Jan 29, 2003 3 min read

By Linda A. Johnson AP Business Writer

TRENTON, N.J. – Drug maker Wyeth nearly doubled fourth-quarter profit on a huge, one-time gain that masked nearly flat income, while profits at bigger rival Merck & Co. increased 2 percent on strong sales of its mainstay drugs.

Wyeth shares jumped more than 6 percent and Merck shares rose more than 3 percent Tuesday on the news. Merck matched the consensus forecast of analysts surveyed by Thomson First Call, while Wyeth beat their target by 1 cent.

Wyeth, the Madison-based maker of Chap Stick, Advil and Robitussin cold medicines on Tuesday reported net income of $1.57 billion, or $1.18 per share, up from $822 million, or 62 cents per share a year ago.

However, fourth-quarter revenues included a gain of $1.45 billion from selling 67 million shares of Amgen stock it acquired when Amgen bought a biopharmaceutical company Wyeth had partly owned. Wyeth also recorded a one-time charge of $340.8 million for reduced value of some assets and restructuring costs, including closures of some research and manufacturing facilities and elimination of 3,150 sales and administrative jobs, or about 6 percent of its worldwide work force.

Excluding one-time items, Wyeth’s net income was $864 million, or 65 cents per share, nearly identical to 2001’s fourth-quarter results excluding one-time items.

Fourth-quarter revenues grew nearly 4 percent to $3.8 billion, despite falling sales for higher-profit drugs such as heart medicine Cordarone and the Premarin line of hormone replacement pills for menopausal women. Sales of both Premarin and Prempro have plunged since a huge study in July found higher-than-expected risks associated with Prempro.

For 2002, Wyeth reported net income of $4.5 billion, or $3.33 per share, up 94 percent from $2.3 billion, or $1.72 per share, in 2001. The 2002 results were inflated by a total gain of $4.1 billion on sales of Amgen stock, partly offset by a $1.4 billion charge related to ongoing litigation over diet drugs the company once sold.

Revenues for 2002 totaled $14.6 billion, up 4 percent from $14 billion in 2001.

Wyeth expects earnings per share of $2.40 to $2.50 for 2003, with net income down sharply in the first quarter, flat in the second and then improving.

Merck, the world’s No. 3 pharmaceutical company, reported fourth-quarter profit of $1.89 billion, or 83 cents a share, up from $1.86 billion, or 81 cents a share, a year earlier.

Revenues reached $13.92 billion, up 11 percent from $12.6 billion, as sales of Whitehouse Station-based Merck’s top five drugs rose 18 percent to $3.98 billion. Cholesterol-lowering Zocor, arthritis treatment Vioxx, Fosamax for osteoporosis, Singulair for asthma and the companion blood pressure medicines Cozaar and Hyzaar accounted for two-thirds of pharmaceutical sales, but Zocor, the number one seller, is expected to have flat sales next year because of expiring patents overseas.

Merck’s pharmacy benefit management subsidiary, Medco Health Solutions, saw fourth-quarter revenues of $8.4 billion, up 11 percent from $7.6 billion in the same period a year ago. For 2002, Medco revenues were $32.6 billion, up 14 percent from $28.7 billion in 2001.

Merck said it still expects to spin off Medco as a separate company by July.

For 2002, Merck said profits were $7.2 billion, or $3.14 a share, down 2 percent from $7.3 billion, also $3.14 cents a share, in 2001.

Sales for the year were $51.8 billion, up 9 percent from $47.7 billion.

Merck’s guidance for 2003 remains the same as given last month, with earnings per share of $3.40 to $3.47 and double-digit earnings growth for pharmaceutical products.

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On the Net: http://www.wyeth.com

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