Friday, October 16, 2009

Credit Suisse -- On What Next Thursday May Bring


Val Brickates Kennedy, in this morning's The Wall Street Journal, offers a rundown of what Credit Suisse analyst Catherine Arnold expects to see in the Merck and Schering third quarter earnings release next Thursday, thus:

. . . .A FactSet analyst poll has Merck posting earnings per share of 82 cents on revenue of $5.96 billion. For the 2008 quarter, Merck reported earnings per share of 51 cents, adjusted earnings of 80 cents a share and revenue of $5.9 billion.

Merck investors will be particularly keen to hear how well its cholesterol drugs Zetia and Vytorin are selling. The products, which are co-marketed through a joint venture with merger partner Schering-Plough, have endured several rough quarters due to lingering concerns about their effectiveness.

In the 2008 quarter, Vytorin and Zetia had combined sales of $1.1 billion. According to Credit Suisse, the products are expected to have combined sales of $1.01 billion for this year's quarter.


Merck watchers will also be paying attention to the sales growth of newer products that investors hope will help pick up the slack, such as the diabetes medication Januvia and asthma drug Singulair.

For the 2008 quarter, Januvia had sales of $379 million, while Singulair took in $1 billion. Credit Suisse is forecasting 2009 third quarter sales of $485 million for Januvia and $1.15 billion for Singulair. . . .

We shall see, but I expect overall quarterly sales of the cholesterol franchise (Vytorin/Zetia) to be closer to $900 million than $1.1 billion.

I'd also look for currency headwinds to have reduced international sales at Schering-Plough by about 10 percent, again this quarter -- thus, the hurricane graphic, at right.

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