Merck & Co., Inc. Tumbles on Worries About Osteoporosis Drug
Published: Feb 01, 2013
Merck & Co Inc's quarterly results beat estimates, but the company issued a cautious 2013 profit forecast and said it would delay seeking approval for a high-profile osteoporosis drug, sending its shares lower in premarket trading. Merck said it would not submit its osteoporosis treatment odanacatib to U.S. regulators until next year. Jefferies analyst Jeffrey Holford said the delay "will disappoint many investors," and hurt shares today. "We continue to believe in potential of this drug, and look forward to filing it in 2014," Chief Executive Officer Kenneth Frazier said in a conference call with industry analysts who expressed concern about the delay. Shares slumped 2.7 percent in premarket trading Friday after closing at $43.25 on Thursday. Merck research chief Peter Kim told analysts he had seen complete data from a big late-stage trial of the novel drug. But he said the company would delay the marketing application in order to submit data from an "extension" trial, or a followup observation of patients who had completed the study. Merck executives did not cite any specific safety or effectiveness issues relating to the medicine. The No. 2 U.S. drugmaker earned $1.4 billion, or 46 cents per share, in the fourth quarter. That compared with $1.51 billion, or 49 cents per share, a year earlier, when it took charges for acquisition and restructuring expenses. Excluding special items, Merck earned 83 cents per share. Analysts, on average, expected 81 cents, according to Thomson Reuters I/B/E/S. Global company sales fell 5 percent to $11.74 billion, hurt by generic competition for its Singulair asthma drug, but still beat analysts' estimated sales of $11.48 billion. The company forecast 2013 earnings of $3.60 to $3.70 per share, excluding special items. The midpoint of that range is below analysts' estimate of $3.68 per share. The company earned $3.82 per share in 2012.