Diabetes drug boosts Merck’s profits in fourth quarter
Net income was $1.51 billion (€1.14bn), or 49 cents a share, compared with a loss of $531 million, or 17 cents, a year earlier when Merck took a $1.7bn charge to write down the value of an experimental blood thinner, the Whitehouse Station, New Jersey-based company said yesterday.
The company employs 2,330 people directly in Ireland and supports a further 9,000 Irish jobs.
Merck forecast full-year earnings excluding one-time items of $3.75 to $3.85 a share, in range of analyst estimates of $3.84.
The company is trimming jobs to reduce costs as it prepares for generic competition to the asthma medication Singulair, coming in August. Merck introduced a hepatitis C drug last year and is working on another.
“In terms of top line, it is a modest growth,” said Aparna Krishnan, an analyst at IHS Global Insight in London, in a phone interview.
“They face lots of pressure in 2012. It is going to be very challenging.”
Revenue rose 1.7% to $12.3bn, less than the analyst estimates of $12.5bn.
Sales of Januvia for diabetes jumped 42% to $960 million, while revenue of the company’s human papillomavirus vaccine Gardasil increased 24% to $274m.
Those gains were countered by a 16% decline in sales for the cholesterol drug Vytorin and a 28% drop for the arthritis drug Remicade.
In July, Merck transferred exclusive Remicade marketing rights in South and Central America, the Middle East, Canada, Africa, and Asia Pacific to Johnson & Johnson.
“It was a decent fourth-quarter overall,” said Timothy Anderson, an analyst at Sanford C. Bernstein analyst in New York, in a note to clients.
Merck said that it expected 2012 sales to be “at or near” 2011 levels on a constant currency basis.
Assuming current exchange rates, sales would decline 2% to 3% from 2011, the company said. Analysts had expected 2012 sales of $47.6bn. The company said that research and development spending would be little changed in 2012.
In July, Merck said it would eliminate another 12,000 to 13,000 jobs by 2015, expanding a restructuring program that cut 11,500 positions in 2010.
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