Merck Q4 net drops 14 pct. on generic competition

Published on NewsOK Modified: February 5, 2014 at 3:18 pm •  Published: February 5, 2014
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Merck & Co.'s fourth-quarter profit dropped 14 percent, with its aggressive cost cutting not enough to offset restructuring charges, generic competition to former blockbuster medicines and unfavorable currency exchange rates.

Results just missed Wall Street expectations, and even though Merck said 2014 will be a "trough year" for revenue, shares briefly hit a six-year high of $55.20. That's because the world's third-biggest drugmaker separately announced new, potentially lucrative alliances.

Merck will collaborate with three other drugmakers to test its hot experimental cancer drug, called MK-3475, in combination with theirs. It's in a new class of cancer medicines meant to restore the immune system's natural ability to spot and target cancer cells.

The company also reported net income of $781 million, or 26 cents per share, down from $908 million, or 30 cents per share, a year earlier.

The maker of the Type 2 diabetes pill Januvia said that excluding one-time items, net income was $2.6 billion, or 88 cents per share — a penny shy of analysts' expectations.

Revenue totaled $11.32 billion, down 4 percent. Analysts expected $11.36 billion.

Sales were lower than expected for Januvia, HPV vaccine Gardasil and a few other products, but higher than expected for immune disorder drug Remicade, HIV drug Isentress and cholesterol pills Zetia and Vytorin.

Two issues dominated Merck's conference call with analysts. Asked about MK-3475's potential, as a solo treatment and combined with drugs from new partners Pfizer Inc., Amgen Inc. and Incyte Corp., Merck said it's too soon to tell.

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