April 27, 2012 / 2:52 PM / 6 years ago

Merck profit beats forecast, revenue lags

(Reuters) - Merck & Co (MRK.N) reported quarterly earnings slightly above Wall Street forecasts, helped by cost controls, but revenue trailed expectations on generic competition and reduced revenue from alliances with other drugmakers.

A view of the Merck & Co. campus in Linden, New Jersey March 9, 2009, after Merck & Co Inc said it would acquire Schering-Plough Corp in $41.1 billion deal, widening Merck's pipeline and diversifying its portfolio of medicines. REUTERS/Jeff Zelevansky

The No. 2 U.S. drugmaker on Friday reported net income attributable to Merck of $1.74 billion, or 56 cents per share, for the first quarter. That compared with $1.04 billion, or 34 cents per share, a year earlier.

Excluding special items, the company earned 99 cents a share. Analysts, on average, had expected 98 cents, according to Thomson Reuters I/B/E/S.

Merck said global revenue rose 1 percent to $11.73 billion, compared with Wall Street expectations of $11.82 billion.

Sales of the asthma treatment Singulair, whose U.S. patent lapses in August, edged 1 percent higher to $1.34 billion. That marks a slowdown for Merck’s biggest product, whose sales jumped 8 percent in the prior quarter.

Sales of Merck’s Januvia diabetes medicine rose 24 percent to $919 million, while a related treatment called Janumet jumped 29 percent to $392 million.

The Januvia diabetes franchise has become Merck’s biggest growth engine, and its biggest hope of offsetting looming declines of Singulair.

HIV treatment Isentress, whose sales rose 15 percent to $337 million, slightly lagged analyst estimates, as did sales of arthritis treatment Remicade. Its sales plunged 31 percent to $519 million, following arbitration that assigned rival drugmaker Johnson & Johnson a wider sales territory for the costly injectable drug.

Merck acquired Remicade in 2009 through its acquisition of Schering Plough, which had sold it for years under an arrangement with J&J.

Cozaar, a blood pressure drug now facing cheaper generics, also dampened results, with sales falling 21 percent to $336 million.

Sales of Gardasil, a vaccine to prevent cervical cancer, jumped 33 percent to $284 million, helped by its introduction in Japan and increased vaccination of males aged 9 through 26. With vaccinations, boys are less likely to become infected with the human papillomavirus and sexually transmit it to others.

Animal health products were a bright spot in the earnings report, growing 8 percent to $821 million. Consumer healthcare products also helped offset the tepid growth of Merck’s prescription drugs, growing 7 percent to $554 million.

Reporting By Ransdell Pierson in New York; Editing by John Picinich

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