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news.Merck & Co. has reported a 34% drop in profit for the third quarter on flat sales, increasing costs and a $598 million reserve for future legal costs related to former blockbuster drug Vioxx.
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Net income for the Q3 was $940 million compared to $1.4 billion for the comparable quarter last year. Merck reported worldwide sales of $5.4 billion for the quarter, virtually unchanged from a year ago.
The company emphasized the potential of cervical cancer vaccine Gardasil and newly FDA approved Januvia as revenue generating products, as well as its restructuring program. In the third quarter Merck cut 500 jobs, bringing the total to about 3,900, and said that it remains on track to eliminate 7,000 positions by the end of 2008. The company recorded $199.6 million in costs associated with the restructuring scheme for the quarter.
Vaccine sales were $555 million for the quarter, representing strong growth of 64%. The quarterly results benefited from the launch of three new vaccines – Rotateq, Zostavax and Gardasil – and the strong performance of Proquad. Worldwide sales were also strong for asthma drug Singulair, increasing by 25% to $868 million for the third quarter.
Merck also raised its full year earnings per share guidance to $2.18 to $2.25.