Merck results flag, but cancer-drug deals lift shares
By Ransdell Pierson
(Reuters) - Merck & Co Inc's quarterly profit and sales just missed expectations as its medicines faced competition from cheaper generics, but shares rose 1.5 percent on enthusiasm for newly announced cancer-drug partnerships with rival U.S. companies.
For the full year, Merck expected to earn $3.35 to $3.53 per share, excluding special items. The average analyst estimate was $3.48 per share.
"Overall, I view this guidance as 'good enough,' given fairly widespread Street concerns about a 'mega-miss,'" ISI Group analyst Mark Schoenebaum said, adding that investors remain more focused on prospects for the company's array of experimental drugs.
Separately on Wednesday, Merck said it plans to test its closely followed immuno-oncology drug MK-3475 in combination with medicines being developed by Pfizer Inc, Amgen Inc, Incyte Corp.
Shares were up 1.3 percent in premarket trading on Wednesday, after closing at $53.51 Tuesday on the New York Stock Exchange.
Schoenebaum said Merck shares jumped on news of the planned new studies of MK-3475, a so-called PD-1 inhibitor that works by harnessing the immune system to find and destroy cancer cells.
Industry analysts believe the medicine, if approved, could generate annual sales of billions of dollars and greatly improve treatment of melanoma and potentially other cancers.
The second-biggest U.S. drugmaker said on Wednesday it earned $781 million, or 26 cents per share, in the fourth quarter. That compared with $908 million, or 30 cents per share, in the year-earlier period. Continued...