Exhibit 99.1
STANDARD
& POOR'S RATINGSDIRECT
RESEARCH:
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SCHERING-PLOUGH CORP. RATINGS PLACED ON CREDITWATCH NEGATIVE
PUBLICATION DATE:
10-Nov-2003
CREDIT ANALYST:
David Lugg, New York (1)212-438-7845; Michael J Kaplan, New York
(1)212-438-7842
NEW YORK (Standard & Poor's) Nov. 10, 2003--Standard & Poor's Ratings
Services today placed its 'A+' long-term and 'A-1' short-term corporate
credit ratings on Kenilworth, N.J.-based pharmaceutical company
Schering-Plough Corp. on CreditWatch with negative implications.
"The listing reflects increasing doubt that the company can restore its
business profile to one consistent with an 'A+' rating," said Standard &
Poor's credit analyst David Lugg. The past several months have witnessed a
steady downpour of disappointments and charges, highlighted by the
continued rapid erosion in its key Intron franchise. Following the loss of
patent protection on lead product Claritin, Schering-Plough had counted on
continued strong sales of its Rebetol combination of Intron and Ribavirin
for treating Hepatitis C to sustain earnings and cash flow. However, a
competing product, aggressively marketed by Hoffmann-La Roche, has taken a
substantial share of the market and Intron sales have plummeted, declining
43% in the third quarter alone.
The growth in other drugs is not, at this point, great enough to offset
these precipitous declines. In particular, promising cholesterol reducer
Zetia is only newly launched into an increasingly competitive marketplace,
with a more promising follow-on combination product still in clinical
development. Moreover, the company has increased litigation reserves
related to investigations into the company's marketing, sales, and
clinical trial practices. To preserve cash and improve profitability, the
company has taken several prudent steps, including cutting the dividend
dramatically, embarking on a cost containment program as well as reducing
headcount. Nonetheless, the company believes that turning the company
around will be "a long haul". In the face of this combination of
developments, Standard & Poor's has greater concern that the company will
be able to maintain its hallmark conservative financial profile throughout
this period of change. The possibility exists that the long-term rating
may be lowered more than one notch.
Standard & Poor's expects to review management's plans for coping with
its growing list of challenges in resolving the CreditWatch situation.
Michael Kaplan
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Managing Director, Industrial Ratings
Team Leader, Health Care
Standard & Poor's http://www.sandp.com/
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55 Water Street, 39th Floor
New York, NY 10041
Phone: 212-438-7842
Fax: 212-438-7873