Drug makers post mixed results

Merck & Co.’s profit fell as generic competition eroded sales of its top-selling cholesterol pill Zocor, and Wyeth reported a fifth straight earnings increase on demand for new arthritis and pneumonia treatments.

Merck, the third-largest U.S. drug maker, said Tuesday that net income dropped 58% in the fourth quarter, partly because of costs for acquiring a gene technology that won a Nobel Prize last year. Madison, N.J.-based Wyeth reported a 17% earnings gain as sales rose for its arthritis drug Enbrel and its pneumonia vaccine Prevnar.

Wyeth is further along than Merck in recovering from setbacks for top-selling medicines. Five years after links to breast cancer and heart disease crushed demand for hormone-replacement drugs, Wyeth Chief Executive Robert Essner expanded sales of Enbrel and Prevnar to new markets. Merck CEO Richard Clark is countering the Zocor sales decline with a new type of diabetes pill and Gardasil, the first vaccine for cervical cancer.

“Patent expirations are a problem for everybody, including Merck and Wyeth,” said Les Funtleyder, an analyst with Miller Tabak & Co. in New York. “The challenge for drug companies now is replacing the lost revenue with novel new products.”

Shares of Whitehouse Station, N.J.-based Merck declined 60 cents, or 1.3%, to $44.91. Profit fell 1 cent a share short of analysts’ average estimate.

Wyeth shares dropped $1.24, or 2.5%, to $49.36. The company’s profit excluding certain costs was 66 cents a share, missing the 71-cent average of 16 analysts in a Bloomberg survey.

Merck’s net income dropped to $473.9 million, or 22 cents a share, from $1.12 billion, or 51 cents, a year earlier. Excluding acquisition and restructuring charges, profit was 50 cents a share, missing the 51-cent average estimate of 16 analysts surveyed by Bloomberg.

Zocor sales fell 65% as health insurers switched cholesterol patients to cheaper generic drugs after the patent expired June 23. The copies cost 85% less, or $15 a month, according to the BlueCross BlueShield Assn.

Earnings were reduced by a $466.2-million charge from the $1.1-billion acquisition of San Francisco-based Sirna Therapeutics Inc., the developer of a gene-silencing technology that won a Nobel Prize last year.

Wyeth reported that net income rose to $855.4 million, or 63 cents a share, from $731.7 million, or 54 cents, a year earlier.