tag:blogger.com,1999:blog-4241416962008169508.post4276932296071319002..comments2024-03-29T10:23:47.050-04:00Comments on Just A Life Sciences Blog...: A Great Editorials [plural!], on Ezetimibe studies fallout -- Courtesy of a Regular Reader. . . .Unknownnoreply@blogger.comBlogger4125tag:blogger.com,1999:blog-4241416962008169508.post-7402946967999001462023-11-11T00:35:36.398-05:002023-11-11T00:35:36.398-05:00Once more, at 10:27 pm… sleep well!Once more, at 10:27 pm… sleep well!condorhttps://www.blogger.com/profile/11014613306197942748noreply@blogger.comtag:blogger.com,1999:blog-4241416962008169508.post-6894202362607010782008-08-03T22:22:00.000-04:002008-08-03T22:22:00.000-04:00I decided to leave this as comment box matter, for...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. . . .<BR/><BR/>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:<BR/><BR/>". . . .<I>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]</I>. . . ."<BR/><BR/>That is Note 2 to Schering's Q2 Press Release -- Now, the Q1 Note 2 text:<BR/><BR/>". . . .<I>Cost of sales for the three months ended March 31, 2008 includes purchase accounting adjustments of $688 million related to the acquisition of [Organon]</I>. . . ."<BR/><BR/>[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 <B>unduly optimistic assumptions</B> about inventory values, in <B>prior</B> periods, though.]<BR/><BR/>In any event, I am struck by the quarter-to-quarter volatility there -- $688M in Q1, but "only" $354M in Q2. . .<BR/><BR/>Two to one, almost. And this would likely hold to a common pattern -- at most companies with large restructurings (and thus charges) in process. . . .<BR/><BR/>That volatility, in turn, will distort Jim's ratio of Gross Profit to S,G&A -- as it flows right through, right?<BR/><BR/>I think so.<BR/><BR/>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.<BR/><BR/>NamsteAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4241416962008169508.post-67341477591969295932008-08-03T21:00:00.000-04:002008-08-03T21:00:00.000-04:00A regular reader had submitted this link, Jim -- a...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. . . .<BR/><BR/>Good stuff!<BR/><BR/>Thanks!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4241416962008169508.post-90388761366593943522008-08-03T20:33:00.000-04:002008-08-03T20:33:00.000-04:00You might enjoy this: Is Schering-Plough’s ‘Produc...You might enjoy this: Is Schering-Plough’s ‘Productivity Transformation Program’ Actually Making S-P Less Productive?<BR/><BR/>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/Anonymousnoreply@blogger.com