schering plough 2000annual

3,436 views

Published on

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
3,436
On SlideShare
0
From Embeds
0
Number of Embeds
6
Actions
Shares
0
Downloads
32
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

schering plough 2000annual

  1. 1. Schering-Plough Corporation 2 0 0 0 A N N U A L R E P O RT
  2. 2. Schering-Plough Corporation PROFILE Schering-Plough is a worldwide pharmaceutical company committed to discovering, developing and marketing new therapies and treatment programs that can improve people’s health and extend lives. The Company is a recognized leader in biotechnology, genomics and gene therapy. Core product groups are allergy and respiratory, anti-infective and anticancer, cardiovasculars and dermatologicals. Schering-Plough also has a global animal health business as well as leading consumer brands of foot care, over-the-counter and sun care products. Innovative research, effective marketing and solid financial management have enabled the Company to grow and deliver attractive financial results. 2000 HIGHLIGHTS 15TH CONSECUTIVE YEAR OF DOUBLE-DIGIT GROWTH IN EARNINGS PER SHARE. 17TH DIVIDEND INCREASE SINCE 1986. 10 SHARE REPURCHASE PROGRAMS COMPLETED SINCE 1983; CURRENT $1.5 BILLION PROGRAM ONGOING. PA RT N E R S H I P S F O R M E D W I T H MERCK & CO., INC. TO DEVELOP AND M A R K E T I N T H E U N I T E D S TAT E S N E W MEDICINES IN CHOLESTEROL-MANAGEMENT A N D R E S P I R AT O RY T H E R A P Y A R E A S . E I G H T M A R K E T I N G A P P R O VA L S R E C E I V E D F O R M A J O R P R O D U C T S O R I N D I C AT I O N S . 1 4 M A R K E T I N G A P P L I C AT I O N S F I L E D F O R M A J O R P R O D U C T S O R I N D I C AT I O N S . COVER Identifying natural and synthetic compounds that interact with drug targets and then determining their molecular structure can be key to discovering potential therapeutic agents. Photo depicts a sample compound being inserted for analysis using nuclear magnetic resonance (NMR) technology. The trademarks indicated by CAPITAL LETTERS in this Annual Report are the property of, licensed to, promoted or distributed by Schering-Plough Corporation, its subsidiaries or related companies. As used in this Annual Report, the terms “Schering-Plough” and the “Company” refer collectively to Schering-Plough Corporation, a holding company, and its domestic and international operating subsidiaries, which are engaged in the discovery, development, manufacturing and marketing of pharmaceutical products worldwide. Copyright © 2001, Schering-Plough Corporation. All Rights Reserved. 2 S C H E R I N G - P L O U G H C O R P O R AT I O N
  3. 3. financial highlights Percent 2000 1999 (Dollars in millions, except per share figures) Change Operating Results Net sales $ 9,815 $ 9,116 8% Income before income taxes 3,188 2,795 14% Net income 2,423 2,110 15% Diluted earnings per common share 1.64 1.42 15% Investments Research and development $ 1,333 $ 1,191 12% Capital expenditures 763 543 40% Financial Condition Return on average shareholders’ equity 42.9% 46.0% Total assets $ 10,805 $ 9,375 Shareholders’ equity 6,119 5,165 Other Data Cash dividends per common share $ .545 $ .485 Number of employees 28,100 26,500 Average shares outstanding for diluted EPS (in millions) 1,476 1,486 DILUTED EARNINGS PER COMMON SHARE NET INCOME DIVIDENDS PER COMMON SHARE dollars dollars in millions dollars 2,423 .545 2,110 1.64 .485 1.42 .425 1,756 .368 1.18 1,444 .320 1,213 .97 .82 96 97 98 00 99 96 97 98 00 99 96 97 98 00 99 contents 01 financial highlights 02 letter to shareholders 04 worldwide pharmaceuticals and research 14 sales by major therapeutic categories 15 financial section 37 directors and officers 37 investor information S C H E R I N G - P L O U G H C O R P O R AT I O N 0 1
  4. 4. letter to shareholders For the 15th consecutive year, Schering-Plough in 2000 recorded MARKETING ACHIEVEMENTS Worldwide pharmaceutical sales in double-digit growth in diluted earnings per share, which rose 15 2000 grew 8 percent to $8.3 billion. Leading pharmaceutical sales percent to $1.64 from $1.42 in the prior year. Net income totaled for the year was our CLARITIN line of nonsedating antihistamines, $2.4 billion versus $2.1 billion in 1999. Worldwide sales for the year the largest selling in the world. Worldwide sales of CLARITIN increased were up 8 percent to $9.8 billion. Excluding foreign exchange, sales 13 percent to $3.0 billion. rose 10 percent. Growth was paced by worldwide pharmaceuticals, Building on the strength of the CLARITIN franchise in world allergy which contributed 85 percent of total Company sales. markets is expected to be CLARINEX (desloratadine), a new once-daily Schering-Plough recorded other notable achievements during nonsedating antihistamine. In January 2001, the product gained the year. We gained marketing approvals for eight major products European Union (EU) approval for the treatment of seasonal allergies, or indications in the United States or internationally. We filed and it also received a U.S. approvable letter. Schering-Plough 14 regulatory applications for major products or indications. We is working to expand its global allergy/respiratory franchise with strengthened our research and development programs by entering NASONEX, a nasal-inhaled steroid for allergies, and ASMANEX, an into eight research collaborations and recommending that five new orally inhaled steroid for asthma. In 2000, NASONEX continued to compounds advance into development. gain market share in the United States and major international markets. ASMANEX has been approved for use in eight international ADVANCES IN RESEARCH Schering-Plough’s record of success countries, including Canada. proceeds from a tradition of growth through research, as evidenced by steadily increasing expenditures for research and development. Our alpha interferon franchise for treating various cancers and In 2000, R&D spending rose 12 percent to $1.3 billion. viral diseases was a major contributor in 2000, with worldwide sales increasing 21 percent to $1.4 billion. The product line consists Targeting specific therapeutic areas, Schering-Plough has built a of INTRON A; REBETRON Combination Therapy, containing REBETOL strong in-house organization to generate promising drug candidates Capsules and INTRON A Injection; and PEG-INTRON, a longer-acting and critically assess external opportunities. We actively seek to expand form of INTRON A. REBETRON Combination Therapy is the current stan- our pipeline through licensing agreements for new compounds and dard of care for treating hepatitis C, a serious disease affecting some advanced research technologies. 