Schering-Plough Reports Financial Results for 2008 Fourth Quarter, Full Year

KENILWORTH, N.J., February 03, 2009 /PRNewswire-FirstCall/ -- Schering-Plough Corporation today reported financial results for the 2008 fourth quarter and full year.

"Schering-Plough delivered a very strong performance in 2008 - in the face of intensifying pressures on our industry," said Fred Hassan, chairman and CEO. "We have delivered these results by executing on our core strategies while responding quickly and decisively to the fast-changing environment, including taking effective actions to reduce costs and improve productivity.

"Despite the challenges facing our industry today," continued Hassan, "we remain confident about one thing: that innovator companies - those that can discover and deliver valuable new medicines - should continue to do well. We have shown that we are one of those companies."

For the 2008 fourth quarter, Schering-Plough reported net income available to common shareholders of $442 million or 27 cents per common share on a GAAP basis. Earnings per common share for the 2008 fourth quarter would have been 39 cents on net income of $633 million on a reconciled basis, which excludes purchase accounting adjustments, special and acquisition-related items, and $22 million of income from the termination of a respiratory joint venture with Merck & Co., Inc. (Merck). For the 2007 fourth quarter, Schering-Plough reported a net loss available to common shareholders of $3.4 billion or $2.08 per common share on a GAAP basis and earnings of 27 cents per common share on a reconciled basis.

GAAP net sales for the 2008 fourth quarter totaled $4.3 billion, up 17 percent as compared to the fourth quarter of 2007, reflecting an unfavorable impact from foreign exchange of 6 percent. Sales for the quarter benefited from the inclusion of net sales of products from Organon BioSciences N.V. (OBS), which was acquired on Nov. 19, 2007. Net sales of the global cholesterol joint venture, which include VYTORIN and ZETIA, totaled $1.1 billion in the 2008 fourth quarter and were down 26 percent, primarily due to lower sales in the U.S. Schering-Plough does not record sales of its cholesterol joint venture with Merck as the venture is accounted for under the equity method. Including an adjustment of an assumed 50 percent of the global cholesterol joint venture net sales, Schering-Plough's adjusted net sales for the 2008 fourth quarter would have been $4.9 billion.

Said Hassan on the company's research pipeline: "We are rich in potential first-in-class and best-in-class compounds - and excited that the strength of our innovation is coming through. With 12 new entities in Phase III or pre-registration, we believe ours is an industry-leading late-stage pipeline."

In addition, many of Schering-Plough's key prescription products are protected by long periods of expected exclusivity, with most protected well into the next decade. "At a time when many others in the industry are facing pipeline droughts and patent cliffs, we believe we're in the sweet spot on product flow and expected exclusivity. This gives us a special edge."

The company has made major progress in building strength and diversity - across its businesses, geographic presence and product portfolio. Important assets include its leading Animal Health business and innovative Consumer Health Care unit. A key action was the acquisition of Organon BioSciences in November 2007 and its successful integration. The OBS acquisition added new treatment categories (women's health and central nervous system), expanded the product pipeline with promising late-stage compounds, and made Schering-Plough the world's largest animal health company. In the first half of 2008, the company had already achieved its full-year OBS accretion target.

Several other important achievements were made over the past five full years (2004-08) since the current management team joined Schering-Plough:

Thomas P. Koestler, Ph.D., executive vice president and president of Schering-Plough Research Institute, said, "Our scientists have made R&D innovation a hallmark of our pipeline. The productivity of our labs is evidenced by our rich late-stage pipeline, by the six projects designated 'fast track' by the FDA, and by our 75 new molecular entities in all phases of development. We will continue to pursue novel approaches so that patients and physicians can gain access to new therapies to treat and modify the pathways of serious diseases."

Schering-Plough at a November 2008 R&D Update meeting highlighted its rich and innovative pipeline, with 46 new entities in clinical trials or under regulatory review, including:

Responding decisively to business conditions, the company in April 2008 launched its Productivity Transformation Program (PTP), which is expected to realize savings of $1.5 billion by the end of 2012, with $1.25 billion in savings targeted to be accomplished by 2010. The $1.5 billion target includes the previously announced integration synergy targets from the OBS acquisition. The company is making steady progress toward achieving these savings targets and increasing operational efficiencies.

For the 2008 fourth quarter, Schering-Plough reported net income available to common shareholders of $442 million or 27 cents per common share on a GAAP basis. Earnings per common share for the 2008 fourth quarter would have been 39 cents on net income of $633 million on a reconciled basis, which excludes purchase accounting adjustments, special and acquisition-related items and $22 million of income from the termination of a respiratory joint venture with Merck. For the 2007 fourth quarter, Schering-Plough reported a net loss available to common shareholders of $3.4 billion or $2.08 per common share on a GAAP basis and earnings of 27 cents per common share on a reconciled basis, which excludes acquisition-related items and an upfront R&D payment.

