TRENTON, N.J. – Drug maker Merck & Co. flustered analysts Tuesday afternoon by forecasting no growth in earnings per share next year, mainly due to expiration of the patent on its key ulcer drug, Prilosec.
The news sent Merck's shares down nearly 10 percent, or $6.60, to $60.39 in late-afternoon trading on the New York Stock Exchange.
"We don't take lightly the fact that we've had to make these revisions" to forecasts for both 2001 and 2002, Raymond V. Gilmartin, chairman, chief executive and president, told analysts gathered at Merck's Whitehouse Station headquarters for the company's annual year-end review.
Executives of the world's third-biggest drug company had spent much of the daylong program focusing on upbeat news, touting drugs nearly ready for market, promising ones in the pipeline and likely steady sales growth for their best-selling drugs.
Recent research shows some of those best sellers will work for additional uses, Merck officials said.
Meanwhile, an aging, increasingly unhealthy population means that over the next decade many more people will need medications to control cholesterol level or asthma and to treat arthritis and osteoporosis.
Those are all areas where the company has leading drugs.
"I do believe that we have the right strategies in place and I do believe that we have proven we have the ability to execute on the strategies," Per Wold-Olsen, Merck's president for human health products in Europe, the Middle East and Africa, said after reviewing developments with three key drugs.
Introduction of a once-a-week dose of Fosamax, Merck's pill for reversing bone-thinning osteoporosis, has increased the medicine's market share to about 30 percent, he said. Few of the 42 million people -- mostly women -- suffering from osteoporosis worldwide are being treated for the condition, which often leads to hip or spinal fractures. Another 75 million women already show signs of decreased bone mass and will need treatment soon, he said.
"We can expect treatment patterns to switch to earlier intervention" to limit damage, Wold-Olsen told the analysts.
Likewise, barely half the 185 million people worldwide with high blood pressure are under treatment, and that number should hit about 200 million By 2008. Merck's Cozaar and Hyzaar, similar hypertension drugs, now have about 35 percent of the worldwide market share.
Meanwhile, Merck plans early next year to seek federal approval to sell its popular once-a-day asthma treatment, Singulair, for seasonal hay fever, or allergic rhinitis, said Dr. Edward M. Scolnick, president of Merck Research Laboratories.
"We anticipate it will be the first oral drug for both asthma and allergic rhinitis," he said.
Approximately 70 percent of asthma patients, or 35 million people worldwide, also have allergic rhinitis, said Wold-Olsen.