Merck Tells Securities Analysts Growth To Remain Competitive With Leading Pharmaceutical Companies
Reveals New Investigational Medicine
Wednesday December 3, 3:27 pm Eastern Time
Company Press Release
WHITEHOUSE STATION, N.J.--(BUSINESS WIRE)--Dec. 3, 1997-- Raymond V. Gilmartin, Chairman, President and CEO of Merck & Co., Inc., today told more than 200 securities analysts that the Company is confident it will maintain growth rates competitive with leading pharmaceutical companies through the period of patent expirations (2000-2002) and despite increasing competition. The Company also revealed a new product candidate, a so-called Substance P antagonist, for the treatment of neuropsychiatric disease.
''We have succeeded in having our new products recognized as important innovations that are unique-in-class, deliver clinical outcomes that make a difference to patients and are important to physicians -- products that are recognized as delivering high medical value,'' Mr. Gilmartin said.
Mr. Gilmartin pointed out that COZAAR for hypertension, FOSAMAX for osteoporosis and CRIXIVAN for HIV infection and AIDS are among the most successful product launches ever, despite facing various marketing challenges. These recently introduced products have succeeded because each is a ''meaningful innovation'' that established a ''new standard of treatment'' in its respective field of medicine.
Mr. Gilmartin acknowledged the ongoing battle for share in the cholesterol market, but stressed that ZOCOR continues to grow strongly in an expanding market. He added that, ''ultimately, success in the cholesterol market'' will be determined by ''demonstrating long-term safety and survival benefits, where ZOCOR has the advantage.''
Since January 1995, Merck has introduced nine new products, which now account for 58 percent of the Company's growth in pharmaceutical sales -- more than $1.5 billion of revenue for the first nine months of 1997. Merck is awaiting marketing clearances on five important new products: PROPECIA for male pattern hair loss; SINGULAIR for asthma; COSOPT for glaucoma; MAXALT for migraine attacks; and AGGRASTAT for cardiovascular disorders.
Mr. Gilmartin stressed that the Company has had solid growth in all major geographic regions and that productivity gains are being invested into research and additional ''marketing muscle.'' The rates of increase in research spending in 1996 and 1997 were significantly higher than in the prior two years.
Securities analysts also heard presentations from David W. Anstice, president, Human Health - The Americas; Per Wold-Olsen, president, Human Health - Europe, Middle East & Africa; Per G. H. Lofberg, president, Merck-Medco Managed Care, Inc.; and Edward M. Scolnick, M.D., executive vice president, science and technology, and president, Merck Research Laboratories.
AGGRESSIVE MARKETING EFFORT OUTLINED FOR THE AMERICAS
Mr. Anstice told analysts that Merck's broadening portfolio of in-line, newly launched and pipeline products will enable the Company to maximize future growth opportunities. The Merck U.S. office-based sales force increased by 600 representatives in 1997 and is well prepared to support the expanding product line. Mr. Anstice highlighted the opportunity for growth that exists for many Merck products, and reviewed how each of the major products is unique in its class.
Mr. Anstice said that ZOCOR, Merck's leading cholesterol- lowering product, is the only one indicated to save lives in patients with coronary heart disease. In addition, with only nine million patients treated out of a total potential market of 26 million Americans eligible for cholesterol-lowering drug treatment under current guidelines, ZOCOR still has significant growth opportunity. ZOCOR recently received a new indication for lowering triglycerides, which many physicians regard as a risk factor for coronary disease. ZOCOR 80 mg, which cuts LDL (bad) cholesterol by 47 percent on average and has been well tolerated in clinical trials involving more than 2,000 patients, was filed in August. At the same time, the Company also filed for a labeling change to specify 20 mg as the usual starting dose. Thus the usual dosage range, currently 10-40 mg, is expected to increase to 20-80 mg, making it even easier for physicians to achieve treatment goals with ZOCOR. In late 1996, the Company filed for a labeling change describing the benefits of ZOCOR in reducing the risk of cerebrovascular events, including stroke, in patients with coronary disease.
The results of AFCAPS, a 5-year study in more than 6,000 people free of coronary disease with average LDL cholesterol and low HDL (good) cholesterol, were presented at the American Heart Association meeting last month. In the study, MEVACOR reduced the risk of first heart attacks and other coronary events by 36 percent. Because many of the AFCAPS patients fell outside the current guidelines, it has been estimated that millions more could benefit from treatment. The Company will file for new indications for MEVACOR based on the AFCAPS results in the first half of 1998.
To meet increasing competition against its major product franchises, Mr. Anstice said the Company is employing targeted strategies, will maintain strong promotional support and will continue to build on successful managed care partnerships in 1998. The rapid adoption of COZAAR and HYZAAR by patients and physicians underscores the products' tolerability, safety and efficacy and sets a high hurdle for any new competitor in the class. He explained that although treatment rates in osteoporosis have increased since 5mg FOSAMAX was introduced earlier this year, joining the 10 mg dose introduced in late 1995, the vast majority of women with osteoporosis remain untreated. This represents significant market opportunity. The Company plans to seek an indication for FOSAMAX to treat and prevent steroid-induced osteoporosis in men and women. CRIXIVAN is a key part of combination therapy for durable suppression of HIV and has proven, unsurpassed efficacy in all stages of HIV disease.
