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Merck faces patent woes
February 15, 2001: 11:57 a.m. ET

Sales of several key drugs expected to plummet as generics go on market
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NEW YORK (CNNfn) - Merck & Co. Inc. warned Thursday that sales of several of its older medicines facing patent expirations are expected to fall sharply this year, but the No. 2 U.S. drugmaker reiterated Thursday that it is still on track to meet 2001 earnings projections.

The Whitehouse Station, N.J.-based company forecast that worldwide sales of hypertension treatment Vasotec, ulcer medicine Pepcid, and Mevacor, a cholesterol fighter, will drop to about $1.8 billion to $2 billion this year, down about 60 percent from a combined $3.2 billion in 2000. Vasotec's patent protection already has expired, while the patents for Pepcid and Mevacor will run out this year.

graphicMerck, the second-biggest U.S. drug company after Pfizer Inc. (PFE: Research, Estimates), said sales of newer products are expected to make up for the loss of patent exclusivity on other medicines.

Sales of Vioxx, a potent painkiller, are expected to rise to $3 billion to $3.5 billion this year, up about 50 percent from $2.2 billion in 2000. The drug is locked in a battle for market share with rival treatment Celebrex, sold by Pharmacia Corp. (PHA: Research, Estimates) and Pfizer Inc.

Merck forecast that sales of Zocor, a cholesterol fighter, should total $5.8 billion to $6.2 billion this year, compared with $5.3 billion last year. Sales of hypertension drugs Cozaar and Hyzaar are projected to total $1.8 billion to $2 billion, up from $1.7 billion last year, while sales of asthma treatment Singulair are expected to rise to $1 billion to $1.2 billion, up from $860 million in 2000.

Boosted by the outlook for its newer products, the company said it is comfortable with 2001 earnings projections of $3.15 to $3.25 per share. Analysts polled by earnings tracker First Call Corp. have predicted the company will earn $3.22 per share for the year, up 11 percent from $2.90 last year.

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Merck (MRK: Research, Estimates) stock, a component of the Dow Jones industrial average, fell $1.98 to $77.65 in late-morning trading. Although newer drugs could alleviate the pain of medicines losing market exclusivity, Wall Street has been concerned about whether the company can maintain earnings growth in the double-digit percent range.

Merck has told analysts it believes its profit growth will be "competitive" with the other large drug companies, but some analysts worry its earnings per share growth could slip to the single digits by 2002 as its patents expire.

The company also said Thursday that research and development spending should grow about 19 percent to $2.8 billion this year, while marketing and administrative expenses would grow in low double-digit percent range. graphic

-- from staff and wire reports