10 million people in major world markets. PEG-INTRON was approved in May in the EU and in January 2001 in the United States to treat An important collaboration was announced in May, when we entered hepatitis C. In December, the EU’s regulatory agency recommended into two partnerships with Merck & Co., Inc. One partnership is approval of the combination use of PEG-INTRON and REBETOL for seeking to develop for the U.S. market a once-daily fixed-combination hepatitis C. This combination is expected to become the new stan- tablet of ezetimibe, the Company’s novel cholesterol absorption dard of care. A U.S. application for the combination use was submit- inhibitor, and Merck’s cholesterol-management medicine Zocor, as ted in February 2001. well as use of ezetimibe as monotherapy and co-administered with other statins. The other partnership is pursuing development in Schering-Plough is increasing its presence in the areas of cancer and the United States of a once-daily fixed-combination tablet containing inflammatory diseases. Sales of TEMODAR, a brain cancer treatment, our nonsedating antihistamine CLARITIN and Merck’s leukotriene topped $100 million for the first time in 2000. In June, REMICADE, receptor antagonist Singulair for treating allergic rhinitis and asthma. an anti-inflammatory agent, received EU marketing authorization for combination use in treating rheumatoid arthritis, with an expanded indication approved in February 2001. The product is licensed for 0 2 S C H E R I N G - P L O U G H C O R P O R AT I O N
  5. 5. RICHARD JAY KOGAN (LEFT) AND RAUL E. CESAN marketing in most non-U.S. countries from Centocor, Inc., a unit FDA regarding the quality and reliability of our manufacturing systems of Johnson & Johnson. and controls. In cardiovasculars, INTEGRILIN Injection, a platelet aggregation We continue to strive to conduct all aspects of our business inhibitor, has become the most widely used GP IIb/IIIa inhibitor according to the highest ethical standards and in compliance with in the United States. Through a licensing agreement with COR all applicable laws and regulations. We believe that our products Therapeutics, Inc., Schering-Plough co-markets INTEGRILIN in the deliver quality and value to patients and the medical community, United States and markets the product in Europe. and that we have priced them responsibly. The Company recognizes its obligations to be a good corporate citizen and seeks to fulfill Contributing to Schering-Plough’s success in 2000 were our animal those responsibilities. Philanthropic contributions in 2000 totaled health and consumer products business units. Animal health sales $6.0 million, including those from the Schering-Plough totaled $720 million. Our DR. SCHOLL’S line of foot care products Foundation and direct or in-kind corporate gifts. and the COPPERTONE and BAIN DE SOLEIL sun care lines together hold well-established No. 1 positions in their North American We are pleased to welcome David H. Komansky, chairman and chief markets. The Company’s over-the-counter products include some executive officer of Merrill Lynch & Co., Inc., who was elected to the of the best-known U.S. brands. Board of Directors effective November 1, 2000. CORPORATE DEVELOPMENTS Schering-Plough’s capital investments At year-end, Hugh A. D’Andrade, vice chairman and chief totaled $763 million in 2000. A $450 million expansion of our administrative officer, retired from his corporate and Board positions. Singapore manufacturing facilities was initiated in December 2000. In Mr. D’Andrade has been an integral part of Schering-Plough’s July, Schering-Plough announced an agreement to purchase progress for nearly 20 years and a valued member of our leadership Novartis Pharmaceuticals Corporation’s research and office facility team. We are grateful to him for his many contributions. in Summit, N.J. This past fall we opened a new world headquarters Schering-Plough demonstrated in 2000 that we have the expertise, at our Kenilworth, N.J. campus. resources and drive to compete and succeed in the global The Board of Directors in April 2000 authorized Schering-Plough’s pharmaceutical marketplace. We are confident our strengths will 17th increase in the quarterly dividend since 1986, raising enable us to build on that record in the years ahead. the quarterly payment by 12 percent to 14 cents per share. A $1.5 billion share repurchase program begun in April 2000 was 33 percent complete by year-end 2000. Since 1983, the Company has bought back the equivalent of 789 million shares at a cost of approximately $5.9 billion. RICHARD JAY KOGAN Chairman and Chief Executive Officer Schering-Plough in February 2001 reported on U.S. manufacturing process and control issues, critical findings from facility inspections by the U.S. Food and Drug Administration (FDA) and the negative impact these issues are expected to have on our 2001 financial results. For details see page 19. We are taking full responsibility for resolving RAUL E. CESAN these matters in a timely manner and securing the confidence of the President and Chief Operating Officer February 16, 2001 S C H E R I N G - P L O U G H C O R P O R AT I O N 0 3
  6. 6. worldwide pharmaceuticals and research allergy and respiratory Schering-Plough’s success in the worldwide pharmaceutical The Company’s next-generation marketplace stems from its commitment to innovative research allergy treatment, CLARINEX MARKETED PRODUCTS and effective execution of global marketing programs. (desloratadine), is a new once- Building on strong and growing daily nonsedating antihistamine Consolidated worldwide sales rose 8 percent in 2000, led by product lines, allergy/respiratory for the treatment of seasonal Schering-Plough’s global pharmaceuticals business. U.S. sales rose is Schering-Plough’s largest allergic rhinitis (SAR). In 9 percent and international sales grew 6 percent, with pharmaceutical therapeutic product category. January 2001, the European products generating 85 percent of total sales. Also contributing were Worldwide sales increased Union (EU) granted marketing the Company’s global animal health business and its consumer lines 9 percent to $4.2 billion authorization for desloratadine of foot care, over-the-counter and sun care products. in 2000. 