Merck & Co. said today it lost $531 million in the
fourth quarter due to nearly $4 billion charges, including write-offs and
restructuring costs from its acquisition of Schering-Plough Corp. in 2009.
Almost half of the charges were to account for diminished
prospects for anti-clotting drug vorapaxar, which had been seen as a potential
blockbuster. The company announced last month it would halt late-stage testing
on the drug for safety reasons.
Merck also issued an earnings forecast for 2011 that was
lower than Wall Street expectations and withdrew its long-term forecast. It
cited pricing pressures from U.S.
health care reform and cuts in European government health programs, as well the
decision to halt the study of vorapaxar because of dangerous increased bleeding
in the brains of patients who’d had strokes.
In pre-market trading, Merck shares dropped 2.7 percent, or
92 cents, to $32.90.
The world’s second-biggest drugmaker behind Pfizer Inc. said
the fourth quarter net loss amounted to 17 cents per share. A year earlier,
Merck earned $6.49 billion, or $2.35 per share.
The restructuring and other charges amounted to $1.05 per
share, or $3.95 billion before taxes. Excluding the charges, Merck would have
made 88 cents per share.
Schering’s products helped boost revenue 20 percent, to
$12.1 billion from $10.1 billion. The results beat Wall Street forecasts.
Analysts surveyed by FactSet forecast earnings per share of
83 cents and sales of $11.55 billion.
The maker of asthma and allergy drug Singulair said it
expects 2011 earnings per share of $3.64 to $3.76, excluding about $1.50 worth
of one-time items. Analysts were looking for $3.81 a share, according to
Merck bought Schering in November 2009 for $49 billion,
gaining its strong pipeline, consumer and animal health products and a biologic
The company says it is on track to reach its target of $3.5
billion in annual savings related to the merger by the end of 2012.
Strong sales growth continued for several key drugs,
including Singulair, diabetes drugs Januvia and Janumet, HIV drug Isentress and
Remicade for rheumatoid arthritis and other immune disorders.
“These results clearly demonstrate the benefits of the
post-merger Merck with our broader product portfolio, robust late-stage
pipeline and expanded global footprint,” new CEO Kenneth Frazier said in a
Frazier, a lawyer who had headed Merck’s global pharmaceutical
business, took over Jan. 1 from Richard Clark, who is retiring but remains
chairman of the board for now.