Schering unlikely to target Irish jobs

THE bulk of Schering-Plough’s 2,000-strong Irish workforce is expected to escape the impact of a major consolidation by the company after net income fell by 71% to €173 million.

New CEO Fred Hassan is reorganising operations at the company, which employs 29,800 people worldwide, and plans to cut jobs to revive profits at the pharmaceutical giant. He said in a statement that he didn't want to be restricted by the company's previous forecast that it would earn 75 cents to 85 cents a share this year.

The company said it plans to consolidate its animal-health and consumer-health businesses and its research and development and manufacturing operations. However, the company will hold off on restructuring its manufacturing business until it resolves compliance issues.

The massive fall in profitability did not go down well with the investment community Friedman Billings Ramsey & Co. analyst David Moskowitz said:

"It's nothing short of a disaster the deterioration in earnings. Hassan's taking the guidance off the table is a short-term negative, but it's the right thing to do, given that he's going to be completely restructuring the company."

The company's net income fell to $173 million, or 12 cents a share, compared with $600m, or 41 cents, in the first quarter of 2002. Sales decreased 19% to $2.07 billion from$2.56bn, the Kenilworth, New Jersey, USA headquartered company said.

Sales of Claritin, once Schering-Plough's top product, are dwindling amid competition from cheaper, generic versions. In December, the company exclusive marketing rights for the drug, which contributed almost a third of worldwide revenue in 2001.

In March, the company cut profit forecasts for the third time since October. It is also facing government probes into pricing, marketing and manufacturing practices.

Schering-Plough has named Carrie Cox to run its global pharmaceutical business, as of May 15. Ms Cox was head of Pharmacia's prescription drug business, until Pharmacia was bought for $58bn last month by world number one drugmaker Pfizer Inc.

Mr Hassan said: "These steps set us on the path to stabilise, repair and then turn around ScheringPlough."

He has dismissed speculation that he might seek a merger with Merck as a way out of the company's problems.