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Biotech / Medical : PFE (Pfizer) How high will it go? -- Ignore unavailable to you. Want to Upgrade?

To: Anthony Wong who wrote (6088)	10/17/1998 10:45:00 AM
From: BigKNY3	Read Replies (1) \| Respond to of 9523

Merck 3Q -2: Observers Await Vioxx Launch >MRK MTC 10/16/98 Dow Jones News Service There has been strength in sales of several of Merck's longer-running products. World-wide sales of Fosamax, used to treat and prevent postmenopausal osteoporosis, rose 39% in the third quarter to $195 million. Crixivan, a protease inhibitor used to treat HIV infection, garnered sales of $155 million, up 17% from a year earlier. And sales of anti-hypertensive agents Cozaar and Hyzaar rose 54% to $275 million. Sales of Crixivan, Cozaar and Hyzaar were stronger internationally than in the U.S. But the strength in these drug sales may not be enough to maintain the overall sales growth rate at Merck, industry observers said. "I just don't see where they're well positioned for next year," said ABN AMRO Inc. analyst James Keeney, who rates the stock a hold. "We see the growth decelerating in advance of the generic (drug competition) problem" that will emerge in the year 2000, he added. Keeney is so concerned about the growth at Merck going forward that he cut his 1999 earnings estimate for the company to $4.85 a share from $4.95. His estimate for 1998 is $4.29 a share. While total third-quarter sales at Merck rose 15% to $6.83 billion from a year-earlier, total U.S. and foreign sales rose 13% to $3.9 billion, the company said. What helped lift U.S. and foreign product sales in the quarter was growth in the Merck-Medco Managed Care business and the effect of a restructuring of the Astra Merck Inc. joint venture. The 13% growth rate includes a 10 percentage point benefit related to the Astra Merck restructuring. Excluding that benefit and contributions from the Merck-Medco business, total U.S. and foreign sales growth was in the single digits, Keeney said. So what will propel increased growth at Merck going forward? Analysts said they will be looking to Vioxx, a treatment for arthritis expected to be filed with the Food and Drug Administration for approval later this year. "Increasingly, the hopes are going to be riding on Vioxx as the other new launches disappoint," Hambrecht & Quist's Zisson said. Vioxx, he said, has the potential to be a billion dollar drug. If accepted for review, Vioxx would go head to head with Celebra, Monsanto Co.'s (MTC) agent. Celebra is already under expedited review by the FDA. It was recently renamed Celebrex to prevent confusion with a similarly named anti-depressant on the market. Monsanto has a partnership with Pfizer to commercialize the agent. One advantage Merck's product would have over Celebrex is that Vioxx only has to be taken once a day whereas Celebrex is taken twice a day, Zisson said. Analysts expect Vioxx will likely be launched in mid-1999. But even if it takes off in sales, Keeney said, it won't make a substantial contribution to earnings until the year 2000.