Pharmaceutical leader Merck & Co second-quarter revenue rose 1.3% to $12.3 billion, beating industry forecasts as sales of its diabetes drugs Januvia and Janumet soared.
Analysts predicted tough generic competition for Merck’s asthma medicine Singulair to have a bigger impact on its financials, but a rise in sales of its vaccines, diabetes and HIV treatments proved the stronger factor.
Asthma drug Singulair generates around $5 billion per year for Merck, making it the company’s number-one drug; Q2 sales of the treatment increased 5.7% to $1.4 billion, accounting for around 12% of the company’s revenue.
Generic Cloud Looming
Next month, however, Singulair’s patent protection expires, which will see the end of its exclusive sales rights in the US. This will open the door to a range of cheaper generic treatments, which could see sales of the drug drop by more than 60%, according to analysts.
In addition, the company’s migraine drug Maxalt, worth $600 million per year in sales, is to go generic by the end of the year, followed soon after by its brain cancer treatment Temodar, which brings in $900 million annually.
Despite the generic threat overhead, strong performance of the Januvia and Janumet diabetes drugs have given cause for optimism. Sales of Januvia, the company’s fastest-growing medicine, rose 36% to $1.06 billion, with Janumet sales jumping 28% to $411 million.
Sales of Merck’s Isentress HIV drug also increased 18% to $398 million.
New Patents Pending
Merck has a number of experimental drugs in the pipeline that it hopes will replace its top sellers when they go generic. Before the end of 2013, it will seek US regulatory approval for six more drugs, including treatments for osteoporosis and insomnia.
Trials of the osteoporosis drug Odanacatib were concluded ahead of schedule, when researchers found it was much more effective than had been expected. Analysts predict it could be worth up to $2.5 billion per year.
The company’s new Suvorexant insomnia medicine is believed to create fewer side effects in patients by inhibiting the brain’s awake system instead of boosting its sleep system like existing treatments. It could bring in as much as $1 billion annually.
Key Statistics - Global Pharmaceutical Industry (source: MarketLine)
- The global pharmaceutical market is forecast to reach a value of over $980 billion by 2015 for a rise of 34% since 2010.
- The Americas represents some 45% of the global pharmaceutical market value.
- Pfizer is the number one player in the global pharmaceutical market, accounting for an over 9% share of the total value.