German drugmaker Merck KGaA reaped the benefit of its speculative takeover approach for Schering AG, after the sale of a 20% stake in the firm to rival suitor Bayer helped its second quarter earnings all-but double to 649 million euros.
Merck’s stake netted it a profit of 397 million euros, although the firm’s earnings before interest and taxes (EBIT) still fell a little short of analyst consensus estimates.
Sales rose 4.5% to 1.52 billion euros, driven by again a little lower than expected, with gains across all its divisions but especially ethical pharmaceuticals and liquid crystals.
Pharmaceutical sales came in above a billion euros for the second quarter in a row, up 4.4% to 1.01 billion euros, with flagship cancer drug Erbitux (cetuximab) up 56% to 81 million euros, helped by new approvals in head and neck cancer that add to its initial colorectal cancer indication. Turnover of Merck’s thyroid medicines franchise rose 5.5% to 31 million euros.
On the downside, sales of diabetes drug Glucophage (metformin) continued to decline, down 3.7% to 63 million euros, while beta blocker bisoprolol (sold as Concor and Lodoz) fell 3.1% to 84 million euros.
The company’s generics business saw a modest 1.6% increase in sales to 448 million euros, against a backdrop of increasing price competition and controls in the UK and Germany, respectively, offset by double-digit growth in countries such as France, Italy, Spain and Slovakia. Sales of US unit Dey rose 6%.
“These second-quarter results demonstrate that Merck is a very profitable company. Even excluding exceptional gains, our profit after tax increased 40% to 172 million euros,” said Michael Roemer, Merck’s chairman.
Sales of liquid crystals increased 8.4% to 198 million euros in the second quarter, a little down on the growth seen in the first quarter, although operating income at the division was up by a third.
Merck reaffirmed its full year 2006 guidance, saying that sales will increase at above 10% with operating income growth in the double digits.