GAAP net sales for the 2008 fourth quarter increased 17 percent to $4.3 billion, including $1.3 billion in sales of products from the OBS acquisition and an unfavorable impact from foreign exchange of 6 percent.

Global cholesterol joint venture net sales, which include VYTORIN and ZETIA, totaled $1.1 billion, a decrease of 26 percent when compared to the fourth quarter of 2007. Schering-Plough does not record sales of its cholesterol joint venture with Merck as the venture is accounted for under the equity method. Including an adjustment of an assumed 50 percent of the global cholesterol joint venture net sales, Schering-Plough's adjusted net sales for the 2008 fourth quarter would have been $4.9 billion.

Overall, Schering-Plough shares in approximately 50 percent of the profits of the joint venture with Merck, although there are different profit-sharing arrangements for the cholesterol products in countries around the world. Schering-Plough records its share of the income from operations in "Equity income," which totaled $426 million in the 2008 fourth quarter, as compared to $566 million in the fourth quarter of 2007. Included in fourth quarter 2008 GAAP equity income is $22 million of income related to the termination of the respiratory joint venture. Schering-Plough noted that it incurs substantial costs such as selling, general and administrative costs that are not reflected in "Equity income" and are borne by its overall cost structure. There is a separate co-marketing agreement with Bayer for ZETIA in Japan, where the product was launched in June 2007.

Sales of Prescription Pharmaceuticals for the 2008 fourth quarter increased 17 percent to total $3.5 billion, including an unfavorable impact from foreign exchange of 6 percent. Included in the fourth quarter of 2008 are $823 million of net sales of products related to the OBS human health business compared to $409 million in the prior year period. Schering-Plough acquired OBS on Nov. 19, 2007.

Sales of REMICADE increased 8 percent to $491 million in the fourth quarter of 2008 due to continued market growth and expanded penetration in certain indications partially offset by an unfavorable impact from foreign exchange. REMICADE is a treatment for inflammatory diseases that Schering-Plough markets in countries outside the U.S. (except in Japan and certain other Asian markets) for rheumatoid arthritis, early rheumatoid arthritis, ankylosing spondylitis, psoriatic arthritis, plaque psoriasis, Crohn's disease, pediatric Crohn's disease and ulcerative colitis.

Sales of TEMODAR, a treatment for certain types of brain tumors, increased 4 percent to $242 million, with higher sales in most markets partially offset by the unfavorable impact of foreign exchange.

Global sales of NASONEX, an inhaled nasal corticosteroid for allergies, rose 3 percent to $280 million versus the 2007 period, due to increased sales in the U.S. and international markets.

Sales of PEGINTRON for hepatitis C decreased 6 percent to $225 million in the 2008 fourth quarter, primarily due to lower sales in the U.S.

In women's health care, sales for FOLLISTIM/PUREGON, a fertility treatment, for the fourth quarter of 2008 were $127 million. Sales of NUVARING, a contraceptive product, in the 2008 fourth quarter grew to $110 million. These women's health products were obtained as part of the OBS acquisition.

Global sales of CLARINEX, a nonsedating antihistamine, in the fourth quarter of 2008 were $160 million, a decrease of 8 percent as compared to the fourth quarter of 2007, primarily due to lower sales in the U.S.

International sales of prescription CLARITIN were $99 million in the fourth quarter of 2008, a 6 percent increase compared to sales of $93 million in the fourth quarter of 2007 due primarily to higher sales in Japan.

Animal Health sales totaled $674 million in the 2008 fourth quarter, a 33 percent increase (including an unfavorable impact from foreign exchange of 9 percent) as compared to $507 million in the fourth quarter of 2007. Animal Health sales included sales related to products from the acquired OBS animal health business of $436 million in the fourth quarter of 2008 and $217 million in the fourth quarter of 2007. Animal Health sales in the 2008 fourth quarter were unfavorably impacted by foreign exchange, the divestment of certain products related to the acquisition of OBS and by factors resulting from current credit conditions, including inventory reductions initiated by customers.

Consumer Health Care sales were $219 million in the 2008 fourth quarter, down 14 percent versus the 2007 period. The decrease was mainly due to lower sales of OTC CLARITIN, which were unfavorably impacted by retail inventory reductions, private-label competition and the timing of shipments. Partially offsetting the sales decline were higher sales of OTC MIRALAX, launched in February 2007, which increased to $30 million.

