Profits soar at Schering
German drug company Schering has seen its quarterly profits soar by 29 per cent thanks to a cost-cutting programme and better than expected sales of its new birth control pill Yasmin.
The company has increased its end of year profit forecast; shares rose by nearly 3 per cent on the news in pre-market trading.
Profit before tax rose to €160m (£108m) from €124m on the same period a year ago, the company announced yesterday, beating analysts’ forecasts. Overall third quarter earnings tripled on strong sales of key products.
Chief executive Fred Hassan claimed on an analyst conference call that the company had been turned around since April 2003 when he joined.
“We halted a downward spiral,” Hassan told analysts. When he took over, the company was facing serious problems with American regulators and expiring patents.
The company has now registered its fourth consecutive quarter of strong sales growth and its third consecutive quarter of higher profitability, said Hassan.
New birth-control pill Yasmin has contributed to the success. Yasmin is a low dose hormone pill which is also said to reduce the symptoms of premenstrual syndrome.
Meanwhile America-based Merck also reported a rise in third quarter earnings thanks to a cost cutting programme.
The American company managed to bolster profits despite the fact that its arthritis drug Vioxx was withdrawn from the market and demand for cholesterol drug Zocor plummeted.
Zocor is Merck’s biggest seller but sales slumped 14 per cent to $1.05m (£600,000) because a more potent drug, Vytorin is now on the market.
However, Merck developed Vytorin in a joint venture with Schering, so the company has benefited from its sales explosion.
Shares in Merck, which is based in New Jersey, have fallen by 18.5 per so far this year, against a decline of 3.1 per cent for the American Stock Exchange Pharmaceutical Index.