Mr. Anstice went on to say that the five new products, which the Company expects to launch in 1998, enter markets with significant undertreatment, and that each brings a unique advantage to the market.
GROWTH IN EUROPE LEADS INDUSTRY
Mr. Wold-Olsen said Merck grew 16 percent in Europe through the first nine months of 1997 -- leading the pharmaceutical industry overall and outpacing market growth by nearly a factor of three. He added that successful European-wide launches of COZAAR/HYZAAR, FOSAMAX, CRIXIVAN and TRUSOPT; strong growth of existing products such as ZOCOR; the Company's professional, focused sales and marketing efforts; and sustained focus on influencing the external environment have contributed to Merck's maintaining the competitive advantage.
Over the last two years, Merck has increased its market share from 4.4 percent to 5.4 percent. This demonstrates, Mr. Wold-Olsen said, that the Company's strategy is clearly paying off and that there is still considerable opportunity for continued revenue growth in Europe, especially in light of upcoming product introductions.
Mr. Wold-Olsen said that although government emphasis in recent years has been on cost containment above all else, he said, the question really should be: how can governments use resources efficiently and ensure that they have obtained the most value for their money? The current debate over parallel trade and the incompatibility of the free movement of goods and national price controls for pharmaceuticals, sparked in part by last year's European Court of Justice ruling in Merck v. Primecrown, should be seen in this light. Next week's Round Table in Frankfurt, convened by Commissioner Martin Bangemann, will bring together Member States and Commission officials, along with industry CEOs, to address these issues. It is encouraging, Mr. Wold-Olsen said, that there appears to be a growing political will to find solutions to the many barriers still in the way of a true competition-based Single Market for pharmaceuticals.
MERCK-MEDCO ACHIEVES TOP-LINE AND MARKET SHARE GROWTH
Reviewing Merck-Medco Managed Care's accomplishments in 1997, Mr. Lofberg emphasized that Merck-Medco continued its record of strong growth. He pointed out that in 1997 Merck- Medco's managed-drug spending on behalf of its clients will total $12 billion, up 30 percent over 1996. In addition, he said, Merck-Medco managed 291 million prescriptions on behalf of its clients in 1997, up 24 percent over 1996. The number of Americans covered by Merck-Medco increased 5 percent to 51.5 million.
Mr. Lofberg said Merck-Medco's growth was fueled by major new accounts gained in all market segments -- employers, managed care organizations, Blue Cross Blue Shield plans and government clients. He added that in nearly every instance, Merck-Medco's new accounts had previously been served by other pharmacy benefit managers.
Mr. Lofberg said clients increasingly recognize that Merck- Medco's health management programs can improve the quality of health care for high-risk patients and contribute to lower overall health care costs. He reported that major employers, Blue Cross Blue Shield groups, and government health plans have purchased Merck-Medco health management programs for diabetes, congestive heart failure, high cholesterol, hypertension, smoking cessation, gastrointestinal diseases and asthma.
PROMISING RESEARCH PIPELINE INCLUDES NEW CANDIDATE
Dr. Scolnick said that, in addition to the nine new medicines that the Company has introduced since January 1995 and the five medicines awaiting marketing clearance, Merck Research Laboratories has a full and promising pipeline. He revealed a promising new product candidate, MK-869, currently in phase II (early) clinical trials for the treatment of depression and other neuropsychiatric diseases. The once-a-day, oral compound has a novel mechanism of action, and in early trials demonstrated excellent antidepressant and anti-anxiety activity. In the trials it has shown excellent clinical tolerability and efficacy compared with a selective serotonin re-uptake inhibitor (SSRI) from the leading class of antidepressants.
Dr. Scolnick discussed the phase III (advanced) clinical trials of VIOXX (MK-966), Merck's highly selective COX-II inhibitor for inflammatory diseases including osteoarthritis. The Company expects to begin filing applications worldwide for approval in late 1998. He said that additional studies are ongoing or planned for the treatment of rheumatoid arthritis, treatment and prevention of Alzheimer's disease, and prevention of colonic polyps/cancer.
Other products in development include MK-991, a once-a-day intravenous antifungal compound, MK-826, a long-acting antibiotic of the carbapenem class, and MK-677, Merck's once-a-day oral growth hormone secretagogue for growth hormone-deficient children.
In addition to internal research and development, Merck has focused for the past three years on increasing external innovation through licensing agreements, research collaborations and acquiring new technologies and processes. Dr. Scolnick discussed a significant collaborative research, development and license agreement with Biogen, Inc., which was disclosed earlier today by Biogen. The agreement is for the first clinical development of a new class of compounds, called VLA-4 inhibitors, that have shown promise in pre-clinical studies against inflammatory diseases, including asthma. Merck expects to begin clinical trials in the first half of 1998.
This press release contains ''forward-looking statements'' as that term is defined in the Private Securities Litigation Reform Act of 1995. The forward-looking statements are Mr. Gilmartin's statements regarding the Company's expected growth rates, and Dr. Scolnick's statements regarding product pipeline. No forward- looking statement can be guaranteed and actual results may differ materially from those projected. Additional detailed information concerning a number of factors that could cause actual results to differ materially is readily available in our most recent report on Form 10-Q for the fiscal quarter ended September 30, 1997 under ''Cautionary Factors That May Affect Future Results'' and in Exhibit 99. Copies of this Form 10-Q report are available on request directed to Merck's Office of Stockholder Services. |