Schering-Plough does not record sales of its cholesterol 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 totaled 64.9 percent for the 2008 fourth quarter as compared to 57.9 percent in the 2007 period. Excluding purchase accounting adjustments, the gross margin percentage increased to 68.9 percent for the fourth quarter of 2008 as compared to 66.7 percent for the fourth quarter of 2007, primarily due to a favorable impact from foreign exchange.

SG&A expenses were $1.6 billion in the fourth quarter of 2008, essentially flat as compared to the fourth quarter of 2007.

Research and development spending for the 2008 fourth quarter was $850 million consistent with the fourth quarter of 2007. Included in R&D spending in the fourth quarter of 2007 was $21 million related to an upfront payment made for a licensing transaction. R&D expenditures reflect spending for clinical trials and related activities, and investments to build greater depth and capacity to support Schering-Plough's expanding global R&D pipeline.

Schering-Plough's full-year 2008 financial results include results of operations for OBS. For the full-year 2008, Schering-Plough reported net income available to common shareholders of $1.6 billion or $1.01 per common share on a GAAP basis. Earnings per common share on a reconciled basis grew 28 percent to $1.75, excluding purchase accounting adjustments, special and acquisition-related items, a $160 million pre-tax gain from the divestitures of certain animal health products, $105 million of income from the termination of a respiratory joint venture with Merck, and other specified items. For the full-year 2007, Schering-Plough reported a net loss of $1.6 billion or $1.04 per common share on a GAAP basis, which included $3.8 billion of acquired in-process research and development charges related to the purchase accounting of the OBS acquisition. Excluding purchase accounting adjustments, special and acquisition-related items and other specified items, Schering-Plough's full-year 2007 earnings per common share were $1.37.

Schering-Plough reported full-year 2008 GAAP net sales of $18.5 billion, a 46 percent increase, compared to $12.7 billion in 2007, including a favorable impact of 3 percent from foreign exchange. The increase was primarily due to the acquisition of OBS on Nov. 19, 2007. Schering-Plough's adjusted net sales for 2008 totaled $20.8 billion, an increase of $5.6 billion as compared to $15.2 billion on an adjusted basis in 2007. The company noted that for 2009 U.S. sales of VYTORIN and ZETIA are expected to be lower than in 2008 while international sales, excluding the impact of foreign exchange, should continue to grow.

On a GAAP basis, Schering-Plough's gross margin was 60.5 percent in 2008 as compared to 65.3 percent in 2007. Excluding purchase accounting adjustments, the gross margin percentage increased to 68.3 percent in 2008 as compared to 67.9 percent in 2007.

For the 2008 full year, selling, general and administrative expenses were $6.8 billion.

Research and development spending for 2008 totaled $3.5 billion.

Equity income in 2008 totaled $1.9 billion, a decrease of 9 percent compared to 2007.

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

Schering-Plough will conduct a conference call today at 8 a.m. (EST) to review the 2008 fourth quarter and full-year results. To listen live to the call, dial 1-877-565-9664 or 1-706-634-5003 and enter conference ID #78444197. A replay of the call will be available beginning later on Feb. 3 through 5 p.m. on Feb. 10. To listen to the replay, dial 1-800-642-1687 or 1-706-645-9291 and enter the conference ID #78444197. A live audio webcast of the conference call also will be available by going to the Investor Relations section of the Schering-Plough corporate Web site, www.schering-plough.com, and clicking on the "Presentations/Webcasts" link. A replay of the webcast will be available starting on Feb. 3 through 5 p.m. on Feb. 24.

DISCLOSURE NOTICE: The information in this press release, the comments of Schering-Plough officers during the earnings teleconference/webcast on Feb. 3, 2009, beginning at 8 a.m. (EST), and other written reports and oral statements made from time to time by the company may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not relate strictly to historical or current facts and are based on current expectations or forecasts of future events. You can identify these forward-looking statements by their use of words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "project," "intend," "plan," "potential," "will," and other similar words and terms. In particular, forward-looking statements include statements relating to the company's plans; its strategies; its progress under the Action Agenda and anticipated timing regarding future performance of the Action Agenda; business prospects; anticipated growth; timing and level of savings achieved from the Productivity Transformation Program, including the ongoing integration of OBS; prospective products or product approvals; trends in performance; anticipated timing of clinical trials and its impact on R&D spending; anticipated exclusivity periods; actions to enhance clinical, R&D, manufacturing and post-marketing systems; and the potential of products and trending in therapeutic markets, including the cholesterol market. Actual results may vary materially from the company's forward-looking statements, and there are no guarantees about the performance of Schering-Plough stock or Schering-Plough's business. Schering-Plough does not assume the obligation to update any forward-looking statement. A number of risks and uncertainties could cause results to differ materially from forward-looking statements, including, among other uncertainties, market viability of the company's (and the cholesterol joint venture's) marketed and pipeline products; market forces; economic factors such as interest rate and exchange rate fluctuations; the outcome of contingencies such as litigation and investigations including litigation and investigations relating to the ENHANCE clinical trial; product availability; patent and other intellectual property protection; current and future branded, generic or over-the-counter competition; the regulatory process (including product approvals, labeling and post-marketing actions); scientific developments relating to marketed products or pipeline projects; and media and societal reaction to such developments. For further details of these and other risks and uncertainties that may impact forward-looking statements, see Schering-Plough's Securities and Exchange Commission filings, including Part II, Item 1A. "Risk Factors" in the third quarter 2008 10-Q, filed Oct. 29, 2008.

