Schering-Plough posted better-than-expected Q1 results yesterday on the back of strong sales of rheumatoid-arthritis drug Remicade and allergy medication Nasonex. Its shares gained 8.6% to $31.00, their biggest one-day percentage gain in seven years. The company reported Q1 net income of $543 million ($0.36/share) versus $350 million ($0.24) in the year-ago quarter, a 55% gain and ahead of analyst expectations of $0.29. Excluding charges, the company would have reported EPS of $0.42. Revenue surged 17% to $2.98 billion from $2.55 billion, again beating analyst expectations of $2.74 billion. Remicade sales grew 34% to $373 million in the quarter, and Nasonex was up 24% to $284 million. Sales of all of the company's top nine products were up at least 10%. The company's cholesterol-drug JV with Merck generated $1.2 billion in revenue, with Vytorin up 66% to $616 million and Zetia up 31% to $544 million. Schering-Plough announced a month ago that it will buy Akzo Nobel's Organon unit -- the third-largest maker of birth control pills as well as several experimental medicines -- which should help it lessen its dependence on revenue from cholesterol drugs.
Sources: Press release, Reuters, Bloomberg, MarketWatch
Commentary: HealthShares Founder: Buy Biotech Stocks and ETFs, Avoid Big Pharma • Biotech Day in Review: Schering-Plough Buys Organon for $14.4 Billion • Searching for Value Investments in the Drug Stock Universe
Stocks/ETFs to watch: Schering-Plough Corp. (SGP), Merck & Co. (NYSE:MRK). Competitors: Glaxosmithkline plc (NYSE:GSK), Johnson & Johnson (NYSE:JNJ), Sanofi-Aventis (NYSE:SNY). ETFs: iShares Dow Jones US Pharmaceuticals (NYSEARCA:IHE), PowerShares FTSE RAFI Health Care (PRFH), Pharmaceutical HOLDRs (NYSEARCA:PPH)
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