5 mg tablets for the treatment of SAR in adults and children The United States, as the world’s largest pharmaceutical market, Schering-Plough is establishing 12 years of age and older. A historically has produced the majority of Schering-Plough’s sales. a global allergy/respiratory fran- highly potent H1 receptor While the Company expects this country to remain its largest market, chise with new and established antagonist, desloratadine taken it also foresees major growth opportunities in international markets, products that are steadily once daily provides 24-hour notably in Europe. In that region, Schering-Plough has new products, producing higher sales in most relief from nasal and non-nasal both on the market and undergoing regulatory review, in therapeutic major markets. The Company symptoms of SAR and, in clini- areas where the Company has not previously competed. holds the leading position in the cal trials, significantly reduced U.S. allergy/respiratory market total symptom scores associat- Helping fuel this growth has been the steady expansion of the and is embarking on a major ed with seasonal allergies. Company’s sales force, both internationally and in the United States. drive to extend that position The sales force has grown to approximately 12,400 worldwide, with on a worldwide basis. A U.S. approvable letter for about 4,700 in the United States and 7,700 internationally. the 5 mg tablet formulation of The Company’s strong U.S. CLARINEX was issued in January Schering-Plough’s research and development efforts focus position has been led by sales of 2001. Regulatory applications on therapeutic areas where there are opportunities to achieve the CLARITIN (loratadine) family have been submitted in the EU significant medical advances. Research targets include allergic and of nonsedating antihistamine and the United States for other inflammatory disorders, infectious diseases, oncology, cardiovascular products. Worldwide CLARITIN CLARINEX formulations and disease and central nervous system disorders. In 2000, five discovery sales increased by 13 percent in indications, including a rapidly compounds were recommended to advance into clinical development. 2000 to $3.0 billion, with $2.6 disintegrating tablet, a twice-daily billion generated in the United The Company has systematically integrated new technologies into version with a decongestant States. Decongestant formula- its drug discovery and development programs. These technologies and a pediatric syrup formula- tions represented 27 percent of include genomics, combinatorial chemistry, automated high-through- tion, and for use in treating CLARITIN sales, or $817 million. put screening and structure-based drug design. Schering-Plough chronic idiopathic urticaria (CIU), also actively supplements in-house research efforts by licensing or hives of unknown cause. potential new therapies and research technologies. R&D investments in 2000 rose 12 percent to $1.3 billion. 0 4 S C H E R I N G - P L O U G H C O R P O R AT I O N
  7. 7. REVIEWING PLANS FOR CLARINEX (LEFT PHOTO), A NEW ONCE-DAILY NONSEDATING ANTIHISTAMINE, ARE MARKETING TEAM MEMBERS, FROM LEFT, GRETA KELLER, DIRECTOR; JAMES ROBINSON, DIRECTOR; AND LUIS SALMUN, M.D., DIRECTOR. REAGENTS AND BUFFERS (RIGHT PHOTO) ARE USED TO PURIFY PROTEINS BY SCIENTISTS SEARCHING FOR NEW THERAPEUTIC ENTITIES. The success of CLARITIN has In August 2000, the FDA An important part of approved in the United States been due to its unique combi- granted CLARITIN six months of Schering-Plough’s drive to for the prevention of nasal nation of benefits. A once-daily, additional marketing exclusivity, expand its global allergy/ symptoms of SAR in adults and nonsedating antihistamine, covering all five formulations respiratory franchise is NASONEX children as young as age 12. CLARITIN provides safe and of the product, as a result of (mometasone furoate monohy- The Company holds a U.S. effective relief from seasonal the Company’s having conducted drate), a potent, once-daily nasal patent that is set to expire in allergies with flexible and con- pediatric clinical trials. The spray for allergies. Sold in 57 2017 for mometasone furoate venient dosing. In major world six-month period of marketing countries, the product offers a monohydrate, the active ingre- markets, the product is available exclusivity is added to the rapid onset of action, favorable dient in NASONEX. in as many as five formulations. expiration dates of all patents side-effect profile and low In the EU, NASONEX is marketed These include CLARITIN Tablets, covering CLARITIN. systemic absorption. for use in children 6 to 11 years a once-daily antihistamine; Schering-Plough owns or has Worldwide sales of NASONEX of age for the once-daily treat- CLARITIN-D 24 Hour (loratadine/ licensed several loratadine- increased 60 percent in 2000 ment of symptoms of seasonal pseudoephedrine sulfate) related patents. The loratadine to $415 million. NASONEX allergic or perennial allergic Extended Release Tablets, compound patent in the United continues to capture U.S. rhinitis. In France, NASONEX is a once-daily version with a States is set to expire in market share formerly held by indicated for use in children as decongestant; CLARITIN-D 12 June 2002 and the compound VANCENASE (beclomethasone young as age 3. The product Hour, a twice-daily version with patent for desloratadine in dipropionate), the Company’s holds the No. 2 position in the a decongestant; CLARITIN Syrup, April 2004. A fluoroloratadine predecessor nasal-inhaled world nasal-inhaled steroid a syrup formulation for children; patent is due to expire in 2008, steroid. Combined worldwide market and leading positions in and CLARITIN REDITABS, a and a formulation patent for sales of NASONEX and VANCENASE several major markets in the once-daily product in a rapidly CLARITIN-D 24 Hour is due to rose 24 percent to $590 million EU and Latin America. disintegrating tablet. expire in 2012. in 2000. At year-end, the Asthma affects millions of Based on the results of pediatric two products held a 33 percent The Company also has licensed people worldwide and represents trials, the U.S. Food and share of the U.S. nasal-inhaled from Sepracor Inc. patent rights a growing public health concern in Drug Administration (FDA) in steroid category. covering certain uses of major world markets, particularly December approved broader desloratadine that expire in In the United States, NASONEX given its increased incidence in product labeling for CLARITIN 2014. In August 2000, a U.S. is marketed for the treatment pediatric populations. Syrup to include children 2 to formulation patent covering of nasal symptoms of seasonal 5 years old for the relief of nasal desloratadine-related products and perennial allergic rhinitis and non-nasal symptoms of SAR was issued to Schering-Plough in children as young as 3 years and the treatment of CIU. that expires in 2019. of age. NASONEX is the only drug CLARITIN Syrup is the only in its class to be indicated for nonsedating antihistamine children as young as age 3, and approved for children as young the only nasal-inhaled steroid as age 2. S C H E R I N G - P L O U G H C O R P O R AT I O N 0 5
