Merck nearly doubles first quarter income

April 21, 2008 6:01:57 AM PDT
Business is picking up for pharmaceutical giant Merck & Co.

The drugmaker on Monday reported that its profit almost doubled in the first quarter due to a $1.4 billion distribution from a partner drug company; its sales were slightly higher than a year ago.

The maker of allergy and asthma pill Singulair reported net income of $3.3 billion, or $1.52 per share, for the January-March period, up from $1.7 billion, or 78 cents a share, a year ago.

Excluding the $1.4 billion gain from AstraZeneca PLC of Britain and other one-time items, Whitehouse Station, N.J.-based Merck earned 89 cents per share in the latest quarter.

Revenues totaled $5.82 billion, up 1 percent from $5.77 billion in the first three months of 2007.

Analysts surveyed by Thomson Financial were expecting earnings of 86 cents per share, a figure that generally excludes one-time items, but had forecast higher revenues of $6.11 billion.

Merck, which is in the process of settling massive litigation over its withdrawn painkiller Vioxx, got hit with some new problems during the quarter.

Its osteoporosis treatment Fosamax, which had been the leading drug in the category and one of Merck's top sellers, got new generic competition. The company also had to reserve $40 million for legal defense costs amid about 940 lawsuits alleging the drug damaged jaw bone in some patients.

In addition, Merck and New Jersey neighbor Schering-Plough Corp., which have a profitable partnership selling cholesterol drugs, took a black eye when congressional investigators and some doctors alleged that to protect sales of their blockbuster drug Vytorin, the companies delayed releasing negative study results expected to significantly hurt revenues.

"Merck posted solid first-quarter results despite the loss of patent protection for Fosamax, as well as a decline in expected sales from our Merck/Schering-Plough joint venture," Merck's chairman and chief executive officer, Richard T. Clark, said in a statement.

The company reaffirmed its earnings forecast for the year of $3.28 to $3.38 per share, excluding about 60 cents worth of one-time items.