Merck was the latest US drugmaker to report forecast-beating earnings yesterday, raising its 2006 estimates and enjoying a 4% increase in its shares as a result.Second-quarter net income more than doubled to $1.5 billion or 69 cents a share, driven by Merck’s lucrative joint-venture with Schering-Plough for cholesterol-lowering drugs Vytorin (simvastatin and ezetimibe) and Zetia (ezetimibe), as well as the company’s swingeing cost-cutting efforts. Excluding the costs associated with site closures and job cuts, EPA would have been 73 cents, said the firm.Overall sales came in at $5.8 billion, up 6%, despite the fact that three of Merck’s top four products are now seeing declining sales.The exception to this was oral asthma medication Singulair (montelukast), 30% up at $950 million, while sales of cholesterol-lowerer Zocor (simvastatin) dropped 14% in the quarter to $990 million following its US patent expiry on June 23. Fosamax for osteoporosis fell 4% to $821 million, in this case because of generics biting into the brand’s market share in Europe, while the blood pressure franchise Cozaar (losartan) were flat in the second quarter at $784 million and down 1% for the half year (see table).On the plus side, combined sales of Zetia and Vytorin reached $973 million, and there were the first contributions from Merck’s newly-launched vaccine products. Rotavirus vaccine Rotateq added $31 million in the quarter, Gardasil for cervical cancer prevention brought in $10 million since its launch just over a month ago, and shingles vaccine Zostavax contributed $1 million.Analysts also said that Merck, like its peers in the pharmaceutical industry, is benefiting from an increase in prescription drug usage in older Americans, thanks to recent changes to Medicare policy in the USA.Merck raised its full-year guidance to $2.10-$2.24 per share, the second time this year it as increased its forecasts on the back of stronger-than-expected financial results, but said it would not provide third quarter forecasts because it was not sure how steeply the fall-off in Zocor sales would be. As a defensive measure, Merck has contracted with Dr Reddy’s Laboratories to sell an authorised generic version of the drug.

Top 10 products by first half 2006 sales

  1. Zocor $2.05bn -9%
  2. Singulair $1.75bn +20%
  3. Fosamax $1.57bn -3%
  4. Cozaar/Hyzaar $1.49bn -1%
  5. Proscar $371m +2%
  6. Primaxin $342m -7%
  7. Cosopt/Trusopt $327m +11%
  8. Vasotec/Vaseretic $276m -14%
  9. Cancidas $270m -
  10. Maxalt $190m +17%
Source: Merck & Core>Merck also gave an update on its Vioxx (rofecoxib) product liability litigation, noting that the number of outstanding personal injury cases now stands at around 14,200, with a further 190 class action. The company has vowed to fight each case individually, and so far has won four and lost three.The company also said it expected some important new pipeline news in the latter half of the year, including the US Food and Drug Administration’s verdict on Januvia (sitagliptin) for diabetes and Zolinza (vorinostat), its histone deacetylase inhibitor for advanced cutaneous T cell lymphoma.Shares in Merck closed up 4% to $38.95, their highest level since Vioxx was taken off the market in September 2004.