Merck seeks way to stem sales slide

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Merck adds heat to HCV competition
Merck adds heat to HCV competition

Merck's third-quarter earnings continued the downbeat hinted at with the October 1 announcement that it was adding 8,500 pink slips to the pile of cast-off corporate positions: sales were $11 billion for the quarter, down nearly 4% from the same period a year ago. Turbulence included a 5% fall in sales of its diabetes mediation Januvia, a 6% drop in sales of cholesterol medication Vytorin and a 53% drop in patent-free asthma medication Singulair.

Rising sales of Remicade (17%), HPV vaccine Gardasil (15%), diabetes treatment Janumet (9%) and HIV therapy Isentress (9%) added some air to top-line news.

Management emphasized, as it did earlier in the month, that the drugmaker is digging in and focusing only on areas where it can lead the pack or establish a foundation for future growth.

Diabetes remains part of these future plans. Global Human Health EVP and President Adam Schechter told investors Monday that the company is retooling its sales approach from being solely focused on maintaining market share—it holds between 70% and 75% of the US market—to growing it. The drugmaker attributed around $60 million of the Januvia drop to wholesaler de-stocking, but the company did not dismiss the fall as a cyclical event of de-stocking and re-stocking.

Januvia TRx numbers tumbled around 2% during the quarter, compared to the same period last year. Schechter said the company is retooling its sales focus to keep this trend from spreading into 2014 and the company now has sales reps focused on moving patients from sulfonylureas to Januvia. He said the company is also working to encourage patients to sidestep sulfonylureas altogether, and hop from metformin therapy to Januvia without the middle step.

Although four DPP-IV competitors tighten the market, Schechter says the real issue is “that the DPP-IV market and branded worldwide diabetic market isn't growing,” which explains the amped-up focus on lost potential sales.

The company also reinforced its message that it was open to all strategies that would further its dedication to efficiency, including contemplating making the consumer and animal health businesses independent ones if it would be an operational or an investor advantage.

Despite the financial hit that patent losses like those of Singulair, Maxalt and Propecia have inflicted on company sales, Merck said it is not worried that Remicade biosimilars will cause similar, immediate damage because they will first surface in markets that account for less than 20% of Remicade sales. He also said he sees greater sales potential in the company's biologic Simponi.

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