FDA Approves Schering’s Clarinex
Schering-Plough Corp. has won long-awaited U.S. approval for the successor to its blockbuster allergy pill Claritin, but said it may have to pay as much as $500 million to resolve plant problems.
The drug maker, which also warned Friday that its fourth-quarter earnings probably would be about 12% below Wall Street consensus expectations, said it was in negotiations with regulators to reach a consent decree.
Such a legal agreement would aim to resolve manufacturing issues at plants in New Jersey and Puerto Rico.
As part of the deal, the company could pay a fine as high as $500 million, Schering-Plough said in a statement issued Friday.
On Friday, shares closed at $36.35, up 24 cents, on the New York Stock Exchange.
The Food and Drug Administration said it had approved Clarinex, a new version of Claritin that was delayed for months by the plant problems, but had no comment on talks with Schering-Plough.
Analysts welcomed the approval of Clarinex, which the company hopes will help keep its allergy business strong when Claritin’s patent expires in December 2002, and news that manufacturing issues could be settled soon. The manufacturing problems had hurt the company’s stock price, which is down 35% this year.
The FDA had cited the firm for a host of plant problems, such as impure drug samples and variations in amounts of ingredients in batches of drugs.
“The FDA is confident that the firm can manufacture this product properly,” FDA spokeswoman Laura Bradbard said of Clarinex.
Kenilworth, N.J.-based Schering-Plough said its fourth-quarter earnings are likely to come in about 12% below Wall Street expectations, or about 36 cents a share. That would be down from 39 cents a year earlier.
The company blamed the anticipated profit drop on the effect its manufacturing issues had on sales, changes in the timing of customer purchases and unspecified factors.
Schering said it expects to report earnings-per-share growth in the “low double-digits” in 2002.
Clarinex is billed as a slightly faster-acting version of Claritin, a $3-billion-a-year antihistamine that will face competition from generic copies when it goes off patent.
Schering-Plough’s strategy is to switch Claritin patients to Clarinex before Claritin, the company’s flagship drug, loses patent protection. Some analysts have questioned whether Clarinex is a big enough improvement to get patients to make the switch.