  8. 8. DISCUSSING NEW RESPIRATORY THERAPIES (LEFT PHOTO) ARE GARY MCWALTERS, SENIOR PRODUCT MANAGER, AND LINDA ARMSTRONG, M.D., DIRECTOR, CLINICAL RESEARCH, ALLERGY. CARMINE GIANNETTA, PROCESS DEVELOPMENT SPECIALIST (RIGHT PHOTO), MONITORS A 30-LITER CELL CULTURE BIOREACTOR AT A COMPANY FACILITY IN UNION, N.J. ASMANEX (mometasone furoate), in the United States. A In May 2000, the Company antibody to the cytokine an orally inhaled steroid, is the Company subsidiary, Warrick formed a partnership with interleukin-5 (IL-5). Anti-IL-5 Company’s next-generation Pharmaceuticals, markets Merck & Co., Inc. to develop is designed to block the treatment for asthma. ASMANEX generic albuterol products. and market in the United migration of inflammatory TWISTHALER, a dry powder inhaled States a once-daily fixed- eosinophils to the lungs, thus PRODUCTS IN DEVELOPMENT formulation, has received combination tablet containing offering promise as a long-acting Building upon its 50-year history regulatory approvals in eight CLARITIN and Singulair asthma treatment. as a leader in developing countries, including Canada. (montelukast sodium) for the therapies for allergy and An early stage collaborative ASMANEX uses a state-of-the-art treatment of allergic rhinitis asthma, Schering-Plough is effort with Chiroscience Group delivery device designed to and asthma. Singulair is pursuing new and more plc (merged with Celltech Group offer a simplified inhalation Merck’s once-daily leukotriene effective therapies to prevent plc) has identified a potent and delivery system powered by the receptor antagonist for the or block the body’s allergic highly selective oral inhibitor of patient’s own inhalation and free treatment of asthma. A CLARITIN/ and immunological responses. the phosphodiesterase type 4 of any chlorofluorocarbon (CFC) Singulair fixed-combination (PDE 4) enzyme, a component propellants. Under regulatory tablet may have the potential In December 2000, the of the body’s inflammatory review in the United States, to treat seasonal allergies by Company submitted marketing response mechanism. Such ASMANEX may offer improved blocking two key mediators of applications to the FDA for three inhibitors may be effective as pharmacological benefits, low inflammation in the respiratory new CLARINEX formulations: a oral treatments for asthma and systemic absorption and the tract (histamine and fixed combination of deslorata- other inflammatory diseases. convenience of once-daily dos- leukotrienes). The combination dine and the decongestant The compound is in early ing. A U.S. approvable letter therapy is in Phase III studies pseudoephedrine sulfate as a phase studies. was received in October 1999. for the treatment of SAR. twice-daily treatment of SAR in adults and children 12 years of Through a new collaboration The Company’s other asthma A metered-dose, CFC-free age and older; a syrup form for and licensing agreement, the products include VANCERIL (non-chlorofluorocarbon) the treatment of SAR and CIU Company is working with Texas (beclomethasone dipropionate), inhaled version of ASMANEX is in patients as young as 2 years Biotechnology Corporation to an orally inhaled steroid for in Phase III studies for the of age; and a rapidly disintegrat- discover, develop and commer- asthma, with 2000 sales of treatment of asthma. ing tablet formulation. A U.S. cialize VLA-4 antagonists, a $127 million, down 29 percent regulatory application is also In pursuing new methods to new class of compounds being due primarily to manufacturing pending for CLARINEX in treating prevent or block allergic and studied as possible treatments issues; and PROVENTIL and other CIU. EU applications for treating immunologic responses, for asthma. albuterol products, with sales of CIU and for the syrup form were Schering-Plough researchers $197 million, down 21 percent filed in January 2001. Phase II are conducting Phase II clinical due to manufacturing issues and and Phase III studies for various studies with a monoclonal continued generic competition line extensions are ongoing. 0 6 S C H E R I N G - P L O U G H C O R P O R AT I O N
  9. 9. RESEARCH SCIENTISTS, FROM LEFT, BIRENDRA PRAMANIK, PH.D., AND YAN-HUI LIU, PH.D., USE MASS SPECTROMETERS TO CHARACTERIZE THE STRUCTURE OF SMALL MOLECULES AND PROTEINS IN THE EARLY DRUG DISCOVERY PROCESS. PHOTO AT RIGHT SHOWS A DETAILED VIEW OF A MASS SPECTROMETER. An expanded research agreement expand, creating a major stage liver disease is the most leading cause of chronic liver with Genome Therapeutics Corp. franchise for the Company and frequent indication for liver disease and the most common (GTC) enables Schering-Plough driving sales higher. transplantation among adults. reason for liver transplants in to use GTC’s high-throughput Europe, where some 5 million Schering-Plough’s research A major advance in the treat- positional cloning, bioinformatics people are estimated to be into the use of INTRON A to treat ment of hepatitis C came in and genomics sequencing chronically infected. hepatitis C has led to the June 1998 with the U.S. intro- capabilities to identify asthma- Company’s becoming the world duction of Schering-Plough’s In October, the United susceptibility genes that may be leader in discovering and REBETRON Combination Therapy, Kingdom’s National Institute useful in the development of developing new therapies for containing REBETOL (ribavirin) for Clinical Excellence (NICE) novel asthma therapies. the disease, one of the most Capsules and INTRON A Injection. issued clinical guidance prevalent worldwide public This combination therapy recommending the combination health threats. This serious quickly became the worldwide use of interferon alpha and anti-infective and disease affects as many as standard of care for treating the ribavirin for the treatment of anticancer 10 million people in major disease. Schering-Plough has moderate to severe hepatitis C. world markets, including about exclusive rights to market oral The next advance in treating MARKETED PRODUCTS 4 million in the United States. ribavirin for hepatitis C in all Fueled by growth in U.S. and hepatitis C is expected to be the Despite the seriousness of the major world markets through a major international markets, the combination use of PEG-INTRON disease, only about 10 to licensing agreement with ICN Company’s anti-infective/anti- (peginterferon alfa-2b) with 15 percent of patients with Pharmaceuticals, Inc. In cancer product group achieved REBETOL. PEG-INTRON is a longer- hepatitis C have been treated. November 2000, an application 16 