In the summer of 2006, Schering-Plough made a bold -- if premature -- call.
During a two-day strategy session, the company's latest proxy statement shows, Schering-Plough declared that its crisis period from recent years had come to an end. The company reached that conclusion shortly after the close of a key trial meant to further strengthen a booming cholesterol-drug franchise that it operates with Merck.
Not until last week, nearly a year and a half later, did the results of that trial finally emerge. The study, popularly known as ENHANCE, suggested that Schering-Plough's blockbuster cholesterol-lowering drugs work no better -- and could pose greater risks -- than the far cheaper generic Zocor.
Schering-Plough's shares plummeted 20% in a matter of days as a result. The stock couldn't even manage a rebound on Friday after CEO Fred Hassan announced plans to buy $2 million worth of the hammered shares.
"The media interpretations of the top-line ENHANCE results, and the resulting stock price reaction, have been deeply troubling," Hassan stated. "This investment in Schering-Plough reflects my long-term confidence in the company. ... There are still significant challenges facing Schering-Plough, but I firmly believe this company can be turned around."
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