Merck: No Pill for A Sickly Performance

Merck missed revenue estimates but beats on bottom line. Generic drugs and patent expiries leading to Year-over-Year declines in revenues. Growth in vaccine, immunology and HIV business sales partially offset the decline from other segments

Merck and Co., Inc. (MRK), one of the largest pharmaceutical companies in the world, seems to be a little under the weather. In its earnings announcement for the third quarter of fiscal year 2013 (3QFY13), it reported a 4% drop in revenues from the comparable year-ago quarter. In the three months, it recorded revenues of $11.03 billion, which were lower than analyst estimates of $11.13 billion for the quarter. Its non-GAAP (Generally Accepted Accounting Principles) earnings also fell 3.2% year-over-year to 92 cents per share, but were better than analyst expectations of 88 cents.

Gross margins for the period fell 1.2 percentage points to 62.8% due to acquisition-related expenses and restructuring costs.

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Merck Looking to Revamp R&D Unit

Merck (MRK), the second-largest drug maker in the US based on sales, has decided to revamp its R&D unit after multiple setbacks. The company is planning to tap into research and innovation from outside its own labs and will be setting up these new centers near Boston, the San Francisco Bay area, London, and Shanghai.

Merck has failed to release a blockbuster drug in years. The last successful drugs that Merck received approval for were Januvia, a diabetes drug, and Gardasil, a vaccine for cervical cancer. This was back in 2006. On top of its stagnant drug pipeline, upcoming patent expiries of top-selling drugs like Singulair, a treatment for allergy and asthma, point towards a bleak future for the company.

To try and kick-start its stalled R&D , the drug maker is following in the footsteps of its competitors Pfizer (PFE), Johnson & Johnson (JNJ), and GlaxoSmithKline (GSK), which are already setting up innovation centers and satellite labs in a number of areas. This approach gives these companies access to research being conducted in different areas and allows them to gain a head-start on the competition.

Read More : MRK - JNJ 

Merck & Co Company Description

Merck & Co. is the third-largest pharmaceutical company in the world, according the ranking done by IMS. The company established its presence in the United States as a subsidiary of the original German company in 1891. The company operates in four operating segments namely Consumer Care, Animal Health, Pharmaceutical and Alliances. The largest segment of the company is the Pharmaceutical segment which accounted for 88% of revenues in 2012. Merck has a global presence but the majority of its revenues come from the US with Europe in second and Japan in third place. The Pharmaceutical segment produces products for many therapeutic sections which include cardiovascular, oncology HIV, respiratory etc. Read More: MRK

Merck & Co. Inc. (NYSE:MRK) To Present MK-7243 Phase III Study Findings

Merck & Co., Inc. (NYSE:MRK) announced the data for its investigational MK-7243 tablet from a Phase III clinical study involving 1,501 North American adult and pediatric patients. MK-7243 is a Timothy grass sublingual allergy immunotherapy tablet that had been accepted by the U.S. Food and Drug Administration for review Biologics License Applications alongside that of ragweed pollen sublingual allergy immunotherapy tablet. The company anticipates these reviews by the USFDA to be completed during 1H14.  To develop the sublingual allergy immunotherapy tablets, Merck had partnered with ALK-Abello.

The results for MK-7243 showed that the therapy demonstrated significant improvement in TCS (Total Combined Score), DSS (Daily Symptom Score) and DMS (Daily Medication Score) compared to placebo. Read more.

Merck & Co., Inc. : ALK-Abello Cuts Fiscal Year Guidance On Deferred Milestone Payment

The deferral of Merck's (Merck & Co., Inc.) milestone payment for its allergy immunotherapy tablet into 2014 from 2013 is largely offset by a stronger than expected improvement in ALK's underlying profitability. Hence, revenue is now expected at DKK2.2 billion-DKK2.25 billion (previously: over DKK2.3 billion) and Ebitda before special items at approximately DKK250 million (previously: DKK200 million-DKK300 million including the deferred milestone payment).

  

The simplification of the production and business structures is expected to entail full-year restructuring costs of approximately DKK20 million, DKK7 million of which have already been recognised. Read more.

Researchers Note Cautions About Geron Drug

Gary Gilliland, the former head of cancer research at Merck and the Vice President for Precision Medicine at Penn Medicine, and Alan List, the President and CEO of Moffit Cancer Center, for their thoughts on the data.

“It’s very interesting data but it’s very early, they have small numbers of patients with modest follow up,” says Gilliland. “I hate the hype that comes out around this because these patients are so desperate for treatments.”

In the exciting column: Four of 18 patients had blood test results consistent with a complete remission of disease, and one more with a partial remission and three with clinical improvement. Read more.