Merck reported better-than-expected third-quarter earnings due to cost controls and strong sales of its diabetes and HIV treatments.
The company said reported net income of $3.42 billion, or $1.61 per share, in the third quarter. That compared with $1.09 billion, or 51 cents per share, in the year-earlier period.
Excluding special items, including a $1.7 billion after-tax gain from the sale of its Merial animal health business and restructuring charges, Merck earned 90 cents per share.
Merck said the profit beat was largely due to controls on its marketing and administrative expenses, as well as costs of its materials and products.
Global company sales rose 2 per cent to $6.05 billion, a bit higher than Wall Street's expectations of $6 billion. Revenue would have risen 5 per cent if not for the stronger dollar, which lowers the value of overseas sales.
To pave the way for its planned $41 billion purchase of Schering-Plough, Merck in July agreed to sell its half stake in the Merial pet care business for $4 billion to long-standing partner Sanofi-Aventis.
Merck is expected to reap huge cost savings from the Schering-Plough merger by cutting 15 per cent of their combined workforce. It will acquire a number of valuable Schering-Plough drugs, including arthritis treatment Remicade, overseas rights to a promising newer arthritis treatment called Simponi (golimumab) and a potential blockbuster blood-clot preventer now in late-stage studies.
During the quarter, sales of Merck's Gardasil vaccine against cervical cancer fell 22 per cent to $311 million, hurt by overseas competition from GlaxoSmithKline's rival Cervarix vaccine.
Combined sales of cholesterol fighters Vytorin and Zetia, sold in partnership with Schering-Plough, fell 7 per cent to $1 billion.
Quarterly sales of Merck's blood-pressure drugs Cozaar and Hyzaar slipped 3 per cent to $861 million, hurt by competition from Novartis' Diovan.
But Januvia, a new type of diabetes pill, continued to make inroads with doctors and patients, with sales growing 30 per cent to $491 million. And HIV treatment Isentress, which also works by a new mechanism of action, jumped 84 per cent to $197 million.
Sales of asthma drug Singulair, Merck's biggest product, rose 5 per cent to $1.1 billion. Although that is a slowdown from 16 per cent growth in the second quarter, it reflects a continuing rebound for Singulair, whose sales had declined in recent quarters due to concerns it might increase suicide risk.
Reuters