Merck & Co has posted strong growth in net profit with reduction in material & production cost and restructuring costs during the first quarter ended March 2011. Its net profit surged to $1,071 million from $330 million in the corresponding period of last year. The material & production cost declined by 22 per cent to $4,059 million from $5,216 million and it gain $14 million on account of the restructuring cost as against expenditure of $288 million in the last period. Even marketing and administrative expenses also declined by 2 per cent to $3,164 million from $3,222 million.
Worldwide sales were $11.6 billion for the first quarter of 2011, an increase of 1 per cent compared with $11.4 billion in the first quarter of 2010. The revenue increase largely reflects strong sales of januvia, janumet, singulair, remicade, nasonex and isentress partially offset by lower sales of Cozaar7 and Hyzaar7. In the first quarter of 2011, 18 per cent of pharmaceutical sales were from emerging markets.
Worldwide sales of Singulair (montelukast sodium), a once-a-day oral medicine indicated for the chronic treatment of asthma and the relief of symptoms of allergic rhinitis, grew 14 per cent from the first quarter of 2010 to $1.3 billion, driven by gains in the United States, emerging markets and Japan.
Global sales grew in the quarter for Remicade (infliximab), a treatment for inflammatory diseases, led by increases in gastrointestinal indications for the treatment of ulcerative colitis and Crohn's disease as well as emerging market gains.
Isentress (raltegravir), an HIV integrase inhibitor for use in combination with other antiretroviral agents for the treatment of HIV-1 infection, continued strong growth in the quarter driven by demand in the United States and Europe.
As expected, global sales of Merck's antihypertensive medicines Cozaar (losartan potassium) and Hyzaar (losartan potassium and hydrochlorothiazide) continue to decline following loss of marketing exclusivity for these products in the United States and in major European markets. Sales of Temodar (temozolomide), a treatment for certain types of brain tumours, declined due to generic competition in Europe.
"Merck's first quarter performance underscores that we are successfully delivering on our intent to grow both the top line and the bottom line," said Kenneth C. Frazier, president and chief executive officer. "Our strong results were largely driven by double-digit growth of key products combined with deliberate cost control measures across all areas of the company as we continue to create a more effective and efficient operating model.
"It is clear that Merck's business momentum is building, and we continue to demonstrate the ongoing value of the merger. We're making progress in our robust late-stage pipeline, and leveraging the benefits of our expanded pharmaceutical and vaccine, animal health and consumer portfolio."
The company updated its 2011 non-GAAP EPS target range to $3.66 to $3.76 from the previous target range of $3.64 to $3.76. The target range excludes purchase accounting adjustments, restructuring costs, merger-related expenses, the $500 million charge related to the resolution of the arbitration proceeding with Johnson & Johnson, and certain other items. The 2011 GAAP EPS target range is $2.04 to $2.39.