Some UPDATED 02.03.09 facts, and questions:
Merck Conference Call now underway:
▲ Cowen & Co. Question: On Q3 call, you said you expected that about two-thirds of US formularies will not require advance approvals for any Vytorin/Zetia scrips? -- Answer: Yes; we still believe that is true, but it is down from 80 percent. Do you still expect Vytorin/Zetia growth in the US in 2009? Answer: We have seen a change in the use of the products, but we are hopeful that growth will return in the US, one day -- but maybe not 2009.
▲ Merck is guiding 2009 revenue to the lower-end of its earlier-projected ranges. This revenue-line weakness is clearly evident in Schering's results, and prospects, as well.
Schering Conference Call now underway:
▲ Carrie Cox said that Bridion/Sugammadex is launched in ten countries in Europe -- large government payers, hospital formularies -- just now starting to take hold. My sense: It will be slow going.
▲ Koestler: Asenapine rceived an FDA Class 2 Complete Response letter "clock start". . . .
▲ Jamie Rubin (JP Morgan) asked about Boceprevir timing: mid-2011 remains the Schering-announced "aspirational FDA filing date" -- well behind Vertexe's Teleprevir (See link).
▲ Seamus Fernandez (yes, the same Leerink Swann analyst!) asked about Proventil HSA pricing, then how will gross margin be affected by currencies -- what happens to inventory -- as the Q2 flows through. No expectation of ongoing conversion past first quarter (said Carrie Cox). CFO Bertolini pretty much dodged the question on gross marging/currencies.
▲ David Reisinger (B of A) asked about currency headwinds at the gross profit line: $240 million currency headwind, at the sales line, of which 30 percent fell to the bottom line. May vary quater to quarter.
▲ In response to a question, CEO Hassan said that Schering expects to build a psychiatrists' sales force for Asenapine (pricey!).
▲ Tim Anderson (Sanford Bernstein) asked about of Golimumab, first half of 2009? Koestler answered by year end. Vyotrin & Zetia, Carrie Cox said long-term, they are hopeful.
▲ Rupesh Patel (UBS) asked about PTP timing, SG&A and R&D (net of currency headwind): Bertonini said PTP is on-track, but not ahead of schedule on PTP; currencies affected R&D line by $70 to $80 million in the quarter, and affected SG&A by about $50 million.
▲ Sales of OTC consumer products fell 14 percent to $219 million, mainly due to inventory-stocking patterns that hurt over-the-counter sales of its Claritin allergy drug, said CFO Bertolini.
▲ Global Cholesterol Franchise revenues were off 24 percent, worldwide, in the fourth quarter of 2008.
▲ In the US, Vytorin/Zetia sales were off by 35 percent in the fourth quarter of 2008.
▲ CFO Bertolini expects continuing "currency headwind" through 2009 -- it reduced 2008 sales by 6 percent.
▲ The worldwide sales-revenue line miss was a very significant miss: $4.3 billion ACTUAL, as opposed to the EXPECTED $4.5 billion. The actual $4.3 billion included $1.3 billion in sales of products from the OBS acquisition and an unfavorable impact from foreign exchange of 6 percent. . . .
What to expect? Per this wire-story:
". . . .BY THE NUMBERS: Analysts polled by Thomson Financial expect, on average, earnings per share of 30 cents and revenue of $4.52 billion. In the year-earlier period the company lost $2.08 per share, on a charge for the $14.4 billion Organon purchase. Revenue was $3.72 billion.
In the PRIOR quarter, earnings per share fell to 24 cents per share, from 34 cents a share in the 2007 period. . . .
. . . .But the cholesterol joint venture represents half of Schering-Plough's profits, and sales of those drugs, Zetia and Vytorin, have been hammered for a year by reports questioning their efficacy and safety.
Ryan expects sales of both to be down a third or more in the fourth quarter, although earlier this month, the Food and Drug Administration said patients should not stop taking them or other other cholesterol-lowering drugs. Still, Ryan writes that the company "is no longer a growth story, but a cost-cutting one."
Credit Suisse analyst Catherine Arnold expects the company to end 2008 with a low tax rate, only in the mid- to high teens. . . ."
Will SGP meet the lowered bar? Or will it miss it?
What do you think?
I'll also likely live-blog at least some of the Merck Earnings Call, same time tomorrow -- 8 am EST.