Saturday, August 2, 2008

A Great Editorials [plural!], on Ezetimibe studies fallout -- Courtesy of a Regular Reader. . . .


Regular reader Marilyn Mann -- in the comment-box for another post -- writes ". . . .Nice post by Roy Poses (linked here) on a recent editorial in the American Journal of Cardiology. . . ." -- below is a taste, but do go follow that link:

. . . .For science to advance, open discussion and criticism of methods, results and interpretations is vital. For physicians to take the best possible care of patients, they must have access to the best possible evidence from clinical research, even if that evidence offends the powers that be or those with vested interests.

A clue as to why the authors took such an extreme position may be found in the last sentence of their article

In the case of ezetimibe, we are concerned that this drug or its makers will be eliminated on the basis of hyperbole, misinformation. . . .

Why would they be so worried as to raise the hyperbolic concern that the controversy over ENHANCE could cause ezetimibe, and even Merck and Schering-Plough to be "eliminated?" A quick Google search revealed disclosed that the authors collectively have multiple relevant financial relationships that they did not disclose. . . .

. . . .The inconvenient truths that we censor or hide surely will return to afflict us. . . .

This. is. simply. a. must-read.

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UPDATED -- 08.03.08 @ 2 PM EDT
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This morning, another "simply. must. read", on this very same topic [clickable screen-shot of the widely-esteemed blog, above]:

PM, over at Gooznews is on it -- like white on rice. Do go read -- but here is a particularly juicy bit:
. . . .The editorialists over at the American Journal of Cardiology who last month attacked Vytorin critics as hysterics must not have heard that there are rules for people who live in glass houses who throw stones: they are required to let readers know when they moonlight for the stone maker. . . .

D I N G ! ! !

4 comments:

Jim Edwards said...

You might enjoy this: Is Schering-Plough’s ‘Productivity Transformation Program’ Actually Making S-P Less Productive?

http://jimedwardsnrx.wordpress.com/2008/08/01/is-schering-plough%e2%80%99s-%e2%80%98productivity-transformation-program%e2%80%99-actually-making-s-p-less-productive/

Condor said...

A regular reader had submitted this link, Jim -- and yes, I do intend to feature it, along with some refinements to the SG&A analysis, there presented, very shortly. . . .

Good stuff!

Thanks!

Condor said...

I decided to leave this as comment box matter, for now, because I want to go back and look at Jim's formulae against Pfizer, and Novartis -- the ones that started his thinking and writing, linked in his above. . . .

Moreover, after looking at Cost of Sales for Q2 2008, at Schering-Plough, I wonder whether that Jim Edwards generated measure isn't actually ALSO recording a fair amount of "noise" -- noise in the form of Cost of Sales (or what is more generally referred to as "CoGS" in accounting-speak) variances driven by Organon integration variances:

". . . .Cost of sales for the three and six months ended June 30, 2008 include purchase accounting adjustments of $354 million and $1.0 billion, respectively, related to the acquisition of [Organon]. . . ."

That is Note 2 to Schering's Q2 Press Release -- Now, the Q1 Note 2 text:

". . . .Cost of sales for the three months ended March 31, 2008 includes purchase accounting adjustments of $688 million related to the acquisition of [Organon]. . . ."

[NOTE: these are, generally-speaking, mostly inventory re-valuation charges -- and as such, are likely mean little to future operating results. They may reflect some unduly optimistic assumptions about inventory values, in prior periods, though.]

In any event, I am struck by the quarter-to-quarter volatility there -- $688M in Q1, but "only" $354M in Q2. . .

Two to one, almost. And this would likely hold to a common pattern -- at most companies with large restructurings (and thus charges) in process. . . .

That volatility, in turn, will distort Jim's ratio of Gross Profit to S,G&A -- as it flows right through, right?

I think so.

That said, I think his general points are very cogent -- and well made. I simply think the measure he is focusing on -- is kind of "noisy" -- certainly it is, at Schering-Plough.

Namste

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