Merck Sharp and Dohme’s ‘strong pipeline’ backs results

Merck Sharp and Dohme’s (MSD) strong product pipeline is an important reason behind its better-than-expected second quarterly results.

Net income more than doubled compared to the same period last year – up to nearly $1.5 billion (810 million pounds) this year, compared to $720 million last year.

The company cited strong sales of Zocor as a reason for its “strong” results, despite new generic competition, as well Inegy and Ezetrol. Furthermore, MSD said a strong batch of clinical trials had also helped, with an Inegy trial demonstrating that the drug is “significantly more effective” than AstraZeneca’s Crestor in reducing LDL-cholesterol.

Additionally, the company highlighted the progress made in its vaccines division, marketed through the Sanofi Pasteur MSD partnership. Rotateq, the rotavirus gastroenteritis vaccine, has now been approved for use in the EU, while a new licensing agreement for Gardasil, the cervical cancer vaccine, has been signed.

MSD’s two acquisitions, Abmaxis and GlycoFi, are described as being “potentially synergistic” with the ability to provide the company with a platform to research monoclonal antibody technology across a wide spectrum.

Richard T Clark, MSD’s chief executive officer and president, commented: “We announced two major product approvals, Gardasil and Zostavax, and presented important new clinical data on Inegy, Januvia and Zolinza that underscore the strength of our core business.”

One analyst with Morgan Stanley, Jami Rubin, explained to the Business newspaper: “The street has massively underestimated Merck’s underlying fundamental improvement.”

“Earnings expectations have steadily risen. Business trends are better. Plus, the pipeline has performed better than expected,” he added.

© Adfero Ltd