Schering-Plough is an innovation-driven, science-centered global health care company. Through its own biopharmaceutical research and collaborations with partners, Schering-Plough creates therapies that help save and improve lives around the world. The company applies its research-and-development platform to human prescription, animal health and consumer health care products. Schering-Plough's vision is to "Earn Trust, Every Day" with the doctors, patients, customers and other stakeholders served by its colleagues around the world.


    SCHERING-PLOUGH CORPORATION
    U.S. GAAP report for the Fourth quarter and Twelve months ended December 31
    (unaudited):
    (Amounts in millions, except per share figures)

                                   Fourth Quarter      Twelve Months
                                   2008      2007     2008       2007
                                   ----      ----     ----       ----
    Net sales 1/                 $4,348    $3,724  $18,502    $12,690
    Cost of sales 2/              1,525     1,566    7,307      4,405
    Selling, general and
     administrative               1,615     1,634    6,823      5,468
    Research and development 3/     850       855    3,529      2,926
    Acquired in-process research
     and development 4/               -     3,754        -      3,754
    Other expense/(income), net     146      (231)     335       (683)
    Special and acquisition-
     related charges  5/            111        52      329         84
    Equity income 6/               (426)     (566)  (1,870)    (2,049)
                                  -----     -----  -------    -------

    Income/(loss) before income
     taxes                          527    (3,340)   2,049     (1,215)
    Income tax expense/(benefit)     47       (14)     254        258
                                     --      ----      ---        ---
    Net income/(loss)              $480   $(3,326)  $1,795    $(1,473)
                                   ====  ========   ======   ========

    Preferred stock dividends        38        38      150        118
                                     --        --      ---        ---
    Net income/(loss) available
     to common shareholders        $442   $(3,364)  $1,645    $(1,591)
                                   ====  ========   ======  =========

    Diluted earnings/(loss) per
     common share                 $0.27    $(2.08)   $1.01     $(1.04)
                                  =====   =======    =====    =======

                                  1,634     1,621    1,635      1,536

    The company incurs substantial costs related to the cholesterol joint
    venture, such as selling, general and administrative costs, that are not
    reflected in the "Equity income" and are borne by the overall cost
    structure of Schering-Plough.

    1/  Net sales for the three and twelve months ended December 31, 2008,
        include sales of Organon BioSciences (OBS) products of $1.3 billion
        and $5.4 billion, respectively.  Net sales for the three and twelve
        months ended December 31, 2007 include sales of OBS products of $626
        million subsequent to closing date of the acquisition on November 19,
        2007.

    2/  Cost of sales for the three and twelve months ended December 31, 2008,
        include purchase accounting adjustments of $174 million and $1.4
        billion, respectively, related to the acquisition of OBS.  Cost of
        sales for the three and twelve months ended December 31, 2007,
        includes purchase accounting adjustments of $326 million related to
        the acquisition of OBS.

    3/  Research and development for the three and twelve months ended
        December 31, 2007 include $21 million and $197 million, respectively,
        related to upfront R&D payments.

    4/  Acquired in-process research and development for the twelve months
        ended December 31, 2007 represents a charge of $3.8 billion in
        connection with the acquisition of OBS.

    5/  Special and acquisition-related charges relate to the Productivity
        Transformation Program (PTP), which also incorporates the ongoing
        integration of OBS. For the three and twelve months ended December 31,
        2008, these charges were $111 million ($97 million for severance costs
        and $14 million for integration-related costs) and $329 million ($275
        million for severance costs and $54 million for integration-related
        costs), respectively. Special and acquisition-related charges for the
        three and twelve months ended December 31, 2007 were $52 million and
        $84 million, respectively.

