Merck & Co issues profit warning as Vioxx sales start to slow

Shares in Merck & Co decreased almost 9% to $67.80 on June 22 after thefirm issued a profit warning for full-year 2001, as a result of slower-than-expected turnover from its COX-2 inhibitor Vioxx (rofecoxib) and the impact of foreign exchange rates. As a result of these factors, Merck said that it expects earnings per share to be in the range of $3.12-$3.18, down from a previously-announced forecast of $3.15-$3.25 per share. Analysts' consensus estimates were $3.20 per share, according to data from Thomson Financial/First Call.

Merck says that sales of Vioxx in 2001 will be $3-$3.5 billion, but the firm's chief executive Raymond Gilmartin added that its four other leading products "are all on target to reach the top of their ranges." Specifically, sales of the lipid-lowerer Zocor (simvastatin) are projected to be $5.8-$6.2 billion, while Fosamax (alendronate) for osteoporosis should bring in $1.5-$1.7 billion. Sales of the hypertension treatments Cozaar (losartan) and Hyzaar (losartan/hydrochlorothiazide) are forecast to reach $1.8-$2 billion and the asthma drug Singulair (montelukast) should bring in $1-$1.2 billion.

The company noted that turnover from three drugs which will have lost US patent protection either in 2000 or this year - the cardiovascular drug Vasotec (enalapril), the lipid-lowerer Mevacor (lovastatin) and the antiulcerant Pepcid (famotidine) - willl bring in a maximum of $2 billion in total, while sales of other products, including Proscar (finasteride), Propecia (finasteride 1mg) for the treatment of male pattern baldness and the antimigraine drug Maxalt (rizatriptan) should continue to grow.