Merck & Co. (MRK) and Schering-Plough Corp. (SGP) reported stronger-than-expected third quarter results on Oct. 20, with help from their joint sales of cholesterol drugs. But Merck's earnings were far weaker as the Whitehouse Station, N.J.-based company slashes costs, fights generics and deals with legal battles.
Merck posted earnings per share (EPS) of 51 cents during the quarter, including a charge for site closures and staff cuts as part of a restructuring announced in November 2005. The income excludes a reserve for its legal defense costs related to the drug Vioxx. During the third quarter of 2005 Merck had a healthier 65 cents EPS. Meanwhile Schering-Plough, of Kenilworth, N.J., said its profit surged to 19 cents per share, compared to 3 cents per share during the same quarter last year.
Merck shares gained 2.6% to settle at $45.64 -- a new 52-week high. Meanwhile, Schering-Plough rose 1.6% to $22.70 per share, not far from its 52-week high of $23.22 hit on Oct. 18.
Both companies benefited from their joint venture in cholesterol drugs. Those sales, which include the drugs Vytorin and Zetia, totaled $1.01 billion in the third quarter compared to net sales of $616 million in the comparable 2005 period.
Schering-Plough Chief Executive Fred Hassan called the cholesterol franchise "pivotal" to his company's success. "We are pleased that sales of our cholesterol joint venture have continued to grow this year, even with the U.S. introduction of new generic statins," said Hassan. Vytorin competes against Crestor, Lipitor and Zocor.
Merck also owns Zocor, which achieved worldwide sales of $371 million in the third quarter, representing a decrease of 65% over the third quarter of 2005. Merck's U.S. marketing exclusivity for Zocor expired on June 23, 2006.
"Given the results of the quarter, we remain on track to meet the goals we set for ourselves with our new business strategy," Richard T. Clark, Merck’s chief executive and president, said in a press release.