Schering-Plough Reports Financial Results for First Quart...(lesterol joint ventureand incurs substan...)

Date:4/23/2008

lesterol joint venture and incurs substantial costs such as selling, general and administrative costs that are not reflected in "Equity income" and are borne by the overall cost structure of Schering-Plough. As a result, Schering-Plough's gross margin and ratios of selling, general and administrative (SG&A) expenses and R&D expenses as a percentage of sales do not reflect the benefit of the impact of the cholesterol joint venture's operating results.

Schering-Plough's gross margin on a GAAP basis was unfavorably affected by purchase accounting adjustments and as a result was 54.1 percent for the 2008 first quarter as compared to 68.5 percent in the 2007 period. The gross margin percentage excluding purchase accounting adjustments was 68.9 percent in the first quarter of 2008.

SG&A expenses were $1.7 billion in the first quarter of 2008 versus $1.2 billion in the prior-year period. SG&A in the first quarter of 2008 increased primarily due to the impact of the inclusion of SG&A expenses from OBS and foreign exchange.

Research and development spending for the 2008 first quarter increased to $880 million compared to $707 million in the first quarter of 2007. Included in R&D spending in the first quarter of 2007 was $96 million related to upfront payments made for licensing transactions. The increase in R&D expenses was due to the inclusion of OBS expenses, higher spending for clinical trials and related activities, and investments to build greater breadth and capacity to support Schering-Plough's expanding R&D pipeline.

Recent Developments

The company also offered the following summary of recent significant developments that have previously been announced, including:

-- Entered into an expanded agreement with OraSure Technologies, Inc. to

include worldwide rights to develop and promote a rapid oral hepatitis

C virus (HCV) test. (Announced Feb. 11)

-- Announced submission to the U.S. Food and Drug
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SOURCE Schering-Plough Corporation Copyright©2008 PR Newswire. All rights reserved

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