percent higher sales in acting form of INTRON A that was submitted to the U.S. Food 2000 to total $2.0 billion. According to the Centers for uses proprietary PEG technology and Drug Administration (FDA) Disease Control and Prevention, developed by Enzon, Inc. seeking approval to market The anticancer/antiviral agent approximately 70 percent of REBETOL separately for use in INTRON A (interferon alfa-2b Use of PEG-INTRON as U.S. patients infected with combination with INTRON A for the recombinant) Injection is the once-weekly monotherapy to hepatitis C go on to develop treatment of chronic hepatitis C. world’s largest-selling alpha treat chronic hepatitis C was chronic liver disease. Hepatitis C interferon and has been the approved in the EU in May infection contributes to the In the European Union (EU), foundation for Schering-Plough’s and in the United States in deaths of an estimated 8,000 to the use of REBETOL Capsules success in this product category. January 2001, making it 10,000 Americans each year, in combination with interferon The broad medical utility of the first pegylated interferon and the toll is expected to triple alfa-2b injection (marketed alpha interferon, used as approved for marketing in by the year 2010, exceeding the as INTRON A in certain EU monotherapy, in combination the world. In clinical studies, number of annual deaths due countries) has gained rapid, with other agents and most once-weekly administration of to AIDS. The American Liver widespread acceptance among recently in a longer-acting PEG-INTRON has been shown to Foundation has reported that physicians treating hepatitis C formulation, has continued to be significantly more effective hepatitis C-associated end- patients. The disease is the S C H E R I N G - P L O U G H C O R P O R AT I O N 0 7
  10. 10. CONFERRING WITH A PATIENT (LEFT PHOTO) ABOUT TREATMENT OF CHRONIC HEPATITIS C IS DR. CHRISTINA MONDORF IN FRANKFURT, GERMANY. PEG-INTRON IS APPROVED FOR TREATING CHRONIC HEPATITIS C IN THE UNITED STATES AND THE EUROPEAN UNION. X-RAY CRYSTALLOGRAPHY (RIGHT PHOTO) CAN ACCELERATE DRUG DISCOVERY BY PROVIDING 3-D STRUCTURES OF POTENTIAL DRUG MOLECULES BOUND TO THEIR PROTEIN TARGETS. in treating hepatitis C than on health care systems if not service, is available to for refractory anaplastic astro- INTRON A, with a similar safety properly treated. hepatitis B and hepatitis C cytoma, making it the first new profile and the convenience patients in the United States. chemotherapy agent for this INTRON A is also approved of less-frequent dosing. type of brain tumor approved in for several cancer indications, A new program under develop- the United States in 20 years. In December 2000, the including use as an adjuvant ment is geared to patients who Schering-Plough has exclusive EU’s Committee for Proprietary treatment to surgery in patients have been diagnosed with worldwide rights to market temo- Medicinal Products (CPMP) with malignant melanoma. hepatitis C but are not yet on zolomide through a licensing recommended approval of the Results of a study presented in any therapy. A personalized agreement with Cancer Research combination use of PEG-INTRON October at the 25th Congress nurse counselor provides Campaign Technology, Ltd. and REBETOL Capsules for of the European Society of education about the disease, treating both relapsed and Medical Oncology confirmed including transmission and Schering-Plough entered into naïve (previously untreated) the significant and consistent risk factors. The Company also a co-promotion agreement in adult hepatitis C patients. The efficacy of INTRON A in high-risk offers CROSSING BRIDGES, a March 2000 with Bristol-Myers CPMP recommendation serves melanoma patients. patient-support program Squibb Company to co-promote as the basis for a European designed to help malignant TEQUIN (gatifloxacin), a A multidose injection pen Commission approval, which melanoma patients adhere to broad-spectrum fluoroquinolone delivery system, which offers typically follows three to four their INTRON A dosing regimen. antibiotic. The product is co- six pre-measured injections months later. A U.S. application marketed by the two companies in a compact and easy-to-use The anticancer product for the combination use was in the United States for the delivery system, has been widely TEMODAR (temozolomide) has submitted in February 2001 treatment of community-acquired accepted by patients who gained increasing use as a with a request for priority review. respiratory infections. administer INTRON A at home. treatment for two serious and Combined worldwide sales of aggressive types of malignant REMICADE (infliximab), a novel Schering-Plough is committed INTRON A, REBETRON Combination brain cancer. Sales of TEMODAR anti-TNF antibody, has been to helping patients gain access Therapy and PEG-INTRON were $121 million for the year, marketed internationally since to medicines proven to be safe increased 21 percent to $1.4 surpassing the $100 million 1999 for the treatment of and effective at affordable billion in 2000. The higher sales mark for the first time. Crohn’s disease, a chronic and prices. Its COMMITMENT TO CARE sales reflected the significant An oral cytotoxic, alkylating debilitating disorder of the patient-assistance program is treatment advance afforded by agent, the product is approved gastrointestinal tract that often designed to ensure that no REBETRON Combination Therapy in the EU for the treatment of occurs in young adults and can patient is denied access to and the increased recognition by patients with glioblastoma seriously diminish a patient’s the Company’s oncology and the public, medical community multiforme showing progression quality of life. biotechnology products and governments of the or recurrence after standard because of an inability to pay. seriousness of the disease and therapy and for anaplastic Schering-Plough’s BE IN CHARGE its potential financial impact astrocytoma. The product program, a patient-counseling gained U.S. approval in 1999 0 8 S C H E R I N G - P L O U G H C O R P O R AT I O N
