30 April 2001 00:00 [Source: ICB Americas]By Carey Krause
Led by Zocor and Singulair, Merck & Co. was able to meet analysts estimates for the first quarter despite lower-than expected sales on Vioxx. Meanwhile, Merck's rival in the anti-arthritis market, Pharmacia Corp. posted strong sales, while Bristol-Myers Squibb Company and American Home Products reported only single-digit growth.
Merck posted an 11 percent increase in net income to $1.66 billion, driven by 28 percent revenue growth to $11.3 billion, which was based on a 51 percent gain at Merck-Medco, and an 8 percent gain in human health products. Revenue from the company's five key growth drivers rose 30 percent, comprising 60 percent of worldwide human health sales.
US sales were up 8 percent to $3.2 billion, modestly below analyst expectations due to slow sales for its anti-arthritis drug Vioxx. Vioxx, which accounts for 10 percent of Merck's pharma sales, posted sales of $485 million, up 26 percent. US sales came in at $350 million, compared with $570 million in the last quarter and below analyst forecasts of $610 million to $619 million. Sales were hit by an estimated $150 million destocking after a 3.9 percent price increase in November 2000 caused a fourth quarter buy-in.
Strong performers were Zocor (+31 percent to $1.5 billion), led by a 30 percent increase in the US market after adjusting for buying patterns. Zocor grew about 30 percent in unaudited markets, which represent about 20 percent of Zocor's US sales base, and which analysts cite as critical for future growth. "In 2002, Zocor will likely face increased competition as Astra Zeneca's Crestor hits the market, and hence its strong position in the non-retail markets (i.e. Department of Defense, Veterans' Administration, and the hospital market) will be increasingly important as will the new fixed combination with Schering-Plough's ezetimibe, due out in 2003, in our estimation," says Lehman Brothers' analyst Barbara Ryan. Merrill Lynch estimates peak annual sales for Zocor of $6 billion by 2005.
Singulair sales rose 76 percent to $300 million, generally ahead of analysts' estimates. Singulair, which grew 52 percent in US prescriptions, benefited from a buy-in during the quarter following a 4.9 percent price increase in March.
Merck's rival in the anti-arthritis market, Pharmacia, reported first quarter pharma sales of $3.2 billion, a 13 percent increase year-over-year. Key pharma drivers were its anti-arthritis drug Celebrex (+24 percent to $649 million) and Ambien (+114 percent to $215 million). Agricultural sales were $1.3 billion, a 1 percent decline. Earnings were $423 million, a 19 percent increase year-over-year.
Meanwhile, AHP and BMS posted only single-digit growth. AHP's net revenues rose 8 percent to $3.4 billion, and net income rose 16 percent to $733.6 million. Worldwide human pharmaceutical revenues rose 12 percent to $2.7 billion due largely to higher sales of Prevnar, Protonix, Premarin products and Effexor XR, offset in part by lower sales of Meningitec, oral contraceptives and Ziac.
BMS reported a 5 percent increase in net sales to $4.7 billion. Net earnings rose 10 percent to $1.2 million. Worldwide pharmaceutical sales increased 8 percent at $3.7 billion, with US sales up 13 percent and international sales down 4 percent. Key product drivers were the Glucophage line (+31 percent to $557 million), Plavix (+48 percent to $298 million), Avopro (+28 percent to $111 million) and Pravachol (+10 percent to $507 million). Taxol sales decreased 12 percent to $330 million due to generic competition.
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