Merck income drops 51% in Q2, despite strong CV drug sales

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Merck has reported a 51 percent reduction in its net income for the second quarter of 2010, which ended June 30, due to internal expenses.

The Whitehouse Station, N.J.-based company reported its GAAP (generally accepted accounting principles) net income dropped 51 percent to $780.2 million in the 2010 second quarter, compared with $1.5 billion in the prior year’s second quarter.

Yet, Merck saw an increase of sales of 92 percent (with the inclusion of products from Schering-Plough), recording $11.35 billion in the 2010 second quarter, compared with $5.9 billion in the 2009 second quarter.

For its new cardiovascular product line, the 2010 second quarter sales for ezetimibe (Zetia), ezetimibe/simvastatin (Vytorin) and eptifibatide (Integrilin) all saw major increases compared with the 2009 second quarter—$564 million versus $1 million, $490 million versus $21 million and $70 million versus zero, respectively.

Its diabetes and obesity unit also posted increased profits, with sitagliptin (Januvia) recording a jump of $138 million and metformin/sitagliptin (Janumet) experienced an increase of $63 million over the 2009 second quarter.

However, for its mature product line, the blood pressure drug losartan (Cozaar, Hyzaar) and cholesteroal drug simvastatin (Zocor) saw a drop in profits--$485 million versus $906 million and $117 million versus $141 million, respectively.

The company reported increased restructuring costs of $526.3 million in the 2010 second quarter, compared with $37.4 million in the second quarter of 2009. Also adversely affecting income, other quarter-over-quarter expenses jumped, such as an 85 percent increase in marketing and administrative costs and a 54 percent increase in research and development costs.

"Our strong bottom-line performance in the second quarter demonstrates Merck's continued success in executing our post-merger strategy," said Richard T. Clark, Merck’s chairman and CEO. "We're now halfway through our first full year as a combined company. Already we're seeing positive signs of what can be achieved – despite patent expiries and a challenging economy.”