A combination of stringent cost cutting and some good performances by recently launched products helped Merck & Co offset the loss last year of its blockbuster painkiller Vioxx (rofecoxib) in its third quarter figures.
The US drugmaker posted a 7% rise in third-quarter earnings to $1.42 billion dollars, although net sales declined 2% to $5.4 billion. Vioxx withdrawal because of safety concerns [[01/10/04a]] accounted for a three-point decline, offset by a 1% growth in other revenues.
In a statement, Merck CEO Richard Clark said the results were in line with internal projections, and he promised to present details before the end of the year of a plan designed to improve the company's long-term performance.
Among Merck's key product lines, cholesterol-lowering drug Zocor (simvastatin) - the firm's top-selling product - continued to succumb to the effects of generic competition in Europe and dropped 14%, with revenues at $1 billion for the quarter.
Some of the pain of this was taken away by a strong uptake in sales of Merck and Schering-Plough's combination cholesterol-lowering drugs Zetia/Ezetrol (ezetimibe) and Vytorin/Inegy (simvastatin and ezetimibe). The former saw a 21% increase in sales to $356 million in this third quarter, while the latter - approved in August 2004 [[22/10/04a]] - brought in $274 million.
Sales for the osteoporosis franchise based on Fosamax (alendronate) were flat compared to third-quarter 2004, at $777 billion, resulting from increased competition in the therapeutic category. Merck is also facing generic competition to Fosamax from 2007 in Europe and 2008 in the USA [[18/10/05d]] [[21/07/04e]].
On the plus side, asthma and rhinitis drug Singulair (montelukast) reached $692 million in the quarter, up 11%, helped by a new US approval for indoor allergies. Meanwhile, combined sales of antihypertensive drugs Cozaar (losartan) and Hyzaar (losartan plus hydrochlorothiazide) rose 6% to $751 million in the quarter.
Merck said it expects earnings per share for 2005 to be in the $2.47-$2.51 range, excluding a charge related to the Vioxx withdrawal that was taken in the second quarter [[22/07/05a]]. Analysts have been predicting $2.49.
Meantime, Merck said it had not increased its $675 million reserve fund to cover the cost of Vioxx litigation costs, to cover any potential liabilities. The number of individual personal injury lawsuits is running at 6,400, while 160 class action suits have also been filed.