April 23 (Bloomberg) -- Schering-Plough Corp., the maker of the Vytorin and Zetia cholesterol pills, said first-quarter profit fell 48 percent, less than analysts expected, on costs for acquiring Organon Biosciences NV.

Profit excluding some items was 53 cents a share, beating analysts' estimates by 15 cents and boosting shares the most in almost three weeks in New York trading. Net income for the quarter was $291 million, or 15 cents a share, the Kenilworth, New Jersey-based company said today in a statement.

Revenue jumped 57 percent with the addition of the Organon products. The $16 billion purchase aims to reduce Schering's dependence on Zetia and Vytorin, the company's best-selling products. U.S. sales slowed after a January study questioned their benefit and Chief Executive Officer Fred Hassan repeated today that the company was cutting 5,500 jobs as a result.

``The added visibility from the Organon acquisition and cost cutting are necessary, welcome, and helpful,'' said Deutsche Bank analyst Barbara Ryan in a note to investors today. ``Schering-Plough is no longer a growth story, but a cost- cutting one.''

Organon is the world's third-largest maker of birth-control products, including the contraceptive devices Nuvaring and Implanon. Schering-Plough bought Organon, a unit of Amsterdam- based chemical maker Akzo Nobel NV, in November and the deal added four cents to earnings in the first quarter.

Shares Rise

Schering-Plough rose $1.13, or 6.6 percent, to $18.27 at 4 p.m. in New York Stock Exchange composite trading. That's the most since April 3, the day after the company announced job cuts. The drugmaker has fallen 31 percent this year.

In the year-earlier quarter, Schering-Plough recorded net income of $565 million, or 36 cents a share. The drugmaker hasn't forecast earnings for more than five years.

Revenue for the quarter rose to $4.7 billion from $3 billion as sales of the rheumatoid arthritis treatment Remicade increased 36 percent to $507 million and the allergy treatment Nasonex increased 8 percent to $307 million.

Revenue from Vytorin and Zetia increased 6 percent, below what some analysts expected. Combined sales for the drugs in the U.S. fell 5 percent, while increasing 46 percent overseas.

A price increase of 5.5 percent for both drugs helped offset declining prescriptions in the U.S., said Bear Stearns & Co. analyst John Boris in an April 18 note to clients. U.S. prescriptions for Vytorin fell 7 percent and Zetia fell 10 percent in the first quarter after a study showed Vytorin, a combination of Zetia and Merck's Zocor, worked no better than Zocor alone.

Cardiology Meeting

Sales of the drug are likely to decline this year after a panel of doctors said on March 30 at a meeting of cardiologists in Chicago that the medicines should be used only as a last resort. Goldman, Sachs & Co. analyst Jim Kelly said sales of the two drugs, which reached more than $5 billion last year, may fall by 24 percent this year and 20 percent next year.

Merck and Schering-Plough have received subpoenas from attorneys general in New Jersey, Connecticut, and New York for information about how the study, called Enhance, was handled. Congress is also investigating the companies.

The attention given the Enhance study has been an ``unwarranted uproar,'' Chief Executive Officer Fred Hassan said today in a conference call with analysts. The company will continue to aggressively promote use of the drugs because of their proven ability to lower levels of cholesterol, which can build up on artery walls creating a blockage.

`Advocating Use'

``We are committed to these treatments and we will continue to advocate their appropriate use,'' Hassan said. ``We have been challenged before, we've succeeded, we can do it again.''

Schering said on April 2 it would cut 10 percent of its workforce, about 5,500 workers, and shut plants to save $1.5 billion as it braces for falling Vytorin and Zetia sales in the U.S. Hassan reiterated that during his call today.

The company also said today that it has increased spending on research by 24 percent to $880 million as it expands the number of drugs in testing.

Hassan is also counting on sales outside the U.S. to help offset loses from Zetia and Vytorin. About 70 percent of the company's first-quarter revenue was generated outside the U.S. as the result of a four-year effort, Hassan said today in an interview.

`Rest of the World'

``We've been going into a lot of markets that historically the pharmaceutical industry doesn't bother with,'' Hassan said. ``The conventional thinking is to think about the U.S., and maybe a little bit about Europe and Japan, and not bother with the rest of the word. But we said the rest of the world is going through a major change, and half-a-billion people are moving into the middle class.''

Hassan said Vytorin sales haven't fallen outside the U.S. because there was less media coverage of the Vytorin study. This showed the media response was ``unwarranted,'' he said.

``We have a very strange situation where this is a U.S. media driven event,'' Hassan said. ``There is a lot of confusion out there, but only in the U.S.''

To contact the reporter on this story: Shannon Pettypiece in New York at spettypiece@bloomberg.net

Last Updated: April 23, 2008 16:30 EDT