Merck (MRK) reported its first quarter of 2012 earnings with limited fanfare and no surprise. The company is continuing to face a new chapter in its history due to expiring patents. I wanted to take a look at what is new with Merck and some of its competitors during this earnings season.
It seems, with its numerous trials, a $4.5 billion settlement, and a $950 million fine, that Merck has permanently put to bed the disaster of its “miracle” painkilling drug, Vioxx. Or, as a recent article points out, maybe things are not actually over quite yet. In any event, the entire Vioxx scenario was an utter nightmare for a company whose very business depends essentially on user and physician trust.
Revenues for the company in the first quarter of 2012 came in at $11.7 billion, a 1% gain from last year’s first quarter, and also about $100 million short of analysts’ expectations. Earnings, after allowing for one-time events, came to $3.04 billion or $0.99 per share, an 8% gain from last year, and a penny per share over expectations. The earnings growth was courtesy of firm expense control. If the one-time costs of acquisitions and restructurings had been included in the earnings number, earnings would have been $0.56 per share.
The lifeblood of any pharmaceutical company is its research pipeline. None more so than Merck, whose biggest true blockbuster, Singulair, comes off patent this year. Singulair sales, which came to $1.34 billion in the quarter, will be difficult to replace, if that revenue can be replaced all. To continue reading, click here.
