SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
AUGUST 21, 2003
Date of Report (Date of Earliest Event Reported)
SCHERING-PLOUGH CORPORATION
(Exact name of registrant as specified in its charter)
NEW JERSEY 1-6571 22-1918501
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
2000 GALLOPING HILL ROAD
KENILWORTH, NJ 07033
(Address of principal executive offices, including Zip Code)
(908) 298-4000
(Registrant's telephone number,
including area code)
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE
Schering-Plough today issued a press release titled "Schering-Plough CEO Fred
Hassan Completes First 100 Days, '360 Degree Review;' Announces Key Measures to
Set Foundation for Turnaround."
The press release is filed as Exhibit 99.1 to this 8-K and includes information
indicating directions regarding expected 2004 earnings; aggressive cost-cutting
actions, including a voluntary early retirement program; and a reduction in the
dividend. A letter to shareholders concerning certain of these matters is filed
as Exhibit 99.2 to this 8-K. Communications to employees on certain of these
matters are filed as Exhibits 99.3, 99.4 and 99.5 to this 8-K. A series of
questions and Schering-Plough's answers, called "Frequently Asked Questions" or
"FAQs" are attached as Exhibit 99.6 to this 8-K.
This 8-K and each Exhibit are also available on Schering-Plough's Investor
Relations Web Site at ir.schering-plough.com.
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DISCLOSURE NOTICE
CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS (CAUTIONARY STATEMENTS UNDER
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995).
This 8-K, including each Exhibit, and other written and oral statements made
from time to time by Schering-Plough may contain "forward-looking statements"
within the meaning of the Securities Litigation Reform Act of 1995.
Forward-looking statements relate to expectations or forecasts of future events.
They use words such as "anticipate," "believe," "could," "estimate," "expect,"
"forecast," "project," "intend," "plan," "potential," "will," and other words
and terms of similar meaning in connection with a discussion of potential future
events, circumstances or future operating or financial performance. You can also
identify forward-looking statements by the fact that they do not relate strictly
to historical or current facts.
In particular, forward-looking statements include statements relating to future
actions, prospective products, the status of product approvals, future
performance or results of current and anticipated products, sales efforts,
development programs, expenses and our programs to reduce expenses, the number
of employees accepting Schering-Plough's planned voluntary early retirement
program and the cost of and savings from that program, the outcome of
contingencies such as litigation and investigations, growth strategy and
financial results.
Any or all of our forward-looking statements here or in other publications may
turn out to be wrong. Our actual results may vary materially, and there are no
guarantees about the performance of Schering-Plough stock. Schering-Plough does
not assume the obligation to update any forward-looking statement.
You should carefully consider any forward-looking statement and should
understand that many factors could cause actual results to differ from
Schering-Plough's forward-looking statements. These factors include inaccurate
assumptions and a broad variety of other risks and uncertainties, including some
that are known and some that are not. Although it is not possible to predict or
identify all such factors, they may include the following:
o A significant portion of net sales are made to major pharmaceutical and
health care products distributors and major retail chains in the United
States. Consequently, net sales and quarterly growth comparisons may be
affected by fluctuations in the buying patterns of major distributors,
retail chains and other trade buyers. These fluctuations may result from
seasonality, pricing, wholesaler buying decisions or other factors.
o Competitive factors, including technological advances attained by
competitors, patents granted to competitors, new products of competitors
coming to the market, new indications for competitive products or generic
prescription or OTC competition as Schering-Plough's products mature and
patents expire on products.
o Increased pricing pressure both in the United States and abroad from
managed care organizations, institutions and government agencies and
programs. In the United States, among other developments, consolidation
among customers may increase pricing pressures and may result in various
customers having greater influence over prescription decisions through
formulary decisions and other policies.
o Government laws and regulations (and changes in laws and regulations)
affecting domestic and international operations and the enforcement thereof
including, among other laws and regulations, those resulting from
healthcare reform initiatives and Medicare drug benefit and drug
importation legislation in the United States at the state and federal level
and in other countries, as well as laws and regulations relating to trade,
antitrust, monetary and fiscal policies, taxes, price controls and possible
nationalization.
o Patent positions can be highly uncertain and patent disputes are not
unusual. An adverse result in a patent dispute can preclude
commercialization of products or negatively impact sales of existing
products or result in injunctive relief and payment of financial remedies.
