Propecia's Merck shows 5% Profit

Article by HairlossTalk.com

Merck reported Vioxx sales of $725 million, a 53 percent jump from the second quarter of 2000. But although the drug's revenues grew, they have failed to live up to Wall Street forecasts.

"My outlook was $745 million in sales for Vioxx, and Merck came in a bit light," Krensavage said. "The key drug is Zocor, that was $130 million less than I had expected."

Merck said Zocor, which competes with No. 1 drugmaker Pfizer Inc.'s potent Lipitor, notched second-quarter sales of $1.36 billion, only 5 percent higher than a year earlier. That's a dramatic slowdown in growth for its flagship medicine, which boasted 17 percent growth in full-year 2000.

But Merck executives said on a conference call that the growth slowdown stemmed largely from wholesalers that stocked up heavily on Zocor in the first quarter. The company sees full-year sales of the drug perhaps rising as much as 17 percent to $6.2 billion for the full year.

NEWER CASH COWS

But several profitable newer drugs remained powerful cash cows. Quarterly sales of Singulair, for example, leaped 79 percent to $375 million, while Fosamax's revenues jumped 51 percent to $490 million. Combined sales of newer hypertension drugs Cozaar and Hyzaar, rose 23 percent to $510 million.

The drug giant said its Merck-Medco unit, which helps manage filling of prescriptions for insurers and managed-care companies, processed 134 million prescriptions in the quarter, a 37 percent increase for the low-margin unit.

Merck said it recently reached an agreement to receive a fixed rate of 27 percent from AstraZeneca on profits from U.S. sales of Nexium, a newer ulcer drug launched in March and meant to succeed AstraZeneca's Prilosec. Under previous arrangements, Merck keeps over 30 percent of profits from U.S. sales from Prilosec, the world's top-selling drug.

Merck reaffirmed comfort with 2001 earnings forecasts of $3.12 to $3.18 a share, or growth of up to 9.5 percent.

Analysts polled by First Call are expecting the company to post earnings of $3.14 a share for 2001

Merck shares fell 58 cents to $66.72 in midday New York Stock Exchange trade. After peaking at $96.63 in November, the stock is off about 27 percent, underperforming its peers on the American Stock Exchange Pharmaceutical Index, which are off more than 10 percent for that period.

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