Merck (NYSE:MRK) reported a 67% jump in first-quarter profit on Friday as tighter cost controls and strong diabetes drug sales helped offset softer sales from arthritis drug Remicade, which it now splits with Johnson & Johnson.
The No.2 U.S. drug maker earlier this month agreed to pay Johnson & Johnson (NYSE:JNJ) $500 million to settle a lengthy arbitration suit. While Merck kept exclusive marketing rights in 70% of the areas where it now sells Remicade, it increased J&J’s share of the profit to 50%
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The drug giant earned $1.74 billion during the latest quarter, or 56 cents a share, compared with a year-earlier $1.04 billion, or 34 cents.
Excluding one-time restructuring, litigation and acquisition costs, Merck earned 99 cents, beating average analyst estimates in a Thomson Reuters poll by a penny.
Revenue for the three-month period edged 1% higher to $11.73 billion, missing the Street’s view of $11.82 billion on a 31% drop in Remicade to $519 million and a 21% decrease to $336 million of hypertension treatments Cozaar/Hyzaar.
Some of those pressures were offset by an increase of 24% to $919 million of diabetes drug Januvia, as well as new pipeline drugs.
Merck backed its profit in the range of $3.75 to $3.85, excluding items, which is in line with average analyst forecasts’ of $3.80 a share.
The results follow a 10% profit jump by Bristol-Myers Squibb (NYSE:BMY) Thursday despite facing softer sales of blood pressure treatment Avapro, which marked the start to a series of its blockbuster drugs set to lose U.S. patent protection this year.