Friday, May 22nd15.1°C
24963
25998

Merck second-quarter profit more than doubles, tops forecast

A big one-time gain and a tax benefit helped drugmaker Merck & Co. more than double second-quarter profit, improve its profit forecast and top analysts' expectations.

The maker of popular Type 2 diabetes pill Januvia said Tuesday that net income increased to $2 billion, or 68 cents per share, from $906 million, or 30 cents per share, in the same quarter a year earlier.

Merck, based in Whitehouse Station, New Jersey, said its earnings, adjusted for one-time gains and costs, were 85 cents per share. Analysts surveyed by Zacks Investment Research expected 81 cents.

Merck recorded a $741 million gain from AstraZeneca PLC, which exercised its option to buy out Merck's interest in the British drugmaker's heartburn drugs Nexium and Prilosec.

The world's fourth-biggest drugmaker's revenue fell 1 per cent to $10.93 billion, still $220 million above Wall Street expectations.

CEO Kenneth Frazier said on a conference call that Merck favours smaller acquisitions — like its $3.85 billion purchase of hepatitis C treatment developer Idenix Pharmaceuticals Inc., expected to close this quarter — and is not looking for a deal enabling it to move its legal headquarters to a country with a lower tax rate.

That strategy, called inversion, is suddenly hot in corporate America. The U.S. has the world's highest corporate tax rate, 35 per cent, but pharmaceutical companies here generally pay well under 30 per cent.

Chicago-based drugmaker AbbVie Inc. just reached a $55 billion deal to combine with British counterpart Shire PLC and incorporate in Britain.

BernsteinResearch analyst Dr. Timothy Anderson wrote to investors that Merck "will likely have another flattish year in 2014 in terms of financial performance but then growth should return more consistently."

Merck noted it expects by early next year to launch two new drugs awaiting approval: long-delayed suvorexant for insomnia and pembrolizumab for advanced melanoma. The latter is part of the promising new class of drugs that stimulate the immune system to identify and attack cancer cells.

Meanwhile, Merck got U.S. approval in April for two tablets to gradually reduce grass and ragweed allergies, and in May for anticlotting drug Zontivity.

Sales of Merck's prescription drugs fell 2 per cent to $9.09 billion. Top sellers were Type 2 diabetes pills Januvia and Janumet, up 2 per cent at $1.58 billion, and cholesterol medicines Zetia and Vytorin, up 6 per cent to a combined $1.13 billion.

Merck's consumer health segment had the biggest sales increase, up 19 per cent to $583 million. In May, Merck agreed to sell that to Germany's Bayer for $14.2 billion. It includes Claritin and the Coppertone sun-care line.

Merck said it expects full-year sales of $42.4 billion to $43.2 billion and profit of $3.43 to $3.53 per share, excluding one-time items. In January, it forecast $3.35 to $3.53.

In morning trading, Merck shares were up 72 cents at $58.69. They have increased 20 per cent in the last 12 months.

___

Follow Linda A. Johnson at www.twitter.com/LindaJ_onPharma.

The Canadian Press


Read more Business News

26416


Recent Trending




Today's Market
S&P TSX15180.40-23.21
S&P CDNX701.20+0.69
DJIA18261.41-24.33
Nasdaq5097.48+6.69
S&P 5002129.22-1.60
CDN Dollar0.8146-0.0049
Gold1206.00+1.60
Oil57.45-1.98
Lumber268.50-1.10
Natural Gas2.931-0.018

 
Okanagan Companies
Pacific Safety0.145+0.010
Knighthawk0.010.00
QHR Technologies Inc1.45+0.00
Cantex0.03-0.01
Anavex Life Sciences0.3905+0.0185
Metalex Ventures0.09+0.01
Russel Metals25.87+0.05
Copper Mountain Mining1.39-0.02
Colorado Resources0.10-0.00
ReliaBrand Inc0.0097-0.0003
Sunrise Resources Ltd0.04+0.01
Mission Ready Services0.185+0.000
Decisive Dividend Corporation2.20+0.60

 



25538

FEATURED Property
2238081322 - 3880 Truswell Road
3 bedrooms 4 baths
$1,450,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Do or do not

Photo: Thinkstock.com“The optimist sees the rose and not its thorns; the pessimist stares at the thorns, oblivious of the rose.” - Kahlil Gibran Good planning is all about managing chan...


Penetrate the smokescreen

Photo: ContributedHas this ever happened to you? You’re in the middle of your second or third “good discussion” with a prospect. Everything’s going great. The prospect seems en...


Squaring the circle

Photo: Thinkstock.comI have been reading about market segmentation and choice. Howard Moskowitz’s research into tomato sauce as retold by Malcom Gladwell on the TED talks (http://www.ted.com/tal...

_



25482

26418


Member of BC Press Council


25771