Merck yesterday produced strong indications that its turnround is gathering momentum when the US drug-maker surprised investors with strong earnings growth and an improved forecast.
Wall Street reacted positively, and Merck's shares soared 8 per cent to $52.94 in lunchtime trading. Volumes in Merck shares, a component of the Dow Jones Industrial Average, were trading at levels not seen since 2003, nearly a year before it withdrew its blockbuster painkiller Vioxx because of heart risks.
Schering-Plough, another turnround story in the US pharmaceutical industry, added to its case yesterday. Second-quarter earnings doubled on strong sales of cholesterol drugs.
Between them the companies employ 1,500 people in Ireland.
However, Merck's second-quarter performance stole the show. Strong trends for its vaccines, including Gardasil for cervical cancer, and Januvia, a new diabetes treatment, helped lift its full-year outlook for the third time in six months.
Merck expects at least 20 per cent earnings growth this year, excluding one-time items, of $3-$3.10 per share, up from $2.75-$2.85, its previously revised estimate.
Merck's second-quarter profit increased 12 per cent to $1.68 billion, or 77 cents per share. Second quarter sales, which Wall Street expected to be unchanged, rose 6 per cent to $6.1 billion compared with the quarter last year.
Vaccine sales tripled in the quarter, led by Gardasil, launched last year. The cervical cancer vaccine has become an immediate blockbuster, with $358 million sales in the quarter and more countries ready to pay for it.
Merck and Schering-Plough have a joint venture to sell Vytorin and Zetia. The blockbuster cholesterol drugs are important products for both groups. Sales of Vytorin and Zetia increased 30 per cent to $1.2 billion in the second quarter, helping to boost Schering-Plough's performance.
Schering-Plough's second-quarter profits doubled to $539 million, or 34 cents per share.
Total sales in the quarter increase 13 per cent to $3.2 billion, also aided by strong international sales of Remicade, a treatment for rheumatoid arthritis.
