Merck's fourth-quarter profit fell seven percent as sales of its former best-selling drug Singulair were depressed by generic competition and the company said it would delay seeking government approval of a much-anticipated osteoporosis drug.
Merck is based in Whitehouse Station, N.J., but has a big facility in the Philadelphia suburb of West Point, Montgomery County. On Friday morning, the company released financial results for the 2012 fourth quarter and full-year.
Singulair, which is a once-per-day pill used to treat chronic asthma, brought in $5.48 billion in 2011 and followed its quarterly average of about $1.3 billion through the first half of 2012. But the patent expired in the United States on Aug. 3 and the U.S. sales fell 97 percent in the fourth quarter as cheaper generic drugs took over the market. For the full year, the worldwide Singulair sales were $3.9 billion, a 30 percent drop.
The diabetes drug Januvia is now Merck's top-selling product, with fourth-quarter sales of $1.3 billion and full-year sales of $4.09 billion.
Merck's 2012 total full-year revenue was $47.27 billion, a drop of two percent from 2011. But the company still managed to turn a full-year profit increase from $6.27 billion to $6.66 billion (six percent).
Merck had - and says it still has - high hopes for odanacatib, a medicine for osteoporosis, which is a condition where bones weaken and become brittle. A branch of the National Institutes of Health says about 40 million Americans already have osteoporosis or are candidates to get it. With the aging population, the group of potential patients could grow.
The company had hoped to submit its application to the U.S. Food and Drug Administration, with clinical trials results, in the first half of 2013. Instead, the company is continuing with an extension of the pivotal third phase of trials and won't apply to the FDA until at least 2014.
"We continue to believe in the potential of odanacatib to meet the unmet needs of patients with osteoporosis," Merck chief executive officer Ken Frazer said during a conference call with analysts.
Merck's animal health division saw its quarterly revenue rise to $898 million in the fourth quarter for a full-year figure of $3.4 billion.
With Pfizer launching its animal unit as a standalone company (Zoetis) with shares trading on the New York Stock Exchange Friday, Frazier was asked about continuing to keep its animal unit as part of the larger company.
"It is a very strong contributor to Merck overall," Frazier said. "We think it is a good fit with our other businesses."
[UPDATE: Merck's stock closed Friday at $41.83, down 3.28 percent on the New York Stock Exchange.]