Merck revenue down 5 percent, hurt by strong dollar

On a per-share basis, the Houston-based company said it had profit of 74 cents. Sales of prescription drugs dipped 2.0 per cent in the quarter, to $US8.93 billion. Analysts’ estimates typically exclude special items. The strong U.S. dollar, which lowers the value of overseas sales made in local currencies, reduced revenue seven per cent, the company said. Merck noted that it’s already exceeded its goal of reducing annual spending by $2.5 billion, compared to its 2012 level.

-Earnings Growth (Y-o-Y): 3.8%.

-Revenue Change (Y-o-Y): -4.6%.

Analysts were watching to see whether Januvia sales have been hurt by a recent FDA safety alert about risk of joint pain for Januvia and other drugs in its category, as well as a positive study showing the heart benefits of a competing drug from Eli Lilly & Co. and Boehringer Ingelheim.

Merck CEO Ken Frazier took time on the conference call to throw shade on Valeant Pharmaceuticals VRX and other drug industry players relying on a business model of buying older drugs and jacking up their prices.

Merck believes Keytruda’s lung cancer label, which requires patients to be tested for PDL-1 expression with an approved diagnostic test, will become standard of care in cancer treatment.

Combined sales of diabetes drug Januvia and a related pill called Janumet, which have struggled to grow in the past year, jumped 10 percent to $1.58 billion in the third quarter after only a 1 percent rise in the previous period. It may be a contender in the multibillion-dollar market for very expensive pills that cure the liver-destroying virus within a few months for most patients, unlike the prior generation of year-long, side effect-laden treatments that barely cured half of patients. Merck declined to comment specifically about pricing for its hepatitis C therapy, but said it believes the product is competitive with Gilead’s Harvoni and superior to Abbvie’s Viekira Pak.

Merck raised its full-year profit forecast to a range of $US3.55 to $US3.60 per share, up from $US3.45 to $US3.55 in July, excluding one-time items. Analysts on average had expected revenue of $10.08 billion.