For drugmakers, higher profits but muted sales

Merck & Co. and BristolMyers Squibb Co. posted strong profit increases on higher sales of a few key drugs. Switzerland’s Novartis AG had a tiny increase in profit on what one analyst called “wonderful results’’ in its pharmaceuticals division. But Schering-Plough Corp., about to become part of Merck, saw a sharp drop in profit and a dip in revenue because more than half of its sales are in foreign countries - so the weak dollar reduces their value.

The companies said little, or nothing, about prospects for the recession ending, yet some raised their forecasts for the full year, indicating some optimism. BristolMyers raised its earnings-per-share forecast by 14 cents, while Merck hiked the low end of its forecast by a nickel.

Novartis, noting its swine flu vaccine has been approved for sale in Europe and the United States, said its sales should grow at a high-single-digit rate. That’s without anticipated sales of $400 million to $700 million for swine flu shots in the fourth quarter.

Whitehouse Station, N.J.-based Merck is about to leapfrog from number eight to number two in the pharmaceutical industry with its pending $41.1 billion purchase of Schering-Plough.

“We have made significant progress in our planning the past three months’’ for that, chief executive Richard Clark told analysts. “We will be ready to hit the ground running on our first day of business as the new Merck.’’

Whitehouse Station, N.J.-based Merck reported net income of $3.42 billion, inflated by a $1.7 billion after-tax gain from selling its half of the Merial animal health business so regulators will approve the Schering-Plough deal. Without that gain, profit would have been up roughly 58 percent.

Merck’s revenue rose 2 percent to $6.05 billion, on higher sales of its top seller, Singulair for asthma and allergies, plus diabetes drugs Januvia and Janumet and HIV drug Isentress.

That offset some problem areas, including a big drop in sales of Gardasil, a vaccine against a virus that causes cervical cancer and genital warts that soon will face its first US competition.

Meanwhile, sales of the cholesterol drugs Merck and Schering-Plough sell jointly, Vytorin and Zetia, dropped another 7 percent to $1.03 billion. They’ve been declining since January 2008, when reports questioning their effectiveness first appeared.

Kenilworth, N.J.-based Schering-Plough reported net income down 17 percent at $477 million, partly due to higher taxes and research spending. Excluding currency exchange rates, its revenue was up 2 percent at $4.5 billion.

The maker of allergy and hepatitis drugs and consumer health items has just launched three new products in the United States or other countries, including Saphris for schizophrenia and bipolar disorder.

New York-based Bristol-Myers had a profit of $966 million. That was down from $2.6 billion a year ago, when it had a $2 billion gain from selling a business. Without that, profit was up 64 percent.

It had sales of $5.49 billion, up nearly 5 percent. Abilify, Orencia for rheumatoid arthritis, leukemia drug Sprycel and hepatitis B drug Baraclude all had double-digit sales increases. Blood thinner Plavix, the world’s number two drug, had sales of $1.55 billion, up 8 percent, plus additional income from Bristol’s partnership with Sanofi-Aventis SA on foreign sales.

Novartis posted a profit of $2.1 billion, up 1 percent, while sales rose 3 percent to $11.1 billion. It said one-time charges offset earnings growth.