Merck (NYSE: MRK) posts big Q1 profit jump on lower charges

Tallahassee, FL 4/27/12 (StreetBeat) -- Drugmaker Merck & Co. (NYSE: MRK) said Friday that its first-quarter profit jumped 67 percent despite lower-than-expected sales, due to lower spending on production, marketing and research as well as an arbitration charge a year ago.

The maker of Singulair for asthma and allergies said net income was $1.74 billion, or 56 cents per share, up from $1.04 billion, or 34 cents per share, a year earlier.

Excluding one-time items, Merck would have earned $3.04 billion, or 99 cents per share, up from $2.86 billion, or 92 cents per share, in 2011's first quarter. Analysts polled by FactSet expected 98 cents.

Revenue was $11.73 billion, up 1.3 percent from $11.58 billion a year ago. Analysts expected $11.83 billion.

Merck reiterated its 2012 profit forecast, for $3.75 to $3.85 per share, excluding one-time items.

"Our performance this quarter was driven by the solid contributions across our pharmaceutical, animal health and consumer care divisions and by our ongoing efforts to operate more effectively and efficiently," Kenneth C. Frazier, Merck's CEO and chairman, said in a statement.

The company took charges totalling $1.31 billion, or 43 cents a share, for integration of acquired businesses, reduced value to some assets and accounting adjustments to inventory.

Prescription drug sales rose 3 percent to $10.08 billion, led by Singulair at $1.34 billion and jumps of about 25 percent for diabetes pills Januvia and Janumet. They brought in a total of $1.31 billion, helping make up for generic competition continuing to slash sales of former blockbusters Cozaar and Hyzaar, for high blood presure.

Merck recently got U.S. approval to sell an extended-release version of Janumet, which combines Januvia and a widely used generic pill, metformin. But Singulair, Merck's top seller, goes off patent in August, creating another drain on revenue.

Sales of veterinary medicines and vaccines jumped 8 percent to $821 million on higher sales of pet and cattle products. Sales of consumer health products, including the Coppertone sun care and Dr. Scholl's foot care lines, rose 7 percent, to $554 million.

In last year's quarter, Merck took a charge of $500 million to end arbitration with health care giant Johnson & Johnson (NYSE: JNJ) over rights to immune disorder drugs Remicade and Simponi, blockbusters with several billion dollars in annual sales.

J&J had sold them jointly with Schering-Plough Corp., but after Merck bought Schering in November 2009, J&J sought worldwide rights to their sales. Under the arbitration settlement, Merck also gave up rights to sell the drugs in Latin America, Canada and some other regions, reducing its revenue from the two injectable drugs in the quarter by 26 percent, to $519 million.

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Movers: ECYT Gets Big Money from Merck; VRNG Has Mark Cuban as Biggest Investor

Tomahawk, WI 4/16/2012 (StreetBeat) -- Endocyte (ECYT) was up more than 100 percent on heavy volume.

Merck & Co. (MRK) has agreed to pay $120 million upfront to Endocyte Inc., with additional payouts of up to $880 million, to develop and market the experimental cancer drug vintafolide as the drug maker looks to bring more drugs to market.

Vintafolide is being evaluated in a Phase 3 clinical trial for ovarian cancer and a Phase 2 trial for non-small cell lung cancer.

Vringo (VRNG) was up 31 percent on heavy volume

Billionaire investor Mark Cuban has taken a major stake in a small video-ringtone maker with annual revenue of less than $1 million, a disclosure that comes a day after he made an investment in another applications maker.

The 7.4% stake in Vringo Inc. makes Cuban the company’s largest shareholder, according to data from FactSet Research. Hedge fund Iroquois Capital LP has the second-biggest stake in Vringo at 6.4%.

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Endocyte (Nasaq: ECYT) shares soar on ovarian drug partnership with Merck (NYSE: MRK)

Shawshank, VA 4/16/12 (StreetBeat) -- Merck, known as MSD outside the United States and Canada, (NYSE: MRK) and Endocyte Inc. (NASDAQ: ECYT), today announced that they have entered into an agreement to develop and commercialize Endocyte's novel investigational therapeutic candidate vintafolide (EC145). Vintafolide is currently being evaluated in a Phase III clinical trial for platinum-resistantovarian cancer, (PROCEED trial) and a Phase II trial for non-small cell lung cancer (NSCLC); both studies are also using Endocyte's investigational companion diagnostic agent, etarfolatide (EC20).

"Vintafolide is a promising and innovative late-stage cancer drug candidate. In addition to pursuing the lead indication of platinum-resistant ovarian cancer, Merck plans to further evaluate its potential for treatment of multiple other cancer types," said Peter S. Kim, executive vice president and president Merck Research Laboratories. "This agreement underscores our strategy of building a portfolio of oncology therapeutics that employ a companion diagnostic to facilitate selection of those patients most likely to respond to treatment."

Under the agreement, Merck, through a subsidiary, will gain worldwide rights to develop and commercialize vintafolide. Endocyte will receive a $120 million upfront payment and is eligible for milestone payments of up to $880 million based on the successful achievement of development, regulatory and commercialization goals for vintafolide for a total of six cancer indications. In addition, if vintafolide receives regulatory approval, Endocyte will receive an equal share of the profit in the United States (U.S.) as well as a double digit percentage royalty on sales of the product in the rest of the world. Endocyte has retained the right to co-promote vintafolide with Merck in the U.S. and Merck has the exclusive right to promote vintafolide in the rest of world. Endocyte will be responsible for the majority of funding and completion of the PROCEED trial. Merck will be responsible for all other development activities and costs and have all decision rights for vintafolide. Endocyte remains responsible for the development, manufacture and commercialization worldwide of etarfolatide, a non-invasive companion diagnostic imaging agent that is used to identify folate receptor positive tumor cells.