    6/  Equity income for the three and twelve months ended December 31, 2008
        include $22 million and $105 million, respectively, of income related
        to the termination of a respiratory joint venture with Merck.
    SCHERING-PLOUGH CORPORATION

    Reconciliation from Reported Net Income Available to Common Shareholders
    and Reported Diluted Earnings Per Common Share to As Reconciled Amounts
    for Net Income Available to Common Shareholders and Diluted Earnings per
    Common Share
    (Amounts in Millions, except per share figures)

    To supplement its consolidated financial statements presented in
    accordance with accounting principles generally accepted in the United
    States of America (U.S. GAAP), Schering-Plough is providing the
    supplemental financial information below and on the following pages to
    reflect "As Reconciled" amounts related to Net income available to common
    shareholders and Diluted earnings per common share.  "As Reconciled"
    amounts exclude the effects of purchase accounting adjustments, special
    and acquisition-related items and other specified items.

    "As Reconciled" amounts related to Net income/(loss) available to common
    shareholders and Diluted earnings/(loss) per common share are non-U.S.
    GAAP measures used by management in evaluating the performance of
    Schering-Plough's overall business.  The effects of purchase accounting
    adjustments, special and acquisition-related items and other specified
    items have been excluded from Net income/(loss) available to common
    shareholders and Diluted earnings/(loss) per common share as management
    of Schering-Plough does not consider these items to be indicative of
    continuing operating results.  Schering-Plough believes that these
    "As Reconciled" performance measures contribute to a more complete
    understanding by investors of the overall results of the company and
    enhances investor understanding of items that impact the comparability of
    results between fiscal periods.  Net income/(loss) available to common
    shareholders and Diluted earnings/(loss) per common share, as reported,
    are required to be presented under U.S. GAAP.



                              Three months ended December 31, 2008
                                           (unaudited)

                                                Special
                                                  and
                                  Purchase    Acquisition-  Other       As
                         As      Accounting     Related   Specified Reconciled
                      Reported  Adjustments      Items      Items       (1)
                      --------  -----------   ----------- --------- ----------
    Net sales          $4,348        $-           $-       $-        $4,348
    Cost of sales       1,525      (174)           -        -         1,351
    Selling,
     general and
     administrative     1,615        (1)           -        -         1,614
    Research and
     development          850        (2)           -        -           848
    Other expense/
     (income), net        146         -            -        -           146
    Special and
     acquisition-
     related charges      111         -         (111)       -             -

    Equity income        (426)        -            -       22          (404)
                        -----         -            -       --         -----

    Income before
     income taxes         527       177          111      (22)          793
    Income tax
    expense/(benefit)      47       (44)         (31)       -           122
                           --      ----         ----        -           ---

    Net income           $480      $133          $80     $(22)         $671
                         ----      ----          ---    -----          ----

    Preferred stock
     dividends             38         -            -        -            38
                           --         -            -        -            --
    Net income
     available to
     common
     shareholders        $442      $133          $80     $(22)         $633
                         ====      ====          ===    =====          ====


    Diluted
     earnings per
     common share       $0.27                                         $0.39
                        =====                                         =====

    Average shares
     outstanding-
     diluted            1,634                                         1,634

    (1)  "As Reconciled" to exclude purchase accounting adjustments, special
         and acquisition-related items and other specified items.
    SCHERING-PLOUGH CORPORATION

    Reconciliation from Reported Net (Loss)/Income Available to Common
    Shareholders and Reported Diluted (Loss)/Earnings Per Common Share to As
    Reconciled Amounts for Net (Loss)/Income Available to Common Shareholders
    and Diluted (Loss)/Earnings per Common Share
    (Amounts in Millions, except per share figures)



                              Three months ended December 31, 2007
                                           (unaudited)

                                               Special
                                                 and
                                 Purchase    Acquisition-  Other       As
                        As      Accounting      Related   Specified Reconciled
                     Reported  Adjustments      Items      Items       (1)
                     --------  -----------   -----------  --------- ----------

    Net sales           $3,724        $-           $-       $-       $3,724
    Cost of sales        1,566      (326)           -        -        1,240
    Selling, general
     and
     administrative       1,634         -            -        -        1,634
    Research and
     development           855         -            -      (21)         834
    Acquired
     in-process
     research and
     development         3,754    (3,754)                                 -
    Other expense/
     (income), net        (231)        -          255        -           24
    Special and
     acquisition-
     related charges        52         -          (52)       -            -
    Equity income         (566)        -            -        -         (566)
                         -----         -            -        -        -----

    (Loss)/income
     before income
     taxes              (3,340)    4,080         (203)      21          558
    Income tax
     (benefit)/
     expense               (14)      (89)          (2)      (1)          78
                          ----      ----          ---      ---           --

    Net (loss)/
     income            $(3,326)   $3,991        $(205)     $20         $480
                      --------    ------       ------      ---         ----

