Sales of Merck's ($MRK) asthma drug Singulair were up 5.7%. Its diabetes drug Januvia grew 36% to $1.06 billion, and sales of its other key diabetes treatment, Janumet, climbed 28% to $411 million. In fact, its drug sales climbed 1.9% to $10.56 billion. But it wasn't enough to offset the money the company spent to position itself for the loss of falling revenues when Singulair loses patent protection in August and others follow in the months to come.
The company beat analysts' expectations Friday, but earnings fell 11% as charges for restructuring undercut those better-than-expected numbers,The Wall Street Journal points out. It's earned 58 cents a share, down from 65 cents a year earlier. The good news was that when it strips out all of the expenses around job cuts and restructuring, it earned $1.05 a share, up from from 95 cents--more than analysts forecast.
Merck's future actually looks pretty good, Tony Butler, an analyst with Barclays tells Bloomberg, which points out Merck's stock has grown about 15% this year, nearly double the 8% for the S&P. "We have long held the view that Merck's pharmaceutical R&D pipeline is among the most undervalued in the pharmaceutical sector," Butler says.
Drugs in the pipeline include its osteoporosis drug Odanacitib, which Butler thinks could generate $2.5 billion annually if its gets approved. It also is focusing on drugs for hepatitis C and diabetes.
The company is also taking some of the other steps that competitors also are trying, negotiating deals on other companies' promising products, even putting some venture capital money into start-ups, looking for another Singulair.
- read the Wall Street Journal story
- here's the Bloomberg article
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