(Adds comments from CEO, analysts, details on drug pipeline)
By Ransdell Pierson
July 29 Merck & Co Inc reported
better-than-expected quarterly results on Tuesday, helped by
strong sales of consumer products and medicines for arthritis
and HIV, sending its shares up more than 1 percent in morning
Merck, the No. 2 U.S. drugmaker, has been busy with
deal-making in recent months, including an agreement to sell its
consumer care business to Germany's Bayer AG for
$14.2 billion. In June, it agreed to buy Idenix Pharmaceuticals
Inc for $3.85 billion and hopes to combine the two
companies' most promising drugs to produce a faster, more
effective cure for hepatitis C.
Chief Executive Kenneth Frazier, in a conference call with
analysts on Tuesday, said Merck was not interested in major
acquisitions, but instead favors smaller "bolt-on" deals like
the Idenix transaction.
Merck is counting on its experimental drugs, including an
immuno-oncology drug called pembrolizumab, to help drive revenue
and earnings growth in coming years, Frazier said.
The company plans to launch pembrolizumab by late October
for treatment of melanoma and is testing the drug for cancers of
the lung, head and neck and bladder. It plans to introduce
insomnia drug Suvorexant, long been delayed by safety concerns,
by late 2014 or 2015, if it is approved by regulators.
"Merck will likely have another flattish year in 2014 in
terms of financial performance but then growth should return
more consistently thereafter," helped by new drugs, Sanford
Bernstein analyst Tim Anderson said in a research note.
Merck shares were up 1.3 percent at $58.72.
The company earned $2.03 billion, or 68 cents per share, in
the second quarter. That compares with $906 million, or 30 cents
per share, in the year-earlier period, when it took charges for
acquisitions and restructuring.
Excluding special items, Merck earned 85 cents per share,
topping the average 81 cent forecast of analysts surveyed by
Thomson Reuters I/B/E/S.
U.S. rival Pfizer Inc on Tuesday also reported
better-than-expected quarterly results.
Merck said it expects full-year earnings of $3.43 to $3.53
per share, tightening its earlier forecast of $3.35 to $3.53.
The new outlook included expected dilution of up to 9 cents per
share from the Bayer and Idenix deals.
Global revenue slipped 1 percent to $10.93 billion, but
exceeded expectations of $10.6 billion.
Sales of consumer care brands, such as its Miralax laxative
and Afrin cold remedy, jumped 19 percent to $583 million. Sales
of prescription drugs slipped 2 percent to $9.1 billion, hurt by
a 21 percent drop for its Nasonex nasal allergy treatment due to
Sales of HIV treatment Isentress rose 10 percent to $453
million, while Remicade arthritis drug sales increased 15
percent to $607 million.
Combined sales of Merck's biggest drugs, diabetes treatments
Januvia and Janumet, rose 2 percent to $1.58 billion. Their
growth has slowed this year with competition from newer drugs.
(Editing by Michele Gershberg, Bernadette Baum and Jeffrey