Merck Revenue Falls on Generic Competition, Currency -- 2nd Update
May 05 2016 - 11:10AM
Dow Jones News
By Austen Hufford
Merck & Co. posted a revenue decline as generic competition
and currency fluctuations hurt its results.
Merck said it expects 2016 adjusted earnings per share of
between $3.65 and $3.77, compared with its previous projection of
$3.60 to $3.75. It expects revenue to be between $39 billion and
$40.2 billion, raising the lower end of its guidance by $300
million. Analysts polled by Thomson Reuters had expected earnings
of $3.71 a share on revenue of $39.85 billion.
The change in the earnings-per-share expectations reflects
favorable exchange rates, which were partially offset by an
earlier-than-anticipated entry of a generic competitor to
allergy-symptom treatment Nasonex.
Shares of Merck were down 1.5% in morning trading.
Merck Chief Executive Kenneth Frazier said the company is
actively pursuing acquisitions to bolster its drug pipeline. On a
conference call with analysts, Mr. Frazier said Merck wasn't
interested in large "consolidation" deals, but would consider
purchases bigger than its $8.3 billion acquisition of antibiotic
specialist Cubist Pharmaceuticals last year.
Nasonex sales fell 21% in the first quarter from the year prior
due to continued pressure from the availability of generic
fluticasone and other over-the-counter alternatives. A generic
version of the treatment became available in the U.S. in March, and
the company said it expects significant losses in future sales.
Sales of Remicade, a treatment for inflammatory diseases,
decreased 30% because of a loss of exclusivity and the accelerating
impact of competition by biosimilar drugs.
The quarter's pharmaceutical revenue declined 2% to $8.1
billion, including a 4% negative impact from currency fluctuations.
The constant-currency growth was driven by growth in cancer
treatments, hospital acute care and diabetes treatments.
Combined sales of Type 2 diabetes treatments Januvia and Janumet
increased 4% on a constant-currency basis.
Cancer drug Keytruda posted sales of $249 million in the most
recent quarter compared with $83 million in the same quarter last
year. Merck is continuing to develop and launch the drug for
different types of cancers and its development program includes 30
tumor types across more than 250 clinical trials.
In January, the U.S. Food and Drug Administration approved
Merck's new treatment, Zepatier, for hepatitis C, the latest
entrant in a booming market for drugs for the viral infection -- a
market now dominated by Gilead Sciences Inc. Merck had initial
sales of $50 million for Zepatier in the first quarter.
The company posted a profit of $1.13 billion, or 40 cents a
share, up from $953 million, or 33 cents a share, a year prior.
Excluding restructuring and acquisition-related costs, per-share
earnings rose to 89 cents from 85 cents. Sales slipped 1.2% to
$9.31 billion.
Analysts had forecast per-share earnings of 85 cents a share on
revenue of $9.46 billion.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
May 05, 2016 10:55 ET (14:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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