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Biotech / Medical : Pharma News Only (pfe,mrk,wla, sgp, ahp, bmy, lly) -- Ignore unavailable to you. Want to Upgrade?

To: Anthony Wong who wrote (940)	10/16/1998 5:29:00 PM
From: Anthony Wong	Respond to of 1722

10/16 15:59 FOCUS-Merck beats Q3 forecast; analysts fret drug growth (Adds details, analysis; pvs WHITEHOUSE STATION, N.J.) By Ransdell Pierson NEW YORK, Oct 16 (Reuters) - Merck & Co. on Friday reported third-quarter profits that were slightly above Wall Street's forecasts, but industry analysts cited disappointment with sales growth of prescription drugs -- particularly four of five drugs launched this year. "It was an OK quarter, but sales growth, particularly of newer products, was not that impressive," Hambrecht & Quist drug analyst Alex Zisson said. Merck said third-quarter earnings rose 14 percent to $1.37 billion, or $1.12 a diluted share, compared with profit of $1.2 billion, or 97 cents a share, in the 1997 quarter. The results were 1 cent per share above the consensus forecast of analysts polled by First Call. Merck also inspired confidence by telling analysts it expected 1998 profits would be between $4.27 and $4.34 per share, in line with a range it gave last summer. That was seen as good news following the company's second-quarter earnings report that fell 1 cent shy of forecasts. Merck shares gained $1.94 to $135.19 in late composite New York Stock Exchange trading. Merck's sales rose 15 percent to $6.8 billion from $5.9 billion a year ago, with growth driven by established and newer drugs and the company's Merck-Medco managed care business. Sales growth was also tied to the July restructuring of Merck's joint venture with Swedish drug maker Astra AB. But the strong dollar crimped sales growth by two percentage points, the same effect as in the second quarter. Merck, based in Whitehouse Station, N.J., said the $2.6 billion sale in July of its 50 percent stake in a joint venture with DuPont produced an after-tax gain of $1.25 billion in the third quarter. It said the gain was substantially offset by charges related to the Astra-Merck restructuring. "Merck's global sales of prescription drugs rose about 13 percent in the third quarter," ABN-AMRO analyst James Keeney said. But he said most of that growth was due to a recalculation of sales after restructuring of the Astra-Merck joint venture -- from which Merck and Astra share profits on ulcer medication Prilosec/Losec -- the world's biggest-selling drug. Keeney said Merck's U.S. drug sales rose about 22 percent in the third quarter. "But if you subtract the benefit Merck got from its Astra-Merck restructuring, Merck's U.S. drug sales only went up about 12 percent," he added. By comparison, he said Pfizer Inc.'s U.S. drug sales jumped 38 percent in the third quarter, boosted by its new anti-impotence drug Viagra. Sales at Bristol-Myers Squibb Co., a more-average performer, are expected to rise 20 percent. Wall Street continues to fret over potential revenue shortfalls Merck may incur after the expiration of its U.S. patents, by 2001, on hypertension drugs Vasotec and Prinivil, ulcer drug Pepcid and anti-cholesterol drug Mevacor. Collectively, the four drugs had third-quarter sales of $1.1 billion, down from $1.3 billion in the second quarter. "Merck should be able to do well in spite of the patent expirations," said Mehta Partners analyst Sergio Traversa, basing his view on current sales trends for other drugs. Traversa said a potential boon for Merck could be Vioxx, a novel pain and arthritis drug for which the company plans to seek FDA approval later this year. It is expected to compete with Monsanto Co.'s Celebra, now awaiting approval. But even with Vioxx in the wings, Keeney and Zisson said they had growing doubts about Merck's ability to bridge the revenue gap once its patents begin expiring in 2000. They cited lackluster sales of four drugs launched this year: Propecia for hair loss, anti-platelet Aggrastat, glaucoma treatment Cosopt and migraine treatment Maxalt. Merck said global sales of Propecia were $24 million, versus $16 million in the second quarter. Aggrastat had sales of $5 million, a decline from $6 million in the second quarter. Maxalt, facing tough competition from Glaxo Wellcome Plc's line of Imitrex migraine drugs, posted sales of $15 million in the third quarter. Combined sales of Cosopt and another glaucoma drug, Trusopt, rose 14 percent to $65 million. But Singulair, approved by the FDA in February, was seen as a bright spot. It had sales of $55 million -- versus $38 million in the second quarter. <ASTRAa.ST> <DD.N> <PFE.N> <BMY.N> <MTC.N> <MRK.N> <GLXO.L>

To: Anthony Wong who wrote (940)	10/16/1998 5:36:00 PM
From: Anthony Wong	Respond to of 1722

SmithKline 3rd-Qtr Net Seen Rising 4.5%: Earnings Outlook Bloomberg News October 16, 1998, 7:01 a.m. ET Expected Earnings: SmithKline Beecham Plc, Britain's second-biggest drug company, is expected to post a 4.5 percent rise in third-quarter net income as a stronger pound and a milder flu season offset gains from new product growth, including Paxil for depression, according to a survey of seven London analysts. Net income in the third quarter is expected to have risen to 257 million pounds ($438 million), or 4.63 pence a share, from a restated 246 million pounds, or 4.5 pence a share, a year ago. The dividend is expected to be unchanged at 2.2 pence. Pretax profit is expected to be 392.9 million pounds, up from a restated 376 million. Time: London-based SmithKline is expected to report third-quarter results at 12:30 p.m. London time on Tuesday, Oct. 20. Behind the Numbers: Like all U.K. exporters, SmithKline suffers from the effects of a higher pound. The pound was trading almost 8 percent higher against a trade-weighted basket of currencies in the 1998 third quarter compared with the 1997 third quarter; that tends to make U.K. exports less competitive and reduces the sterling value of foreign-denominated earnings. SmithKline will also suffer from slower sales of antibiotics due to a milder winter flu season. However, newer products such as Paxil, Relafen for arthritis, and vaccines are all expected to grow. What Experts Say: SmithKline has promised double-digit earnings growth this year, net of exceptional items and excluding currency impact. ''We want to see just how confident SmithKline is in hitting that target,'' said Peter McDougall, head of pharmaceuticals research at Dresdner Kleinwort Benson. ''The world knows about the slowdown in the U.S. -- how much is that affecting earnings? And we want to make sure they are happy about Avandia (a diabetes treatment in development that some analysts say could be a billion-dollar drug).'' Stock Performance: SmithKline shares have risen 6 percent in the past 52 weeks, surging in February after the company announced merger talks with Glaxo Wellcome Plc but slipping since then. They were recently trading at 650p in London. Previous Market Reaction: SmithKline shares fell 27 pence to 718p on July 21 when the company reported second-quarter earnings and dashed hopes that it would revive talks to merge with Glaxo Wellcome or another drugmaker. Analysts made the following forecasts for SmithKline third- quarter earnings (all in millions of pounds except EPS, which is in pence): Broker Pretax EPS Net Rating Flemings 396 4.7p 257 hold-positive Dresdner KB 397 4.6 255 buy Lehman 398 4.6 256 neutral HSBC 376 4.5 n.a. buy Salomon SB 392 4.5 251 neutral Goldman 394 4.68 258 neutral Merrill 397 4.8 265 accumulate Average 392.9 4.63 257 3Q97 restated 376 4.5 246 (SmithKline restated 1997 earnings to comply with new tax rules on goodwill amortization.) --Dane Hamilton in the London newsroom (44-171) 330-7727/ph