Merck & Co has seen earnings more than double for the second quarter of the year, after a vigorous spout of cost-cutting and a one-time gain from AstraZeneca ($741 million), after it bought out the US group's interest in Nexium and Prilosec, helped swell the overall result.
The firm booked net income of $2.03 billion, or $0.68 a share, up from the $906 million, or $0.30 a share, generated a year ago. Taking special items out of the equation, including acquisition and divestiture related costs, restructuring costs and other items, earnings came in at $0.85 cents per share, comfortably beating the $0.81 a share expected by analysts surveyed by Thomson Reuters.
Global revenue slipped 1% to $10.93 billion but were still ahead of the expected $10.6 billion, after a particularly strong performance by Merck's Consumer Care division (which is being sold to Bayer), saw sales leap 19% to $583 million.
On the downside, sales from prescription drugs slipped 2% to $9.1 billion, largely because of a 21% decline in turnover of the nasal allergy drug Nasonex (mometasone furoate monohydrate) to $258 million because of generic competition.
Sales from the hepatitis franchise of Victrelis (boceprevir), down 60% at $46 million, and Pegintron (peginterferon alfa-2b), down 27% at $103 million, also dropped because of continued generic erosion, the firm said.
But these declines were partially offset by growth from: Remicade (infliximab), jumping 15% to $607 million; Simponi (golimumab), leaping 44% to $174 million; and Isentress (raltegravir), up 10% at $453 million, as well as the cardiovascular franchise of Zetia (ezetimibe)/Vytorin (ezetimibe/simvastatin), climbing 6% to $1.13 billion, and the diabetes franchise of Januvia (sitagliptin)/Janumet (sitagliptin and metformin HCI), up 2% at $1.58 billion.
Looking forward
After grappling with patent losses that are hitting most of the industry, Merck is now looking to its late-stage pipeline to plug the gap and secure a return to growth, with a few more acquisitions thrown into the mix.
Most notably, the immuno-oncology candidate pembrolizumab is set for a launch in October as a treatment for melanoma and is being tested in a variety of other tumour types, and the firm is also hoping for a green light for its sleep drug Suvorexant later this year.
Sanford Bernstein analyst Tim Anderson has reportedly said in a research note that Merck "will likely have another flattish year in 2014 in terms of financial performance but then growth should return more consistently thereafter".
But Merck said it is lifting the lower end of its earnings forecast for 2014, now expecting a minimum of $3.43 per share instead of $3.35.