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o Uncertainties of the FDA approval process and the regulatory approval
processes of non-U.S. countries, including, without limitation, delays in
approval of new products.
o Failure to meet Good Manufacturing Practices established by the FDA and
other governmental authorities can result in delays in the approval of
products, release of products, seizure or recall of products, suspension or
revocation of the authority necessary for the production and sale of
products, fines and other civil or criminal sanctions. The resolution of
manufacturing issues with the FDA discussed in this report are subject to
substantial risks and uncertainties. These risks and uncertainties,
including the timing, scope and duration of a resolution of the
manufacturing issues, will depend on the ability of Schering-Plough to
assure the FDA of the quality and reliability of its manufacturing systems
and controls, and the extent of remedial and prospective obligations
undertaken by Schering-Plough.
o Difficulties in product development. Pharmaceutical product development is
highly uncertain. Products that appear promising in development may fail to
reach market for numerous reasons. They may be found to be ineffective or
to have harmful side effects in clinical or pre-clinical testing, they may
fail to receive the necessary regulatory approvals, they may turn out not
to be economically feasible because of manufacturing costs or other factors
or they may be precluded from commercialization by the proprietary rights
of others.
o Efficacy or safety concerns with respect to marketed products, whether or
not scientifically justified, leading to recalls, withdrawals or declining
sales.
o Major products such as CLARITIN, CLARINEX, INTRON A, PEG-INTRON, REBETOL
Capsules and NASONEX accounted for a material portion of Schering-Plough's
2002 revenues. If any major product were to become subject to a problem
such as loss of patent protection, OTC availability (as indicated above for
CLARITIN and its current and potential OTC competition), previously unknown
side effects; if a new, more effective treatment should be introduced; or
if the product is discontinued for any reason, the impact on revenues could
be significant. Further such information about important new products such
as ZETIA or other important products in our pipeline may impact future
revenues.
o Legal factors, including product liability claims and other litigation,
government investigations, patent disputes with competitors and
environmental concerns, any of which could preclude commercialization of
products or negatively affect the profitability of existing products.
o Economic factors over which Schering-Plough has no control, including
changes in inflation, interest rates and foreign currency exchange rates.
o Instability, disruption or destruction in a geographic region important to
us - due to the location of our manufacturing facilities, distribution
facilities or customers - regardless of cause, including war, terrorism,
riot, civil insurrection or social unrest; and natural or man-made
disasters, including famine, flood, fire, earthquake and storm.
o Changes in tax laws including changes related to taxation of foreign
earnings.
o Changes in accounting standards promulgated by the American Institute of
Certified Public Accountants, the Financial Accounting Standards Board or
the Securities and Exchange Commission that would require a significant
change to Schering-Plough's accounting practices.
For further details and a discussion of these and other risks and uncertainties,
see Schering-Plough's Securities and Exchange Commission (SEC) filings,
including Schering-Plough's 2003 Second Quarter 10-Q filed with the Commission
on July 31, 2003 and future SEC filings.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits. The following exhibits are filed with this 8-K:
99.1 Press Release titled "Schering-Plough CEO Fred Hassan Completes First 100
Days, '360 Degree Review;' Announces Key Measures to Set Foundation for
Turnaround" issued August 21, 2003
99.2 Letter to Shareholders dated August 21, 2003
99.3 Message to Employees from Fred Hassan, Chairman of the Board and CEO, dated
August 21, 2003
99.4 Memo to Employees from Executive Management Team regarding Value
Enhancement Initiative dated August 21, 2003
99.5 Letter to Employees from C. Ron Cheeley, Senior Vice President of Global
Human Resources, regarding Voluntary Early Retirement Program dated August 21,
2003
99.6 Frequently Asked Questions and Answers, FAQs, dated August 21, 2003
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Schering-Plough Corporation
By: /s/ THOMAS H. KELLY
-----------------------------
Thomas H. Kelly
Vice President and Controller
Date: August 21, 2003
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Exhibit Index
The following exhibits are filed with this 8-K:
99.1 Press Release titled "Schering-Plough CEO Fred Hassan Completes First 100
Days, '360 Degree Review;' Announces Key Measures to Set Foundation for
Turnaround" issued August 21, 2003
99.2 Letter to Shareholders dated August 21, 2003
99.3 Message to Employees from Fred Hassan, Chairman of the Board and CEO, dated
August 21, 2003
99.4 Memo to Employees from Executive Management Team regarding Value
Enhancement Initiative dated August 21, 2003
99.5 Letter to Employees from C. Ron Cheeley, Senior Vice President of Global
Human Resources, regarding Voluntary Early Retirement Program dated August 21,
2003
99.6 Frequently Asked Questions and Answers, FAQs, dated August 21, 2003
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