    Preferred stock
     dividends              38         -            -        -           38
                            --         -            -        -           --
    Net (loss)/
     income
     available to
     common
     shareholders      $(3,364)   $3,991        $(205)     $20         $442
                      ========    ======       ======      ===         ====

    Diluted (loss)/
     earnings per
     common share       $(2.08)                                       $0.27
                       =======                                        =====

    Average shares
     outstanding-
     diluted             1,621                                        1,648


    (1)  "As Reconciled" to exclude purchase accounting adjustments, special
         and acquisition-related items and other specified items.
    SCHERING-PLOUGH CORPORATION

    Reconciliation from Reported Net Income Available to Common Shareholders
    and Reported Diluted Earnings Per Common Share to As Reconciled Amounts
    for Net Income Available to Common Shareholders and Diluted Earnings per
    Common Share
    (Amounts in Millions, except per share figures)

                              Twelve months ended December 31, 2008
                                          (unaudited)

                                               Special
                                                 and
                                Purchase    Acquisition-   Other       As
                        As     Accounting      Related    Specified Reconciled
                     Reported  Adjustments      Items       Items     (1)
                     --------  -----------  -----------   --------- ----------

    Net sales         $18,502         $-         $-        $-      $18,502
    Cost of sales       7,307     (1,437)         -         -        5,870
    Selling, general
     and
     administrative     6,823         (4)         -         -        6,819
    Research and
     development        3,529         (8)         -         -        3,521
    Other expense/
     (income), net        335          -          -       177          512
    Special and
     acquisition-
     related charges      329          -       (329)        -            -
    Equity income      (1,870)         -          -       105       (1,765)
                      -------          -          -       ---      -------

    Income before
     income taxes       2,049      1,449        329      (282)       3,545
    Income tax
     expense/(benefit)    254       (236)       (56)       16          530
                          ---      -----       ----        --          ---

    Net income         $1,795     $1,213       $273     $(266)      $3,015
                       ------     ------       ----    ------       ------

    Preferred stock
     dividends            150          -          -         -          150
                          ---          -          -         -          ---
    Net income
     available to
     common
     shareholders      $1,645     $1,213       $273     $(266)      $2,865
                       ======     ======       ====    ======       ======

    Diluted earnings
     per common
     share              $1.01                                        $1.75
                        =====                                        =====

    Average shares
     outstanding-
     diluted            1,635                                        1,635

    (1)  "As Reconciled" to exclude purchase accounting adjustments, special
         and acquisition-related items and other specified items.
    SCHERING-PLOUGH CORPORATION

    Reconciliation from Reported Net (Loss)/Income Available to Common
    Shareholders and Reported Diluted (Loss)/Earnings Per Common Share to As
    Reconciled Amounts for Net (Loss)/Income Available to Common Shareholders
    and Diluted (Loss)/Earnings per Common Share
    (Amounts in Millions, except per share figures)



                            Twelve months ended December 31, 2007
                                          (unaudited)

                                              Special
                                                and
                                Purchase    Acquisition-  Other       As
                      As       Accounting      Related   Specified Reconciled
                   Reported   Adjustments      Items      Items       (1)

    Net sales        $12,690            $-           $-       $-   $12,690
    Cost of sales      4,405          (326)           -        -     4,079
    Selling,
     general and
     administrative    5,468             -            -        -     5,468
    Research and
     development       2,926             -            -     (197)    2,729
    Acquired
     in-process
     research and
     development       3,754        (3,754)
    Other expense/
     (income), net      (683)            -          537        -      (146)
    Special and
     acquisition-
     related charges      84             -          (84)       -         -
    Equity income     (2,049)            -            -        -    (2,049)
                     -------             -            -        -   -------

    (Loss)/income
     before income
     taxes            (1,215)        4,080         (453)     197     2,609
    Income tax
     expense/
     (benefit)           258           (89)          (2)      (1)      350
                         ---          ----          ---      ---       ---

    Net (Loss)/
     income          $(1,473)       $3,991        $(455)    $196    $2,259
                    --------        ------       ------     ----    ------

    Preferred stock
     dividends           118             -            -        -       118
                         ---             -            -        -       ---
    Net (loss)/
     income
     available to
     common
     shareholders    $(1,591)       $3,991        $(455)    $196    $2,141
                    ========        ======       ======     ====    ======

    Diluted (loss)/
     earnings per
     common share     $(1.04)                                        $1.37
                     =======                                         =====

    Average shares
     outstanding-
     diluted           1,536                                         1,607

    (1)  "As Reconciled" to exclude purchase accounting adjustments, special
         and acquisition-related items and other specified items.
    SCHERING-PLOUGH CORPORATION

    Summary of Detailed Schedule
    (Amounts in Millions)

