Big pharmaceutical companies spend tons of money keeping their pipelines full and even more money producing and marketing a drug in hopes it becomes a pharma blockbuster.
Merck & Co. (MRK), the world's second-largest pharmaceutical company, is doing the right thing — making drugs that people need now, and it shows in the results. The company reported revenue of $11.58 billion for the first quarter of 2011, up slightly from $11.42 billion during the same period for 2010.
Earnings per share came to 92 cents during the period compared with 83 cents a year earlier, outpacing analysts' expectations, all thanks to impressive demand for its products. Sales of the company's diabetes drug Januvia jumped 45 percent to $739 million, while Janumet, which accompanies Januvia for diabetes treatment, climbed 52 percent to $305 million.
Sales of Merck's star product, asthma treatment Singulair, rose by 14 percent to $1.33 billion, good news considering it will face generic competition in the United States soon. Sales of arthritis treatment Remicade rose 12 percent to $753 million.
"Merck's first-quarter performance underscores that we are successfully delivering on our intent to grow both the top line and the bottom line," Kenneth C. Frazier, president and chief executive officer, says in an earnings statement.
"Our strong results were largely driven by double-digit growth of key products combined with deliberate cost-control measures across all areas of the company as we continue to create a more effective and efficient operating model."
Aiming high on guidance
Looking forward to the rest of 2011, Merck has lifted its non-GAAP EPS target range to between $3.66 and $3.76 from a previous target range of between $3.64 and $3.76, essentially raising the bottom estimate. The worst-case forecast just got a little brighter.
Furthermore, the company cut research- and development-spending targets.
JPMorgan raised its sales and earnings per share estimates after the first-quarter numbers, to what it called “the high end” of Merck’s guidance. The bank raised its price target to $44.
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