Merck's quarterly profit off 57%

Merck & Co. Inc. yesterday reported a 57 percent drop in first-quarter profit, short of Wall Street estimates, as sales of key drugs fell.

The maker of asthma and allergy drug Singulair and the Gardasil vaccine against cervical cancer said net income totaled $1.43 billion, or 67 cents per share. A year ago, first-quarter net income was $3.3 billion, or $1.52 a share.

Last year's results included a one-time pretax gain of $2.2 billion from Merck's partnership with Britain's AstraZeneca P.L.C.

Merck, whose vaccine operations are headquartered in West Point, Montgomery County, also said the global recession hurt results.

Merck shares closed down $1.68, or 6.66 percent, at $23.54 on the New York Stock Exchange.

The Whitehouse Station, N.J.-based company reported revenue of $5.39 billion, down 8 percent from $5.82 billion in the first three months of 2008.

Excluding charges totaling 7 cents a share, for a restructuring program begun last year and for expenses related to its pending acquisition of Schering-Plough Corp., earnings per share were 74 cents. Analysts polled by Thomson Reuters were expecting, on average, 77 cents per share and revenue of $5.77 billion.

The company said the strong dollar reduced global sales by 3 percent in the quarter, and generic competition for its blockbuster osteoporosis drug Fosamax pulled down sales another 3 percent.

Sales of the cholesterol drugs Vytorin and Zetia, which Merck sells under a partnership with Schering-Plough, plunged 23 percent to $945 million; the drugs have been hurt by questions about their efficacy and safety.

Sales of Gardasil dropped 33 percent to $262 million and Fosamax sales plunged 44 percent to $261 million.

Most other Merck drugs saw slight sales drops, including Singulair, at $1.1 billion; blood pressure medicines Cozaar and Hyzaar, at $839 million; and the rotavirus vaccine Rotateq, at $134 million.

Sales of a few newer products were up 50 percent or more. Diabetes pills Januvia and Janumet rose to $411 million and $128 million, respectively, and HIV drug Isentress posted $148 million in sales.

Merck reduced its full-year forecast including one-time charges to between $2.84 and $3.09 per share, down from the $2.95 to $3.17 forecast in January. It also reduced its expected revenue, to a range of $23.2 billion to $23.7 billion, down $500 million from its January forecast.

Merck said preparations for the Schering-Plough acquisition, set to close in the fourth quarter, are progressing as planned, with bank financing now complete.

Schering-Plough also released first-quarter earnings yesterday, and said drug sales fell but profit tripled because of a charge last year related to an acquisition.

The Kenilworth, N.J.-based maker of arthritis treatment Remicade and allergy spray Nasonex earned $767 million, or 46 cents per share. That compares with profit of $276 million, or 17 cents per share. Revenue fell 6 percent to $4.39 billion.

Excluding charges, mostly related to the 2007 buyout of Organon Biosciences, the company earned 56 cents per share, topping expectations. Analysts forecast profit of 47 cents per share. Analysts expected revenue of $4.56 billion.

Schering-Plough shares closed down 94 cents, or 4.08 percent, at $22.11 on the New York Stock Exchange.