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Schering-Plough, Merck profits climb

July 24, 2007|From the Associated Press

TRENTON, N.J. — Pharmaceutical companies Merck & Co. and Schering-Plough Corp., partners in a lucrative cholesterol drug joint venture, posted hefty jumps in second-quarter profit Monday and beat analysts' expectations.

Merck, which again raised its 2007 earnings forecast, got a pat on the back from Wall Street, with its shares jumping nearly 9% at one point. But Schering-Plough, whose profit more than doubled, saw its initial 2% rise in share price fizzle and ended the day flat, puzzling analysts.

"I'm not sure what's leading to the weakness" in Schering's stock, said analyst Joseph Tooley of A.G. Edwards & Sons. "It was a good quarter for them."

Likewise, he said, the trend has been positive for other pharmaceutical companies, with the exception of Pfizer Inc., which saw profit plunge 48%.

Whitehouse Station, N.J.-based Merck & Co. reported its profit jumped 12% as revenue from six new medicines and strong growth of key older ones offset losses to generic competition and another charge for its massive Vioxx litigation.

Merck shares rose $3.31, or 6.8%, to $52.33.

Merck earned $1.68 billion, or 77 cents a share, compared with net income of $1.5 billion, or 69 cents, a year earlier. Excluding a $172-million restructuring charge, net income was 82 cents a share. Revenue rose 6% to $6.11 billion.

Analysts polled by Thomson Financial had expected a profit of 72 cents a share on revenue of $5.77 billion.

Sales of Singulair for asthma and allergies rose 15% to $1.1 billion, and blood pressure drugs Cozaar and Hyzaar rose 8% to $847 million. Osteoporosis drug Fosamax saw sales slip 4% to $786 million. Total vaccine sales topped $1 billion in the quarter, triple that of a year earlier.

Sales of Zetia and Vytorin, the cholesterol drugs Merck markets with Schering-Plough, rose 30% to $1.3 billion. Sales of cholesterol drug Zocor, which got generic competition last summer, plunged to $178 million.

At Kenilworth, N.J.-based Schering-Plough, net income jumped 118% to $517 million, or 34 cents a share, from $237 million, or 16 cents, a year earlier. Excluding charges related to a licensing payment and the planned acquisition of Organon BioSciences, the firm would have earned 41 cents a share. Sales grew 13% to $3.18 billion.

Analysts had expected a profit of 35 cents a share excluding one-time items on sales of $3.07 billion.

Schering-Plough shares slipped 19 cents to $31.30.

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