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Biotech / Medical : Merck -- Ignore unavailable to you. Want to Upgrade?

To: William F. Wager, Jr. who wrote (1093)	12/10/1998 5:20:00 AM
From: Anthony Wong	Read Replies (2) \| Respond to of 1580

This AP article is more positive: Merck Shares Fall on Estimates By PHIL GALEWITZ AP Business Writer WHITEHOUSE STATION, N.J. (AP) -- Shares in Merck (NYSE:MRK - news) & Co. fell 4 percent Wednesday after Merck's top official said it would fall short of 1999 earnings estimates. The stock fell even as the world's largest drug company released clinical data showing its much anticipated drug Vioxx relieves pain associated with arthritis, menstruation and surgery while significantly cutting the risk of ulcers. Shares of Merck dropped $6.75 to close at $151.93 3/4 in trading on the New York Stock Exchange. Chairman and chief executive Raymond Gilmartin told analysts at the company's annual briefing that 1999 earnings estimates of $4.85 to $4.95 a share were ''reasonable.'' A First Call survey of analysts had estimated 1999 earnings of $4.97. Analysts said, though, that the new data on Vioxx makes them more bullish on the stock, which rallied to a 52-week high late last month. ''Overall, the meeting was very positive,'' said Jeffrey Kraws, of Everen Securities. ''I was pleased to see the research dollars being spent on a broad number of products.'' Vioxx, Merck's entry in a new class of painkillers called Cox-2 inhibitors, is battling Monsanto Co. (NYSE:MTC - news)'s Celebrex, which won a partial victory last week from a federal advisory panel. The panel recommended the drug for rheumatoid and osteoarthritis, but balked at approving it for general pain relief. Merck hopes its latest clinical data gives it the evidence to obtain approval to treat a broader range of pain symptoms, which would mean giving the drug to millions more people and adding perhaps another billion dollars to annual sales. The Food and Drug Administration is expected to approve Celebrex in early 1999, at least six months ahead of Vioxx -- which applied later to the FDA. The two drugs are likely to be next year's biggest products launches because they represent the latest advance in treating pain in years. Merck also hopes to get a less cautious warning label on Vioxx compared to Celebrex, terminology which could sway more doctors to prescribe Vioxx and influence more managed care companies to more liberally cover the drug. Both drugs will have to note the ulcer risk, but the wording may differ because the risks may different. ''The label wording is critical,'' said Tony Butler, an analyst with Lehman Brothers. Health maintenance organizations have become increasingly restrictive in covering new and pricey medications, especially those providing only a marginal benefit from existing drugs. Merck hopes Vioxx and the 14 new medications it has introduced since 1995 will sustain the company's rapid sales growth as several of its major drugs lose patent protection by 2001. Those drugs include the antacid Pepsid, hypertension drug Vasotec and Prilosec for ulcers which it markets with Astra (NYSE:A - news). All told, the drugs going off patent in the next three years comprise about 25 percent of Merck's sales. Among Merck's new drugs introduced this year are Propecia for treating male baldness, Singulair for asthma and Maxalt for migraine headaches. Though analysts say new products have had marginal success, Merck executives were upbeat. Merck had $4.61 billion in profits in 1997 on $23 billion in sales. ''We believe we have everything we need to continue our success, Gilmartin said. ''We are well prepared to overcome these patent expirations.'' Merck plans to increase its research spending by 14 percent to $2.1 billion, Gilmartin said. The drug company plans to hire 700 or 15 percent more sales representatives, step-up marketing of five new drugs approved this year, expand European sales and work to get more of its drugs covered by stingy U.S. health insurers. But the key to Merck's strategy at least in short-term is tied to Vioxx. Merck's latest Vioxx studies, which evaluated a total of 1,427 osteoarthritis patients over a six-month period, showed the risk of ulcers from Vioxx was similar to that of a placebo and significantly less than the rate of ibuprofen. The data showed 4.7 percent of patients on 25 milligrams of Vioxx had ulcers, compared to 28.5 percent of patients on ibuprofen and 7.3 percent of patients on placebo. Vioxx also was shown to relieve dental pain and post-orthopedic surgery pain compared to existing prescription drugs that have the higher ulcer risk, Merck said. biz.yahoo.com