Merck 3Q profit up 2 pct despite sales decline
Drugmaker Merck & Co. said Friday that third-quarter profit rose 2 percent as reduced spending on overhead offset lower sales due to new generic competition for its top-selling drug, Singulair.
The maker of diabetes pill Januvia beat Wall Street's profit expectations. The company also narrowed its 2012 profit forecast, to a range of $2.08 to $2.24 per share, from its July forecast of $2.04 to $2.30.
Merck, based in Whitehouse Station, N.J., said net income was $1.73 billion, or 56 cents per share. That was up from $1.69 billion, or 55 cents per share, a year earlier.
Excluding charges totaling $1.2 billion, net income was $2.93 billion, or 95 cents per share, 2 cents more than analysts expected. Charges included $1.34 billion in acquisition and integration costs, plus $163 million in restructuring costs.
Revenue was $11.5 billion, down 4 percent. Analysts expected $11.57 billion.
Sales of asthma and allergy pill Singulair dove 55 percent, to $602 million.
Strong global sales offset the impact of Singulair's U.S. patent expiring on Aug. 3, CEO Kenneth Frazier said in a statement. The drug brought Merck $5.5 billion in sales last year.
Like nearly all big drugmakers that have reported third-quarter results, Merck has been hit by new generic competition to a top seller, as patients and insurance plans defect almost overnight to the much-cheaper copycat drugs. But Merck has fared better than most, with only a small drop in total revenue and slightly higher profit.
That's because four Merck growth drivers posted sales increases of at least 15 percent: Januvia and combination diabetes pill Janumet, HIV drug Isentress and Gardasil, a vaccine against sexually transmitted cancers caused by human papilloma virus. Januvia and Janumet together brought in nearly $1.4 billion.
In addition, the company reduced spending on production, marketing, administration and research, and also benefited from lower taxes.
Prescription drug sales totaled $9.88 billion, down 5 percent. But consumer health products, including the Coppertone sun-care line and Dr. Scholl's foot-care products, saw sales climb 7 percent to $451 million. Sales of veterinary medicines dipped 1 percent to $815 million.
"With our robust pipeline, we remain on target to submit multiple new products for marketing approval between now and the end of 2013," Frazier said.
Those include suvorexant, a new type of insomnia drug with minimal morning grogginess, and vorapaxar, an anticlotting drug for preventing heart attacks and strokes in certain patients. Others include osteoporosis drug odanacatib, cholesterol medicine Tredaptive, ovarian and lung cancer drug vintafolide, a drug to reverse the effects of anesthesia called Bridion and an improved version of Gardasil.
(Copyright 2012 by The Associated Press. All Rights Reserved.)