Merck & Co has suffered a decline in sales and profits in the first quarter, hit by patent expiries on its asthma/allergic rhinitis blockbuster Singulair and disappointing sales for some big-earners, notably the diabetes drug Januvia.
Net income came in at $1.59 billion, down 8% while turnover declined 9% to $10.67 billion and pharmaceutical sales fell 12% to $8.89 billion. Singulair (montelukast) sank 75% to $337 million following patent expiry in the main European markets in February 2013, having gone generic in August 2012 in the USA.
The company's best-selling drug is the diabetes drug Januvia (sitagliptin) which generated $884 million, to the surprise of many analysts a decline of 4%. Janumet (sitagliptin plus metformin) brought in $409 million, a rise of 4%. Turnover from the HIV drug Isentress (raltegravir) reached $362 million, up 8%, while sales of the cervical cancer vaccine Gardasil soared 37% to $390 million.
The cholesterol drugs Vytorin (ezetimibe plus simvastatin) and Zetia (ezetimibe) reached $394 million and $629 million, down 11% and up 2% respectively. The anti-inflammatory Remicade (infliximab), the Johnson & Johnson drug which Merck sells outside the USA, contributed $549 million, up 6%, while the hepatitis C treatment Victrelis (boceprevir) dipped 1% to $110 million. The herpes vaccine Zostavax shot up from $76 to $168 million.
Chief executive Kenneth Frazier said the performance "reflects the challenges of major patent expiries coupled with the impact of currency and other headwinds". He also unveiled a $15 billion share repurchase programme, and Merck expects to purchase $7.50 billion of that over the next year.
Mr Frazier said the move "reflects the board’s confidence in our long-term growth strategy and the company’s future performance". Analysts are concerned, however, and Andrew Baum at Citibank issued a research note saying that "the weakness of Merck's quarter can only be regarded as a clarion call for management and investors".