Schering to cut $1 billion more

Days after top cardiologists criticized Schering-Plough Corp.’s crucial cholesterol drugs Vytorin and Zetia, sending its stock price tumbling, the drug maker said Wednesday that it would make $1 billion in cost cuts through layoffs and other reductions.

The cutbacks come on top of $500 million in reductions announced previously after the Kenilworth, N.J.-based company acquired biopharmaceutical firm Organon BioSciences late last year.

The cuts will disproportionately hit the United States and include plant consolidations, streamlining of management and trimming of overhead as well as spending on research and development, Chief Executive Fred Hassan said.

He said the plan called for reducing the workforce by 10%, with the goal of making 80% of the cuts by the end of 2010.

“No area will be exempt,” he said.

The company said the initiatives were a response to “dramatically intensifying pressures” in the pharmaceutical industry and what Hassan termed “confusion” in the U.S. cholesterol market.

Schering-Plough’s stock price plunged about 25% on Monday and then hit a new 52-week low Wednesday before ending regular trading down 89 cents, or 6%, at $13.86. The shares regained 39 cents in after-hours trading.

The drops come after a long-awaited presentation Sunday at a major heart specialists’ conference showed Vytorin was no more effective at preventing plaque buildup than the generic drug Zocor, which costs about one-third as much. Vytorin combines Schering-Plough’s Zetia and partner Merck & Co.’s Zocor.