24 cents per share, according to Reuters Estimates.
"It looks like a solid quarter, and the quality of earnings was reasonably good," Leerink Swann analyst Seamus Fernandez said. Schering-Plough's better-than-expected performance was largely due to favorable foreign exchange factors and impressive sales of cholesterol fighters Zetia and Vytorin, he said.
Quarterly sales jumped 41 percent to $3.7 billion, a bit higher than the $3.53 billion Reuters Estimates had forecast.
The growth, in part, resulted from $626 million in sales of Organon products during the period after the merger was completed in November.
Overall sales growth would have been 7 percentage points less if not for the weak dollar, which increases the value of sales overseas.
Global revenue from Zetia and Vytorin, which the company sells through a joint venture with Merck, jumped 34 percent to $1.46 billion.
The company does not record sales from the joint venture. But including its assumed half of the global cholesterol joint venture net sales, Schering-Plough's adjusted sales for the quarter would have risen 39 percent to $4.4 billion.
But sales of Zetia and Vytorin have begun to slip in the past month after Vytorin, in a closely followed study, proved no better than Merck's older cholesterol fighter Zocor to prevent buildup of fatty plaque in arteries.
Vytorin combines Zetia, which prevents the intestines from absorbing cholesterol, with Zocor, a generically available drug that limits the body's production of cholesterol.
A torrent of news coverage has questioned whether a 21-month delay by Schering-Plough Corp and Merck to publish the trial data was an effort to hide negative findings.
Schering-Plough Chief Executive Fred Hassan on Tuesday said findings from the so-called Enhance trial had been "mischaracterized," and that a full understanding of the data will not be possible until they are formally presented at a major cardiology meeting next month.
"This was one of those media-driven situations," he told analysts in a conference call, saying his company and Merck acted with integrity and good faith with respect to the study.