Merck & Co has posted a strong rise in earnings for the first quarter but the performance has been overshadowed somewhat from the firm’s prediction that future sales of the controversial cholesterol drugs Vytorin and Zeltia are set to suffer a sharp decline.
The New Jersey-
based drugmaker said that net income reached $3.30 billion, a rise of 93.8%, boosted by a $1.4 billion gain from its gastrointestinal partnership with AstraZeneca. Sales growth was less impressive with revenues sneaking up 1% to $5.82 billion.
Merck’s biggest seller continues to be the asth
ma drug Singulair (montelukast), the number one prescribed respiratory drug in the USA, which added $1.1 billion to the firm’s coffers (up 10%), while Vytorin (ezetimibe plus simvastatin) and Zetia (ezetimibe), sold through a joint venturte with Schering-Plough, were up 6% to $1.2 billion. Zetia sales reached $582 million, an increase of 7%, and Vytorin rose 4% to $651 million.
However Vytorin has become mired in controversy since the results of the ENHANCE trial were finally released, which showed Vytorin was no more effective at slowing the progression of atherosclerosis than simvas
tatin (the now genericised Zocor) alone. Merck, which booked $393 million from the S-P JV, said it sees its income from the joint venture dropping by $700 million in 2008 as a result.
Revenues from the anti-hypertensives, Cozaar (losartan) and Hyzaar (losartan plus hydrochlorothiazide), were
up 6% at $847 million, while sales of the osteoporosis drug Fosamax (alendronate) slumped 37% to $470 million, following the loss of patent protection in the USA in February.
Merck’s new drugs are on the up, with diabetes drug Januvia (sitagliptin) generating $272 million for the quarter, compared with $87 million in the same quarter in 2007, while Janumet (sitagliptin plus metformin) brought in $58 million. Sales of the cervical cancer vaccine Gardasil rose 7% to $390 million, while the rotavirus jab RotaTeq climbed 123.5% to $190 million. Turnover from the recently-launched HIV drug Isentress (raltegravir) reached $47 million.
Merck reiterated its full-year earnings guidance of $3.28 to $3.38 per share and chief executive Richard Clark said this shows that the firm “has the right strategy in place to manage through difficult industry dynamics and unexpected challenges”. He added that the company’s ‘Plan to Win’ initiative begun in 2005 “has allowed us to improve efficiencies while at the same time growing the top line”.
This point was taken up by Deutsche Bank analyst Barbara Ryan who said that added: “Merck’s strong base business performance has been, and will continue to be, driven by cost-cutting via restructuring, and strong sales of new products, namely Gardasil and Januvia.”