    "As Reconciled" amounts related to Net income/(loss) available to common
    shareholders and Diluted earnings/(loss) per common share reflect the following
    adjustments:



                                     Fourth Quarter       Twelve Months
                                       (unaudited)         (unaudited)
                                     2008       2007      2008     2007
                                     ----       ----      ----     ----
    Purchase accounting
     adjustments:
    -------------------
       Amortization of
        intangibles in
        connection with the
        acquisition of Organon
        BioSciences (a)               $120        $65      $527      $65
       Depreciation related to
        the fair value
        adjustment of fixed
        assets related to the
        acquisition of Organon
        BioSciences (b)                  8          3        33        3
       Charge related to the
        fair value adjustment
        to inventory related to
        the acquisition of
        Organon BioSciences (a)         49        258       889      258
       Acquired IPR&D related
        to the Organon
        BioSciences acquisition (c)      -      3,754         -    3,754
                                         -      -----         -    -----
    Total purchase
     accounting adjustments,
     pre-tax                           177      4,080     1,449    4,080
       Income tax benefit               44         89       236       89
                                        --         --       ---       --
    Total purchase
     accounting adjustments           $133     $3,991    $1,213   $3,991
                                      ----    -------   -------   ------

    Special and
     acquisition-related
     items:
    --------------------
       Special and
        integration-related
        activities (e)                $111        $52      $329      $84
       Acquisition-related
        gains on currency-
        related and interest-
        related items (d)                -       (255)        -     (537)
                                         -      -----         -    -----
    Total special and
     acquisition-related
     items, pre-tax                    111       (203)      329     (453)
       Income tax benefit               31          2        56        2
                                        --          -        --        -
    Total special and
     acquisition-related
     items                             $80      $(205)     $273    $(455)
                                       ---      -----      ----    -----

    Other specified items:
    ----------------------
       Gain on sale of
        previously announced
        divestiture of certain
        Animal Health products (d)      $-         $-     $(160)      $-
       Income from respiratory
        JV termination (f)             (22)         -      (105)       -
       Gain on sale of
        manufacturing plant (d)          -          -       (17)       -
       Upfront R&D payments (c)          -         21         -      197
                                         -         --         -      ---
    Total other specified
     items, pre-tax                    (22)        21      (282)     197
       Income tax
        benefit/(expense)                -          1       (16)       1
                                         -          -      ----        -
    Total other specified
     items                            $(22)       $20     $(266)    $196
                                     ------       ---    -------    ----

    Total purchase
     accounting adjustments,
     special and
     acquisition-related
     items and other
     specified items                  $191     $3,806   $1, 220   $3,732
                                      ====    =======  ========   ======

    (a)  Included in Cost of sales
    (b)  Included in Cost of sales, Selling, general and administrative
         and Research and development
    (c)  Included in Research and development
    (d)  Included in Other expense/(income), net
    (e)  Included in Special and acquisition-related charges
    (f)  Included in Equity income
    SCHERING-PLOUGH CORPORATION

    Report for the period ended December 31 (unaudited):


    GAAP Net Sales by Key Product


    (Dollars in millions)              Fourth Quarter          Full Year
                                      2008   2007    %     2008    2007    %
                                      ----   ----    -     ----    ----    -
    PRESCRIPTION PHARMACEUTICALS a/ $3,455 $2,963   17% $14,253 $10,173   40%
       REMICADE                        491    455    8%   2,118   1,648   28%
       NASONEX                         280    271    3%   1,155   1,092    6%
       TEMODAR                         242    234    4%   1,002     861   16%
       PEGINTRON                       225    239   (6%)    914     911    -
       CLARINEX / AERIUS               160    174   (8%)    790     799   (1%)
       FOLLISTIM / PUREGON c/          127     57  N/M      577      57  N/M
       NUVARING c/                     110     45  N/M      440      45  N/M
       CLARITIN RX                      99     93    6%     425     391    9%
       AVELOX                          102    115  (12%)    376     384   (2%)
       INTEGRILIN                       78     91  (14%)    314     332   (5%)
       CAELYX                           64     66   (2%)    297     257   16%
       REBETOL                          67     71   (5%)    260     277   (6%)
       ZEMURON c/                       51     25  N/M      253      25  N/M
       REMERON c/                       48     33  N/M      239      33  N/M
       INTRON A                         57     57    -      234     233    -
       SUBUTEX / SUBOXONE               52     57   (9%)    230     220    5%
       PROVENTIL / ALBUTEROL CFC        63     41   52%     190     207   (8%)
       CERAZETTE c/                     44     20  N/M      185      20  N/M
       LIVIAL c/                        40     24  N/M      183      24  N/M
       ASMANEX                          49     41   18%     180     162   11%
       ELOCON                           39     37    6%     176     156   13%
       MERCILON c/                      31     18  N/M      159      18  N/M
       IMPLANON c/                      32     15  N/M      151      15  N/M
       NOXAFIL                          38     29   33%     149      89   68%
       MARVELON c/                      33     20  N/M      147      20  N/M
       FORADIL                          27     25    8%     102     102    -
       Other Pharmaceuticals           806    610   32%   3,007   1,795   68%

