The Canadian Press - ONLINE EDITION

Merck second-quarter profit more than doubles, tops forecast

  • Print

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.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Zoo officials detail tiger death

View more like this

Photo Store Gallery

  • June 25, 2013 - 130625  -  A storm lit up Winnipeg Tuesday, June 25, 2013. John Woods / Winnipeg Free Press - lightning
  • A monarch butterfly looks for nectar in Mexican sunflowers at Winnipeg's Assiniboine Park Monday afternoon-Monarch butterflys start their annual migration usually in late August with the first sign of frost- Standup photo– August 22, 2011   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

Do you think the Jets' three pre-season losses in a row are a sign of things to come?

View Results

View Related Story

Ads by Google