Merck profits rise amid push to compete with generics

Posted: October 28, 2012

Drugmaker Merck & Co. Inc. said its third-quarter profits rose 2 percent in part because it cut costs to offset generic competition against key products.

Merck is based in Whitehouse Station, N.J., and has several facilities in the Philadelphia region.

Merck reported a profit of $1.73 billion for the quarter ending Sept. 30, vs. $1.69 billion for the same period in 2011. Sales revenue fell from just over $12 billion to $11.5 billion for the latest quarter.

Worldwide revenue from Merck's top-selling drug, the diabetes medication Januvia, grew 15 percent from $846 million to $975 million.

The asthma drug Singulair was Merck's top-selling drug in the third quarter of 2011. But it faced generic competition in the United States in August 2012 and overall sales dropped 55 percent for the quarter, from $1.336 billion to $602 million in 2012.

Merck executive vice president Adam H. Schechter told analysts during a conference call that within one month of the expiration of patent protection, "we saw a rapid 90 percent loss of prescription volume."

Gardasil, a vaccine to guard against human papillomavirus and often given to adolescents, is made at the Merck plant in West Point, Montgomery County. Merck reported a 31 percent increase in overall sales to $581 million, with an increase in boys being given the vaccine.

Like some other big pharmaceutical companies, Merck said last year that it would cut staff through 2014. Its quarterly financial report indicated it spent $110 million on "restructuring costs," which include severance payments.

"We will continue to drive value for our customers and shareholders through Merck's four-part strategy of executing on our core business, expanding geographically in high-growth markets, extending our complementary businesses and excelling at managing our costs while investing for growth," Merck chairman, chief executive officer, and Philadelphia native Kenneth C. Frazier said in a statement.

Merck shares closed Friday at $46.15, down 15 cents.


Contact staff writer David Sell at dsell@ phillynews.com or 215-854-4506. Read his blog at www.philly.com/phillypharma and on Twitter @phillypharma.

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