Merck’s Vaccine Business Hits All-Time High

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Oct. 28 (Bloomberg) –- Bloomberg’s Olivia Sterns discusses the pharmaceutical sector with Julie Hyman on Bloomberg Television's "Money Moves." (Source: Bloomberg)

Lower in concerns the future results will be lower.

Merkel lowered its profit forecast.

-- merck lowered its profit forecast.

The big problem with januvia, it treats diabetes -- it is bringing in 4 billion dollars a year.

Those sales did sharply miss forecasts.

That will send the stock down.

We spoke to tony butler, analyst at barclays.

He says this is the issue that really has shareholders concerned.

Because it is diabetes, the competition looks like it is only heating up.

There are half a dozen treatments for diabetes due to hit the market in the next few years.

What we are seeing from the big pharma companies is they are facing a lot of rising pressure.

What about some of these other drugs, specifically vaccines?

The vaccine business hit an all-time high in results today.

Vaccines are a great moneymaker for merck.

They said, we want to focus on areas where we can win.

Vaccines are a great example of that.

The vaccine for hpv, they have a near-monopoly on the market.

The other thing interesting about vaccines is that compared to pharma, economics are pretty attractive.

Patents don't expire.

They will not face generic competition.

The demand stream is pretty reliable because everyone is a candidate for a vaccine, unless you drive the disease out of existence, which has happened.

That is the hope.

You mentioned the patent cliff issue.

How bad is it in merck's case?

Really bad.

In the past two years, they have lost patents on seven drugs that were bringing in $10 billion worth of sales.

The best example is what happened to cingular.

They were making $11.5 billion a few years ago.

What is the biggest take away?

The big thing with pfizer is, will they or will they not split.

Split the company, split up the units.

They sold off the animal health business.

Thank you so much, olivia

This text has been automatically generated. It may not be 100% accurate.

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