  11. 11. SCIENTISTS USE COMPUTER-ASSISTED DRUG DESIGN (LEFT PHOTO) TO VISUALIZE AND MANIPULATE MOLECULAR MODELS OF POTENTIAL NEW DRUGS. SENIOR SCIENTISTS LI XIAO, PH.D. (LEFT), AND JOSE DUCA, PH.D., ANALYZE THE STRUCTURE OF A POTENTIAL ANTICANCER AGENT. A ROBOTIC LIQUID HANDLING SYSTEM (RIGHT PHOTO) IS USED TO DETERMINE THE SOLUBILITY OF NEW COMPOUNDS. In June 2000, REMICADE with can occur and lead to permanent The oral chemotherapy agent PRODUCTS IN DEVELOPMENT methotrexate received EU disability. Schering-Plough has Schering-Plough has targeted TEMODAR is the lead compound marketing authorization for international marketing rights, the fields of cancer, infectious in a new class of compounds the reduction of the signs excluding Japan and parts of diseases and immunology known as imidazotetrazines. The and symptoms of rheumatoid the Far East, for REMICADE from as areas of major focus for product, approved for treating arthritis (RA) in patients Centocor, Inc., a Johnson & its research efforts. The certain brain cancers, is in with active disease when the Johnson subsidiary. Company’s success is evident Phase II development for treating response to other available in its growing portfolio of new various solid tumors. Studies are Other cancer therapies treatments has been inadequate. and innovative compounds in exploring different dosing regi- include ETHYOL (amifostine), a REMICADE not only has been development and products mens and its use in combination cytoprotective agent licensed for shown to relieve RA symptoms, launched in global markets. with other chemotherapy agents. international marketing from but also has demonstrated a MedImmune, Inc., and CAELYX PEG-INTRON, a longer-acting In development for malignant reduction in the rate of joint (pegylated liposomal doxorubicin formulation of INTRON A, is melanoma is MELACINE, a ther- damage in some patients, as HCl), a long-circulating pegylated among the Company’s potential apeutic vaccine developed by verified by X-ray results. In liposomal formulation of the new therapies for treating various Corixa Corporation, which is in January 2001, the EU’s cancer drug doxorubicin. CAELYX cancers. The product is in Phase III studies as monotherapy regulatory agency approved received EU marketing approval Phase III clinical trials for for Stage II malignant melanoma a broader RA indication in October for the treatment chronic myelogenous leukemia and in combination with for REMICADE, including the of advanced ovarian cancer and malignant melanoma, and INTRON A for Stage IV of the improvement in physical func- in women who have failed a in early phase studies for a vari- disease. Schering-Plough has tion in patients and a reduction first-line platinum-based ety of solid tumors. PEG-INTRON exclusive worldwide marketing in the rate of the progression chemotherapy regimen. Canadian uses Enzon, Inc.’s proprietary rights to this agent from Corixa. of joint damage. approval was granted in January drug-delivery system. Seeking to gain expanded In Europe, an estimated 2001. Schering-Plough has Approved as once-weekly indications for marketed 2.5 million people – mostly exclusive international marketing monotherapy for the treatment products, the Company is women – are affected by RA, rights to CAELYX, except in Japan of hepatitis C, PEG-INTRON is conducting Phase III studies which is a chronic and often and certain other countries, under U.S. and EU regulatory of CAELYX in breast cancer. painful disease characterized through a distribution agreement review in combination with by inflammation of the joints. with ALZA Corporation. A farnesyl protein transferase REBETOL for the treatment As the disease progresses, ALZA markets the product in (FPT) inhibitor from of chronic hepatitis C. The joints become swollen, inflamed, the United States under the Schering-Plough Research EU’s CPMP in December painful and stiff. When trade name Doxil. Institute is in Phase II trials recommended approval for inflammation persists or does as an oral therapy for several this combination use. not respond well to treatment, solid tumors. Research is destruction of nearby cartilage, focused on inhibiting the bone, tendons and ligaments S C H E R I N G - P L O U G H C O R P O R AT I O N 0 9
  12. 12. SCHERING-PLOUGH AND MERCK & CO., INC. (LEFT PHOTO) IN MAY 2000 FORMED PARTNERSHIPS TO DEVELOP AND MARKET NEW PRODUCTS IN THE U.S. CHOLESTEROL- MANAGEMENT AND RESPIRATORY MARKETS. PICTURED ARE, FROM LEFT, RATNAKAR MITRA, SCHERING-PLOUGH VICE PRESIDENT AND GENERAL MANAGER OF THE RESPIRATORY PARTNERSHIP, AND ROBERT MCMAHON, MERCK VICE PRESIDENT AND GENERAL MANAGER OF THE CHOLESTEROL PARTNERSHIP. PHOTO AT RIGHT DEPICTS A VIEW INSIDE SCHERING-PLOUGH’S NEW WORLD HEADQUARTERS IN KENILWORTH, N.J. action of the enzyme FPT, Also known to play a critical of novel target genes in two a platelet receptor glycoprotein which is involved in the growth role in virus infection and medically important fungal (GP) IIb/IIIa inhibitor for treating of solid tumors, including those transmission are chemokine pathogens, Candida albicans cardiovascular patients with of the bladder and lung, and receptors expressed on the and Aspergillus fumigatus. In acute coronary syndromes. in chronic myelogenous surface of immune cells. A the area of antibacterial INTEGRILIN, which helps prevent leukemia. small molecule CCR5 receptor research, Company scientists platelets from binding to antagonist identified by have identified novel target Schering-Plough continues to fibrinogen and forming blood Schering-Plough researchers is genes in gram-negative and explore the potential of gene clots, has become the in early phase development as gram-positive bacteria. These therapy to treat various diseases. most widely used GP IIb/IIIa an oral agent for treating HIV. findings may lead to the identi- Phase II studies with p53 inhibitor in the United States. fication of novel drug targets for tumor suppressor gene therapy Approved for the treatment of Worldwide sales increased broad-spectrum antibiotics. for treating ovarian cancer are Crohn’s disease and rheumatoid sharply to $172 million in ongoing. Further research in arthritis, REMICADE is in Phase In May 2000, the Company 2000, driven by increased this area is being conducted at III studies as a treatment discontinued the clinical U.S. market penetration due Canji, Inc., the Company’s cen- for early rheumatoid arthritis. development of ZIRACIN to positive results of a major ter for gene therapy discovery. (evernimicin), an intravenous clinical trial named ESPRIT. TENOVIL (interleukin-10), a antibiotic for treating drug- Interim results were first Schering-Plough research into cytokine cloned and expressed resistant bacterial infections. reported in February 2000, with new hepatitis C treatments at DNAX Research Institute, six-month results reported in has involved determining the is in Phase II trials for hepatic January 2001. The ESPRIT trial molecular structure of all fibrosis, a serious liver disorder, demonstrated a statistically cardiovasculars identified key enzymes of and in early phase development significant 35 percent reduction the hepatitis C virus (HCV). for various inflammatory in the combined incidence of MARKETED PRODUCTS Company scientists have