Schering-Plough:Manufacturing Process Problems May Hit Earnsgreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
CNBC says they're having "bookkeeping" problems....more data corruption?
Thursday February 15 5:40 PM ET Schering-Plough:Plant Issues May Hit Earns
NEW YORK (Reuters) - Schering-Plough Corp. (NYSE:SGP - news) said on Thursday it expects first-quarter earnings to drop as much as 15 percent from the 2000 quarter after U.S. regulators required the drug company to correct manufacturing problems, thus disrupting production.
Full-year 2001 sales and earnings will also be lower than expected as plants are taken off line following inspections by the U.S. Food and Drug Administration (news - web sites) of the company's plants in New Jersey and Puerto Rico, it said.
The problems involve the failure to adhere to ``Good Manufacturing Practices, primarily relating to production processes, controls and procedures,'' the company said without elaborating.
Schering-Plough said the deficiencies must be corrected before it can receive FDA approval for desloratadine -- a key experimental allergy drug that the company had hoped to ship to drug stores for the coming allergy season that begins next month.
Schering-Plough, which earned 42 cents per share in the first quarter of 2000, said the FDA had expressed concern after inspecting the Kenilworth, N.J.-based company's manufacturing plants.
Analysts polled by First Call/Thomson Financial expect the firm to earn 48 cents per share in the current quarter and $1.90 a share for full-year 2001.
Schering-Plough said in a statement that its drug production and shipments would be hurt by the ``temporary interruption of some production lines to install system upgrades and further enhance compliance, and other technical production and equipment qualification issues.''
The firm said the FDA recently inspected the New Jersey and Puerto Rico plants in a follow-up to manufacturing problems spotted in the fall of 1999. The company said it has been working to correct the earlier problems with the help of outside consultants and has committed to spend over $50 million for new equipment, process and system improvements.
Schering-Plough did not say when it expects to begin shipping desloratadine, the successor to the company's $3 billion-a-year allergy treatment Claritin, which is facing possible generic competition when its U.S. patent expires in December 2002.
It hopes to switch over Claritin users to desloratadine well before the patent expires late next year, a mission that will be more difficult to accomplish with any delay in getting desloratadine to market.
The FDA has given a so-called ``approvable letter'' to desloratadine, indicating the drug has satisfied most of the requirements for final approval. But the drug, which is a derivative of Claritin (loratadine), has not yet received a final green light from the agency.
The stock closed down 70 cents to $48.32 on the New York Stock Exchange (news - web sites) Thursday. Its 52-week trading range is $60 and $30.50. http://dailynews.yahoo.com/h/nm/20010215/bs/health_scheringplough_dc_1.html
-- Carl Jenkins (firstname.lastname@example.org), February 15, 2001
for the U.S. Food and Drug Administration's list of drug shortages. I can tell you it is not necessarily going to reflect all reality out on the clinical front lines, but the web page is an interestng place to start.
Note that Schering-Plough is not represented as having any problem products right now.
One of the more frustrating aspects of the pharmaceutical business (shared to some extent with many if not all other highly competitive industries) is the lack of clarity as to exactly what is going wrong. It is rarely made clear, even to physicians, what exactly the FDA and a pharmaceutical company mean by "problems." Is it something relatively minor from a safety and efficacy point of view, i.e. the paperwork wasn't done correctly, or something major that should lead clinicians and patients to be cautious? (Well, that last possibility is exactly the point--they don't want to lose market share). It is a very opaque business.
We are left with trying to glean hints from multiple sources...such as your excellent pickup that "CNBC says they're having "bookkeeping" problems". Hmmm....
-- Andre Weltman, M.D., M.Sc. (email@example.com), February 16, 2001.