"Following a rigorous selection process we believe Merck represents the ideal strategic partner to achieve the full potential of vintafolide, accelerating our development in numerous cancers,” said Ron Ellis, Endocyte’s president and chief executive officer. "The agreement also positions us well to build our own commercial infrastructure for vintafolide in the U.S. and for etarfolatide worldwide."

Endocyte has completed three single arm studies of vintafolide in patients with advanced platinum resistant ovarian cancer, non-small cell lung cancer and solid tumors. In a randomized Phase II clinical trial (PRECEDENT) comparing vintafolide plus pegylated liposomal doxorubicin (PLD) versus PLD alone in women with platinum-resistant ovarian cancer, vintafolide demonstrated a statistically significant delay in disease progression or death in the overall population, with the largest improvement observed in patients with all tumors imaged as positive for folate receptor expression utilizing etarfolatide. Vintafolide in combination showed limited additional toxicity versus standard therapy with PLD alone. Common adverse events observed with this combination were neutropenia, fatigue, mouth sores, and redness/swelling/pain on the hands and feet.

In March 2012, Endocyte announced that the European Union had granted orphan drug status to vintafolide, and that the company planned to file a marketing authorization application in the third quarter of 2012.

Closing of the transaction is contingent upon obtaining Hart-Scott Rodino clearance from the Federal Trade Commission.

Please contact www.thestreetbeat.com for interest in our latest investor relations platform the “CEO Interview Series” with its host Steve Kanaval. The package includes a one-on-one interview with a seasoned industry professional; published segment to our web site with embedded audio/video file; and a compressed file that can be easily e-mailed out to your current and/or potential investors. Please e-mail bflautt@gmail.com or call (662) 392-0740 for pricing and scheduling.

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SAP Target SuccessFactors To Buy Jobs2web For $110M

Palm Beach, FL 12/6/11 (StreetBeat) --Cloud-based business software company SuccessFactors (NYSE:SFSF), which yesterday said it had agreed to be acquired by SAP (NYSE:SAP), announced its own acquisition today.

SuccessFactors has agreed to acquire marketing recruiting platform Jobs2web for $110 million in cash.

Jobs2web uses an applicant tracking system to attract candidates through social networks, which can save companies time and money.

SuccessFactors noted that Jobs2web’s roster of customers includes 3M (NYSE:MMM), Merck (NYSE:MRK), PepsiCo (NYSE:PEP) and others.

SucccessFactors said it will combine its social, mobile and collaborative recruiting management solution with Jobs2web’s recruiting marketing platform to create a transformational social recruiting engine.

The transaction is expected to close late this year, and is not expected to have a material impact on SuccessFactor’s fourth quarter or 2011 results.

Following a rally yesterday, SuccessFactor shares are looking as though they will pare their gains today.

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LargeCap Stocks to Watch Today

CVS said fourth-quarter income from continuing operations fell about 2% to $1.03 billion, or 75 cents a share, from $1.05 billion, or 74 cents a share, a year earlier. Earnings from continuing operations on an adjusted basis were 80 cents a share. Net revenue for the quarter fell 4.1% to $24.8 billion, down from $25.8 billion a year ago. Same-store sales increased 1.7% year over year. Wall Street was calling for earnings of 79 cents a share on revenue of $24.95 billion. Shares of CVS fell 1.6% to $34.10 in early trading Thursday.

BJ's Wholesale Club said Thursday it is exploring and evaluating strategic alternatives, including a possible sale of the retailer. Shares of BJ's surged 12.5% to $48.40 in premarket trading Thursday.

Merck posted a fourth-quarter loss of $531 million, or 17 cents a share, a reversal from year-earlier net income of $6.49 billion, or $2.35 a share. The quarter was impacted by purchase accounting adjustments, restructuring costs and merger-related costs. Excluding items, fourth-quarter earnings were 88 cents a share. Sales rose 20% to $12.09 billion from $10.09 billion the year before. Analysts, on average, were expecting earnings of 83 cents a share on revenue of $11.52 billion. Given industry pressures such as greater E.U. austerity measures and the additional impact of U.S. health care reform, and developments in its vorapaxar clinical program, the company withdrew its previous long-term target of high single-digit non-GAAP EPS compound annual growth from 2009 to 2013. Shares of the company fell 1.9% to $33.17 in premarket trading Thursday.

Dow Chemical said fourth-quarter earnings topped analysts' expectations as sales rose in emerging markets. The stock rose 2.8% to $37.65 in early trading Thursday.

Royal Dutch Shell said fourth-quarter profit skyrocketed as the oil company increased production, but stripping out items the result missed analysts' expectations. Shares of the company were unchanged at $71.18 in premarket trading.

Green Mountain Coffee Roasters blew past Wall Street's profit expectations for its fiscal first quarter. Shares of GMCR were surging 15.3% to $38.01 in premarket trading.


Santander's fourth-quarter profit tumbled 4.6%, weighed down by weak performance in Europe. The stock was falling 2.2% to $12.26 early Thursday.

Unilever said fourth-quarter net profit rose 15% to €1.04 billion, while sales rose 12% to €10.82 billion, driven by strong volume growth in the emerging markets. The company cautioned that it was facing "intense competition and the return of commodity cost volatility." Unilever was down 0.2% to $29.89.

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