disorders and viral diseases. death or heart attack over the six Schering-Plough’s growing identified the structure of an months following intracoronary In Phase III studies for treating presence in the worldwide enzyme complex that is stent implantation in patients serious opportunistic fungal cardiovascular marketplace essential to replication of HCV. receiving a stent and INTEGRILIN infections is posaconazole, a is expanding through internal Protease and helicase activities as compared to those patients highly potent antifungal agent. development programs and of NS3, a multifunctional receiving a stent and placebo. Schering-Plough’s activities strategic licensing agreements. HCV protein, are required for Launched in the United States in antifungal research include Sales for the cardiovascular viral maturation and replication. in 1998, INTEGRILIN has an agreement with Genome product group increased These unique, virally encoded the broadest U.S. labeling in Therapeutics Corp., which has 11 percent to $746 million enzymes are essential in its class. resulted in the identification, in 2000, driven by positive the life cycle of HCV and using proprietary genomic physician acceptance of constitute promising targets technologies, of a large number INTEGRILIN (eptifibatide) Injection, for drug intervention. 1 0 S C H E R I N G - P L O U G H C O R P O R AT I O N
  13. 13. A PROTEIN SEQUENCER (LEFT PHOTO) IS USED TO IDENTIFY PURIFIED PROTEINS IN THE DRUG DISCOVERY PROCESS. INTEGRILIN, A PLATELET-CLOTTING INHIBITOR (RIGHT PHOTO), IS THE MOST WIDELY USED DRUG IN ITS CLASS IN THE UNITED STATES. CARDIOLOGIST SABINO TORRE, M.D. (LEFT) AND DAVID PEARSALL, MEDICAL CENTER SPECIALIST, KEY ACUTE CORONARY SYNDROMES, CONFER IN A CATHETERIZATION LAB AT SAINT BARNABAS MEDICAL CENTER IN LIVINGSTON, N.J. In the European Union (EU), Sales of K-DUR, a sustained- An ezetimibe/Zocor fixed-com- A collaborative effort with INTEGRILIN is marketed for the release potassium chloride bination tablet has the potential AtheroGenics, Inc. is seeking to prevention of early myocardial supplement, rose 16 percent to achieve higher levels of cho- develop and commercialize infarction in patients with to $290 million in 2000. lesterol reduction through two drugs for the treatment and pre- acute coronary syndromes who Sales of IMDUR (isosorbide complementary mechanisms vention of restenosis in patients are managed medically and/or mononitrate), a once-daily, of action while maintaining a following PCI. AGI-1067 has with percutaneous coronary long-acting oral nitrate for good safety profile. been identified as the first in a intervention (PCI), also known angina, declined in 2000 to promising new class of orally Ezetimibe, a product of as angioplasty. $120 million due to continued delivered compounds known as Schering-Plough’s internal generic competition. A vascular protectants. The agent Schering-Plough, through a research efforts, has been Company subsidiary, Warrick is in early phase development licensing agreement with COR shown in clinical studies to Pharmaceuticals, markets a for the prevention of athero- Therapeutics, Inc., markets selectively inhibit the body’s generic version. sclerosis and restenosis. INTEGRILIN in Europe and ability to absorb cholesterol in co-markets the product with the intestine without interfering PRODUCTS IN DEVELOPMENT COR in the United States. Schering-Plough’s cardiovascu- with the absorption of other dermatologicals lar research program illustrates fat-soluble nutrients. Statins, Complementing INTEGRILIN how external licensing agree- such as Zocor, act primarily marketing efforts is a three-way MARKETED PRODUCTS ments and collaborations can by inhibiting the production collaboration with COR and Schering-Plough is well help realize the potential of of cholesterol in the liver. Genentech, Inc., announced in established as a leader in novel therapies. Ezetimibe is in Phase III trials January 2001, to co-promote world dermatological markets as monotherapy and as a co- INTEGRILIN, TNKASE In May 2000, the Company through nearly five decades administered agent with statins. (tenecteplase) and ACTIVASE formed a partnership with of research discoveries (alteplase, recombinant). Merck & Co., Inc. to develop and INTEGRILIN is in Phase II and product innovations. TNKASE and ACTIVASE are market in the United States studies as a treatment for Worldwide sales of the Genentech’s market-leading ezetimibe, Schering-Plough’s acute myocardial infarction. dermatological product group fibrinolytic therapies for the cholesterol absorption were $680 million in 2000, treatment of acute myocardial inhibitor, in three ways: as a approximately the same as infarction. The agreement once-daily fixed-combination the prior year. is expected to expand the tablet with Zocor (simvastatin), LOTRISONE (clotrimazole/ promotion of INTEGRILIN into Merck’s cholesterol-management betamethasone dipropionate) thousands of additional medicine; as a once-daily is the most-prescribed topical hospitals nationwide. monotherapy; and in co- administration with statins. S C H E R I N G - P L O U G H C O R P O R AT I O N 1 1
  14. 14. DISCUSSING EARLY PHASE CLINICAL DATA (LEFT PHOTO) OF AN ANTI-INFECTIVE COMPOUND ARE, FROM LEFT, BAHIGE BAROUDY, PH.D., DIRECTOR, ANTIVIRAL THERAPY, AND KATHLEEN COX, PH.D., SENIOR PRINCIPAL SCIENTIST. PHOTO AT RIGHT WAS TAKEN IN A SCHERING-PLOUGH RESEARCH LABORATORY IN KENILWORTH, N.J. central nervous system antifungal/anti-inflammatory To better focus its U.S. In early phase development is and other disorders cream in the United States, marketing resources on core an antagonist of the M2 subtype with a market share therapeutic areas, of the muscarinic acetylcholine MARKETED PRODUCTS approaching 60 percent. The Schering-Plough in 2000 receptor. This M2 antagonist Worldwide sales for the product line was expanded ended its 1998 agreement has the potential for enhancing Company’s other pharmaceuti- in December 2000 with U.S. with Novo Nordisk to memory function and may be cal product category were approval of a lotion formulation co-promote PRANDIN useful in the symptomatic treat- $716 million in 2000. of LOTRISONE. In 2000, (repaglinide), an oral ment of dementia associated worldwide sales decreased antidiabetic agent for the with Alzheimer’s disease. Schering-Plough has exclusive 2 percent to $192 million. treatment of Type 2 diabetes, worldwide rights, excluding In January 2000, the Company and a range of other insulin Japan, Taiwan and Korea, to Available in 64 countries, extended its collaboration with products and devices. market a line of buprenorphine ELOCON (mometasone furoate) the University of Toronto