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Schering raised its outlook on Tuesday on strong growth of its key drugs, boding well for Bayer, the German drugs and chemical group, which this month took over its smaller rival for €17bn after a prolonged bid battle to propel itself back into the pharmaceuticals big league.
Schering now expects organic net sales growth for the year at a high single-digit percentage rate, compared with an earlier forecast of mid- to high-single-digit percentage growth. Global pharmaceuticals sales are growing at about 6 per cent.
Schering also raised the forecast for its operating margin, excluding exceptional costs, from 18 per cent to 18.5-19 per cent.
In the first half of the year, operating profit, excluding one-time costs, rose 20 per cent to €559m on sales that increased by 11 per cent to €2.8bn. Second quarter sales rose by 6 per cent.
However, the statutory results were affected by the exceptional costs of €125m for the takeover. The costs were mostly related to Schering’s defense against a hostile bid from German rival Merck KGaA. Bayer won the battle after raising its bid and now holds 92 per cent of Schering’s stock.
The costs meant that first-half net profit fell 6 per cent to €301m.
Schering’s top drugs grew at higher than expected rates. Its top drug, Betaseron to treat multiple sclerosis, grew by 17 per cent to €481m, while Yasmin, its market leading oral contraceptive, grew by 33 per cent to €351m. This drove a 17 per cent increase in gynecology net sales, which comprised 40 per cent of total sales.
Sales in diagnostic imaging - a quarter of total sales - rose by 6 per cent after adjusting for a disposal and currency effects. Sales of cancer drugs rose by 14 percent.
Hubertus Erlen, chairman, said: “Our competitive strength in specialised markets represents a solid foundation for the future success of Bayer Schering Pharma.”
In Germany, its largest market in Europe, net sales increased organically by 3 per cent in the half. In the US, they grew by 14 per cent. They fell 2 per cent in Japan, a result of government mandated price cuts.
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