Will Reuters Turn Out to Be Right — About Animal Health “Auction”?

Did Schering-Plough file its Form 10-Q quickly to avoid having to put together significant “discontinued operations” disclosures related to Intervet? Or, will it turn out that Rueuters’ sources are right — and Merck’s Merial will be the divested Animal Health businesses — most-likely to Sanofi? We shall see:

. . . .The Intervet business drew scant bids by the July 15 deadline, fetching one bid from a large private equity firm and one from a large European pharmaceutical company, the sources said. Merial bids were due at the same time but it was unclear who had bid.

Intervet failed to attract many offers since the bidders believed that business ultimately will be kept by Merck and Schering, sources said.

“The Intervet auction was a farce. The bidders felt used even participating since the real auction is for Merial and there’s only one logical winner there — Sanofi,” said the source familiar with the talks. . . .

So, will we find out what really happened, perhaps as early as tomorrow? Who knows.

Schering/Merck US Cholesterol Market Share Now Only 8.6 Percent

Down from 10.1 percent, at year end 2008 — according to the Form 10-Q Schering-Plough filed overnight (at page 27). Updated graphics when I am finally off the road at right (click to enlarge):

. . . .As of June 2009, total combined prescription share for VYTORIN and ZETIA in the U.S. was down versus December 2008 from 10.1 percent to 8.6 percent. . . .

[Prior 10-Q, page 24:]

. . . .As of March 2009, total combined prescription share for VYTORIN and ZETIA in the U.S. was down versus December 2008 from 10.1 percent to 9.1 percent. . . .

In addition (as I guessed it had) during Q2 2009, Schering-Plough absorbed $79 million of what used to be $111 million of receivables owed to it, from the cholesterol joint venture (primarily undistributed income), at the end of Q1 2009.

It sure looks like the reported cholesterol franchise results would have been even worse, had the receivables balance not been dropped to $32 million, from $111 million. The comparable figure at year-end 2008 was $130 million. Looking back at prior Forms 10-Q, Schering-Plough has never drawn down receivables in that magnitude, and paid itself that much in a quarter. Canopic jars, anyone?