to hydrochloride products for holds the leading worldwide develop drugs to prevent and PRODUCTS IN DEVELOPMENT opiate addiction through a position among branded, Building on the Company’s treat Alzheimer’s disease. distribution agreement with medium-potency topical strengths in chemical Efforts are focused on the Reckitt & Colman plc. These steroids. Worldwide sales of synthesis and molecular function of presenilin genes as products include SUBUTEX, a ELOCON increased 2 percent biology, research efforts are possible tools for drug devel- sublingual tablet formulation of in 2000 to $171 million. progressing to discover and opment. buprenorphine, and SUBOXONE, develop medications that Also contributing to 2000 a sublingual tablet combination can treat cognitive disorders dermatological sales were of buprenorphine and naloxone. and degenerative nervous animal health Schering-Plough’s DIPROLENE SUBUTEX is marketed in system diseases. and DIPROSONE (betamethasone select international countries, MARKETED PRODUCTS dipropionate) lines including the United Kingdom, Ecopipam, a potent D1/D5 Sales for Schering-Plough’s of high-potency topical Germany and France, for the dopamine receptor antagonist, animal health business rose steroids, with combined sales treatment of opiate addiction. is in Phase II studies as a 7 percent in 2000 to $720 of $176 million. potential obesity-management In the United States, both million, including revenues therapy. Preclinical data suggest anti-addiction treatments are from the June acquisition of that the compound could under regulatory review and the animal health business of reduce food craving in patients have received approvable letters Takeda Chemical Industries, undergoing diet restrictions in from the U.S. Food and Drug Ltd. in Japan. Despite chal- a weight-loss program. Administration. lenging market conditions, Schering-Plough achieved higher sales for the year and ranks sixth largest in world animal health markets. 1 2 S C H E R I N G - P L O U G H C O R P O R AT I O N
  15. 15. VETERINARIAN KEITH WALL, D.V.M., TECHNICAL SERVICES MANAGER, SCHERING-PLOUGH ANIMAL HEALTH, IS PICTURED (LEFT PHOTO) AT HIS FARM IN NEW JERSEY. INNOVATIVE MARKETING EFFORTS (RIGHT PHOTO) SUPPORT THE DR. SCHOLL’S LINE OF FOOT CARE PRODUCTS. PICTURED ARE, FROM LEFT, SUE FULTON, SENIOR PRODUCT MANAGER, DR. SCHOLL’S, AND CLOVER BERGMANN, VICE PRESIDENT, MARKETING, SCHERING-PLOUGH HEALTHCARE PRODUCTS. foot care otc products sun care Higher sales were led by NUFLOR (florfenicol), a broad-spectrum MARKETED PRODUCTS MARKETED PRODUCTS MARKETED PRODUCTS antibiotic used to treat bovine Led by the DR. SCHOLL’S Sales of over-the-counter (OTC) Schering-Plough maintained respiratory disease, a serious brand, Schering-Plough’s products declined 4 percent in its No. 1 position in the U.S. condition that can have a sales of foot care products in 2000 to $202 million, primarily sun care category in 2000. significant economic impact 2000 grew 5 percent to due to the December 1999 on cattle producers. In 2000, Sales of sun care products $348 million. The Company divestiture of the PAAS product NUFLOR sales increased increased 8 percent to strengthened its position as line of decorating kits. 18 percent to $93 million. In $199 million in 2000, the U.S. market leader with March 2000, a subcutaneous The AFRIN brand maintained its driven by strong sales of the new product offerings and claim for NUFLOR was approved leadership position in the nasal BAIN DE SOLEIL line acquired technological innovations. in the European Union; market- spray category, supported by in 1999 from Pfizer Inc. ing for that indication began Foot care sales were driven the launch of three “No Drip” in the second half of the year. Also contributing to sales by the introduction of several sprays – AFRIN No Drip Severe were four new COPPERTONE KIDS new products, including Congestion Nasal Spray, AFRIN OTOMAX (gentamicin, WACKY FOAM products and a DR. SCHOLL’S ADVANTAGE Sport No Drip Sinus Nasal Spray and betamethasone and line of WATER BABIES sprays, Insoles, designed to help AFRIN No Drip Extra Moisturizing clotrimazole), a three-way which was the No. 1-selling athletes improve performance, Nasal Spray. treatment for acute and new sun care product in 2000. and DR. SCHOLL’S ADVANTAGE chronic ear infections in dogs, CORICIDIN HBP continued to Work Insoles, clinically proven was launched in early 2000 outperform sales growth in the to reduce lower back pain. in major European markets, cough/cold category, benefiting Other innovative DR. SCHOLL’S including Germany, Spain from its targeted positioning products launched in 2000 and Italy. for consumers with high include MAGNA-ENERGY Insoles. blood pressure. The 2000 Also contributing to 2000 LOTRIMIN AF and TINACTIN introduction of CORICIDIN results were other established antifungal products maintained Maximum Strength Flu helped lines of animal health products. their No. 1 and No. 2 positions, the brand achieve significant Sales increased for swine respectively, in unit sales sales growth. biologicals, reflecting the during the year, supported by Company’s leading position product introductions and a in that market and its ability to strong marketing campaign. offer the only effective product against a strain of swine flu prevalent in the United States in 2000. S C H E R I N G - P L O U G H C O R P O R AT I O N 1 3
  16. 16. major therapeutic categories S C H E R I N G – P L O U G H C O R P O R AT I O N 2 0 0 0 S A L E S dollars in millions $8,346 $720 $348 $202 $199 PHARMACEUTICALS CONSOLIDATED $9,815 ANIMAL HEALTH FOOT CARE OTC SUN CARE P H A R M A C E U T I C A L T H E R A P E U T I C C AT E G O R I E S 2 0 0 0 S A L E S dollars in millions $4,189 $2,015 $746 $680 $716 ALLERGY AND RESPIRATORY TOTAL PHARMACEUTICALS $8,346 ANTI-INFECTIVE AND ANTICANCER CARDIOVASCULARS DERMATOLOGICALS OTHER PHARMACEUTICALS NET SALES RESEARCH AND DEVELOPMENT C A P I TA L E X P E N D I T U R E S dollars in millions dollars in millions dollars in millions 9,815 763 9,116 1,333 8,027 1,191 543 6,745 1,007 5,627 847 405 389 723 336 96 97 98 00 96 97 98 00 96 97 98 00 99 99 99 1 4 S C H E R I N G - P L O U G H C O R P O R AT I O N
  17. 17. financials 16 management’s discussion and analysis of operations and financial condition 21 statements of consolidated income 21 statements of consolidated cash flows 22 consolidated balance sheets 23 statements of consolidated shareholders’ equity 24 notes to consolidated financial statements 34 report by management 34 independent auditors’ report 35 quarterly data 36 six-year selected financial & statistical data S C H E R I N G - P L O U G H C O R P O R AT I O N 1 5

×