    ANIMAL HEALTH b/                   674    507   33%   2,973   1,251  138%

    CONSUMER HEALTH CARE               219    254  (14%)  1,276   1,266    1%
       OTC                             130    161  (19%)    680     682    -
            OTC CLARITIN                55     94  (42%)    405     462  (12%)
            MiraLAX                     30     18   66%     115      48  N/M
            Other OTC                   45     49   (8%)    160     172   (7%)
       Foot Care                        71     74   (4%)    357     345    3%
       Sun Care                         18     19   (6%)    239     239    -
                                        --     --           ---     ---

    CONSOLIDATED GAAP NET SALES     $4,348 $3,724   17% $18,502 $12,690   46%
                                    ====== ======       ======= =======

    a/ Prescription Pharmaceuticals Net sales for the three and twelve months
       ended December 31, 2008 include net sales of $823 million and
       $3.5 billion, respectively, from the human health segment of Organon
       BioSciences (OBS).  Prescription Pharmaceuticals Net sales for the
       three and twelve months ended December 31, 2007 include $409 million
       of OBS human health segment sales subsequent to the closing date of
       the acquisition on November 19, 2007.

    b/ Animal Health Net sales for the three and twelve months ended December
       31, 2008 include net sales of $436 million and $1.9 billion,
       respectively, from the animal health segment of OBS.  Animal Health
       Net sales for the three and twelve months ended December 31, 2007
       include $217 million of OBS animal health segment sales subsequent to
       the closing date of the acquisition on November 19, 2007.

    c/ Products acquired in OBS acquisition on November 19, 2007.

    
    SCHERING-PLOUGH CORPORATION

    Reconciliation of Non-U.S. GAAP Financial Measures

    Adjusted net sales, defined as Net sales plus an assumed 50 percent of
    global cholesterol joint venture net sales.



    (Dollars in millions)           Three months ended December 31,
                                               (unaudited)
                                      2008          2007       %

    Net sales, as reported  a/      $4,348        $3,724       17%

    50 percent of cholesterol joint
     venture net sales  b/             531           722      (26%)

    Adjusted net sales b/           $4,879        $4,446       10%


    (Dollars in millions)            Twelve months ended December 31,
                                                (unaudited)
                                       2008          2007       %

    Net sales, as reported  a/      $18,502       $12,690       46%

    50 percent of cholesterol joint
     venture net sales  b/            2,250         2,559      (12%)

    Adjusted net sales b/           $20,752       $15,249       36%

    a/ Net sales for the three and twelve months ended December 31, 2008
       include sales from Organon BioSciences (OBS).  Net sales for the
       three and twelve months ended December 31, 2007 include sales from
       Organon BioSciences (OBS) subsequent to the closing date of the
       acquisition on November 19, 2007.

    b/ Total Net sales of the cholesterol joint venture for the three months
       ended December 31, 2008 and 2007 were $1.1 billion and $1.4 billion,
       respectively. Total Net sales of the cholesterol joint venture for the
       twelve months ended December 31, 2008 and 2007 were $4.5 billion and
       $5.1 billion, respectively.

    NOTE:  Adjusted net sales, defined as net sales plus an assumed 50 percent
           of global cholesterol joint venture net sales, is a non-U.S. GAAP
           measure used by management in evaluating the performance of
           Schering-Plough's overall business.  Schering-Plough believes that
           this performance measure contributes to a more complete
           understanding by investors of the overall results of the company.
           Schering-Plough provides this information to supplement the
           reader's understanding of the importance to the company of its
           share of results from the operations of the cholesterol joint
           venture.  Net sales (excluding the cholesterol joint venture net
           sales) is required to be presented under U.S. GAAP. The cholesterol
           joint venture's net sales are included as a component of income
           from operations in the calculation of Schering-Plough's "Equity
           income."  Net sales of the cholesterol joint venture do not include
           net sales of cholesterol products in non-joint venture territories.

CONTACT: Media, Steve Galpin, Jr., +1-908-298-7415, or Investors, JanetBarth or Joseph Romanelli, +1-908-298-7436, all of Schering-Plough

Web site: http://www.schering-plough.com/

Ticker Symbol: (NYSE:SGP)

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Posted: February 2009


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