Merck, Schering-Plough Post Profit Jumps

Diane Sullivan, attorney for Merck & Co., holds up a package of Vioxx during opening arguments in Atlantic City, N.J., in this Jan. 22, 2007 file photo. Plaintiffs Mike Humeston, of Boise, Idaho, and the estate of Brian Hermans, represented by his sister, Kathleen Messerschmidt, of Green Bay, Wis., are suing Vioxx maker Merck & Co. for heart attacks they blame on the since withdrawn painkiller. Drug developer Merck & Co. said Monday, July 23, 2007 its second-quarter profit jumped nearly 12 percent on an across-the-board rise in drug sales, and the company boosted earnings guidance for the year. However, it took another charge to cover costs of its massive Vioxx litigation. (AP Photo/Mary Godleski, file) (Mary Godleski - AP)

TRENTON, N.J. -- Pharmaceutical companies Merck & Co. and Schering-Plough Corp., partners in a lucrative cholesterol drug joint venture, posted hefty jumps in second-quarter profit Monday and handily beat analysts' expectations.

Merck, which again raised its 2007 earnings forecast, got a pat on the back from Wall Street, with its shares jumping nearly 9 percent at one point. But Schering-Plough, whose profit more than doubled, saw its initial 2 percent rise in share price fizzle and ended the day flat, leaving analysts puzzled.

"I'm not sure what's leading to the weakness" in Schering's stock, said analyst Joseph Tooley of A.G. Edwards & Sons. "It was a good quarter for them."

Likewise, he said, the trend has been positive for pharmaceutical companies reporting so far in the quarter, with the exception of Pfizer Inc., which saw profit plunge 48 percent.

"By and large, we've seen good solid performances, and certainly stronger than expected performance by Merck and Schering," Tooley said.

Whitehouse Station, N.J.-based Merck & Co. reported its profit jumped 12 percent as revenues from six new medicines and strong growth of key older ones offset losses to generic competition and another charge for its massive Vioxx litigation.

Merck shares rose $3.31, or 6.8 percent, to $52.33.

Merck earned $1.68 billion, or 77 cents per share, compared with net income of $1.5 billion, or 69 cents per share, a year earlier. Excluding a $172 million restructuring charge, net income was 82 cents a share. Revenue rose 6 percent to $6.11 billion.

Analysts polled by Thomson Financial expected a profit of 72 cents per share on revenue of $5.77 billion.

Morgan Stanley analyst Jami Rubin called it "yet another blowout quarter."

Sales of Singulair for asthma and allergies rose 15 percent to $1.1 billion, and blood pressure drugs Cozaar and Hyzaar rose 8 percent to $847 million. Osteoporosis drug Fosamax saw sales dip 4 percent to $786 million. Total vaccine sales topped $1 billion in the quarter, triple that of a year ago.

Sales of Zetia and Vytorin, the cholesterol drugs it markets with Schering-Plough, rose 30 percent to $1.3 billion. Sales of former blockbuster cholesterol drug Zocor, which got generic competition last summer, plunged to $178 million.