WHAT TO WATCH FOR: The world's second-biggest drugmaker by revenue, thanks to its acquisition of
Its top seller,
Two smaller sellers, baldness treatment
Given that, Kenneth Frazier, who was promoted to CEO on Jan. 1, will talk about Merck's plans to increase both revenue and profit. He may give an update on ongoing cost-cutting and will discuss plans to launch the new skin cancer drug, the status of a few drugs likely to be approved this year and the latest news on other experimental drugs in the pipeline, such as anacetrapib for
Two weeks ago, the company got U.S. approval for a new drug for melanoma, the most deadly skin cancer. Sylatron is approved for use as an additional therapy soon after tumor-removal surgery in patients whose melanoma has only spread to nearby lymph nodes. Merck says it's the first additional, or adjuvant, therapy for melanoma approved in this country in 15 years.
On Wednesday, a
Whitehouse Station, N.J.-based Merck also is awaiting approval from the Food and Drug Administration for a new pill to treat two disorders that often go together, Type 2
An FDA decision is expected in the second half of the year on an extended-release version of Janumet, which combines Januvia with a more widely used generic diabetes drug,
Meanwhile, Merck removed one big cloud with an April 15 agreement with Johnson & Johnson to end two years of arbitration over billions in annual revenue from two biotech drugs for immune disorders, Remicade and Simponi. Under the settlement, Merck will give J&J a one-time $500 million payment and more of the revenue, but it averted the possibility arbitrators would give it all to J&J. Merck kept rights to sell the drugs in Europe, Russia and Turkey, splitting those profits 50-50 with J&J.
Merck announced two smaller deals this month. It will buy
Wednesday the company's board approved a $5 billion increase in its share repurchase plan, raising the total authorization to up to $6.4 billion.
WHY IT MATTERS: Like most major drugmakers, Merck is dealing with looming generic competition from key drugs, demands for lower prices from U.S. and European government health programs, the weak global economy and the many uninsured patients.
So Merck bought Schering-Plough in November 2009 for nearly $50 billion to diversify and boost profit in the near term by slashing jobs. The deal brought Schering-Plough's experimental drugs, biotech business, consumer health products including Coppertone and Schering's animal health business, Intervet.
But last month, snags forced Merck to abandon a year-old plan to combine Intervet with
Overall, Credit Suisse analyst Catherine Arnold sees "superior growth with a multifaceted pipeline" at Merck, compared to its peers. She wrote investors recently that longer-term savings from the Schering-Plough acquisition have a good chance of being even higher then Merck predicted. "We also believe that a dividend increase is likely" with the J&J arbitration settled, she added.
WHAT'S EXPECTED: Analysts surveyed by FactSet forecast earnings per share of 84 cents and sales of $11.38 billion.