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Singular Drop Weighs on Merck

Fri, 02/01/2013 - 8:21am
Linda A. Johnson

Merck & Co.'s fourth-quarter profit fell 7% as generic competition slashed sales of its blockbuster allergy drug Singulair and the drugmaker took sizeable restructuring and acquisition charges. The company still beat Wall Street expectations.

The world's third-biggest drugmaker by revenue said that net income was $1.4 billion, or 46 cents per share, down from $1.51 billion, or 49 cents per share, a year earlier.

Excluding one-time charges totaling $1.14 billion, net income was $2.54 billion, or 83 cents per share, 2 cents more than analysts polled by research provider FactSet were expecting.

The U.S.-based maker of Januvia and other diabetes pills says revenue totaled $11.74 billion, down 5% from 2011's fourth quarter. Analysts expected $11.47 billion.

"Merck overcame significant challenges last year and delivered strong results in 2012 by successfully growing our businesses, expanding geographically and reducing our expenses," CEO Kenneth Frazier said in a statement.

Along with the weak global economy and government health programs in many countries trying to rein in spending, Merck has been hurt by generic rivals to what had been its top seller. Singulair, which treats asthma and allergies, lost patent protection in the U.S. in early August. In the last quarter, its global sales nosedived 67% to $480 million.

That pulled down total prescription drug sales by 6%, to $10.09 billion. Most of Merck's other big drugs produced higher sales, led by the Januvia Type 2 diabetes drug, up 18% to $1.13 billion, and Janumet, a diabetes combo pill, up 17% to $452 million.

Merck's smaller divisions saw increased sales, however. Veterinary medicine sales edged up 3% to $898 billion. Sales of consumer health products such as Dr. Scholl's foot care products climbed 9% to $395 million.

Merck forecast 2013 earnings per share of $3.60 to $3.70, excluding charges. Analysts were expecting $3.68 per share.

In premarket trading, Merck shares dipped 45 cents to $42.80.

For the full year, Merck reported net income of $6.66 billion, or $2.16 per share, up from $6.27 billion, or $2.02 per share. But sales in 2012 dipped nearly 2%, to $47.27 billion.

Date: February 1, 2013
Source: Associated Press

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