Company news: Pfizer and Merck
Pfizer's second-quarter earnings report surprised analysts, with the firm beating EPS consensus by 10 cents on higher revenues and lower expenses. Revenues climbed 58% vs. the same quarter last year to $17.3 billion, with $5.4 billion (50%) reflecting the absorption of Wyeth and such legacy products as Prevnar and Enbrel. Strong sales of Pfizer legacy products—including blockbusters Lipitor, Lyrica and Celebrex—also contributed $315 million (3%) to revenues, while $584 million (5%) of revenues were due to foreign exchange. Within the vaccines franchise, the transition from Prevnar 7 to Prevnar 13 appears to be progressing well, with clinical data due by year's end that could support Pfizer's efforts to expand coverage of the pneumococcal disease vaccine to adults. The company reaffirmed earlier financial 2010 guidance but did not raise it.
Merck turned in a mixed second-quarter performance, as its takeover of Schering-Plough led to big changes on both sides of the ledger. Due to merger and restructuring costs, profits tumbled 52% to $752.4 million, from $1.56 billion a year ago, while sales almost doubled to $11.35 billion, sparked by the SP acquisition. Merck's Cozaar/Hyzaar blood-pressure franchise, now exposed to generic competition, saw combined sales fall 46% for the quarter to $485 million. The company plans to replace lost revenue with new products, including anti-clotting agent vorapaxar, which it plans to submit to the FDA later this year. Bestseller Singulair, facing patent expiry in 2012, posted flat quarterly sales of $1.26 billion, while those of anti-inflammatory Remicade, an SP legacy drug, rose 18%. Among other products, Januvia and Janumet sales rose 30% and 41%, respectively, combined sales of cholesterol drugs Vytorin and Zetia remained largely flat at $1.1 billion, and cervical-cancer vaccine Gardasil sales fell 18%.