NEW YORK – Merck & Co. Inc. (MRK) on Thursday said it plans to seek U.S. approvals in 2007 for two new cholesterol fighters and raised by $1 billion the amount of cost savings it expects to achieve through 2010, sending shares higher.
The company, whose stock rose 2 percent, unveiled its two new cholesterol drugs at its annual meeting with industry analysts and portfolio managers at Merck headquarters in New Jersey.
It said they are among a handful of experimental drugs that will be in late-stage trials by the first quarter of 2006. Merck is counting on the medicines to help revive earnings growth after its cholesterol fighter Zocor, the company's biggest product, begins facing competition from cheaper U.S. generics in mid-2006
One of the new cholesterol drugs, MK-524A, works by a new approach to raise levels of heart-protective "HDL" cholesterol and also lowers artery-clogging fats called triglycerides, Merck said.
The other new drug, MK-524B, combines MK-524A in a single pill with Zocor, which works through the standard approach of cutting levels of "bad" LDL cholesterol.
Merck said it hopes to seek approvals for both drugs by 2007. That is about the time that Pfizer Inc. (PFE) is expected to disclose data from late-stage trials on its own experimental product that pairs its top-selling cholesterol fighter Lipitor with a new compound called torcetrapib that sharply raises levels of HDL.
Merck, which is facing lower profits due to generic competition and which is fighting thousands of lawsuits related to its withdrawn Vioxx arthritis drug, last month forecast cost savings of up to $4 billion through 2010 through elimination of 7,000 jobs and manufacturing improvements.
The company said accrued cost savings could now reach $5 billion through 2010.
To boost productivity further, Merck on Thursday followed the lead of other struggling drugmakers by announcing it will narrow its focus to nine disease areas. The pared-down approach will allow the company to use fewer sales representatives to pitch its products to specialist doctors.
The disease areas include Alzheimer's disease, atherosclerosis, cardiovascular disease, diabetes, novel vaccines, obesity, oncology, pain and sleep disorders.
The company reaffirmed it expects earnings to fall 4 percent this year and perhaps by the same magnitude in 2006, as Zocor faces competition from cheaper generics.
"Merck will remain a research-driven pharmaceutical company, but we need to change our approach to virtually every aspect of our business, and we must act with a sense of urgency," Richard Clark, the company's recently named chief executive, said in a release.
Clark, the former head of company manufacturing who was promoted in May to CEO, had provided few other specifics, until Thursday, on how he hopes to revive the company's fortunes.
During the five-hour event on Thursday, Merck officials will review the company's roster of other experimental drugs and discuss financial strategy.