At the very end of this morning's hour-long teleconference with Wall Street analysts, Fred Hassan was asked a question by Jami Rubin of Morgan Stanley about Vytorin income this year. She noted that even her 11-year-old is aware Vytorin sales will drop this year, but she asked Fred if he and his team could be more specific about the amount of income to be received from its joint venture with Merck.
You may recall that, earlier this week, Merck week disclosed it expects equity income from the venture to fall by $700 million this year due to the hoopla over Vytorin. Unlike Merck, Schering-Plough has been unwilling to provide any numbers, probably because Schering-Plough is more vulnerable than Merck to a big drop. So Fred blew her off by insisting there is no way to estimate such a figure. "There is no model we can relate to that can give us any certain prediction," he told Rubin.
Really? Yesterday, Schering-Plough filed a Frequently Asked Questions document with the Securities and Exchange Commission indicating that its joint venture with Merck has, indeed, developed some kind of model:
Q: What is Schering-Plough’s comment on Merck’s guidance regarding the cholesterol franchise? A: Schering-Plough does not provide numeric guidance and does not comment on the guidance of other companies. The Merck/Schering-Plough cholesterol joint venture developed potential scenarios about the 2008 equity income. Merck chose an estimate that is within the ranges established in those scenarios.
So has anyone shown those scenarios to Fred? Or does he not read them?
Hat tip to ShearlingsPlowed