WRAPUP 3-Pfizer, Merck results beat estimates, shares rise

* Merck Q1 EPS ex-items $0.83 vs $0.75 estimate

* Pfizer Q1 EPS ex items $0.60 vs $0.53 estimate

* Merck sees 2010 EPS $3.27-$3.41 vs $3.41 estimate

* Pfizer backs 2010 profit forecast

* Pfizer, Merck up about 2 pct
(Adds CFO, analyst quotes, merger details, updates shares)

By Ransdell Pierson and Lewis Krauskopf

NEW YORK, May 4 (BestGrowthStock) – U.S. drugmakers Pfizer Inc
(PFE.N: ) and Merck & Co Inc (MRK.N: ) posted better-than-expected
quarterly results, helped by cost savings from their respective
mega-mergers that could boost results for several more years.

The companies also stood by their long-term forecasts.
Their shares rose about 2 percent, even as the broader market
sank and Merck gave a 2010 earnings forecast that could fall
short of Wall Street’s target.

“It wasn’t a wow quarter, but the fundamentals of both
companies look reasonably attractive,” said Barclays Capital
analyst Tony Butler. He said both drugmakers may have issued
conservative forecasts for this year, due in part to
uncertainty how the dollar will affect overseas sales.

Pfizer in October paid $67 billion for Wyeth, acquiring its
biotech drugs and technology for making new biotech products.
The following month Merck bought Schering-Plough for $41
billion, gaining its promising drugs in late-stage testing.

“It looks like both companies are already getting leverage
from merger-related cost savings, and it’s going right to the
bottom line,” said Morningstar analyst Damien Conover.

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For a graphic, click on http://link.reuters.com/tuz52k

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Also on Tuesday, Teva Pharmaceutical Industries Ltd
(TEVA.O: ) (TEVA.TA: ) of Israel, the world’s biggest generic
drugmaker, said strong sales of its Copaxone multiple sclerosis
drug and U.S. sales of generic products gave it a
forecast-beating profit. [ID:nLDE6420W2]

But disappointing generic sales in Europe marred results
for Teva, whose shares fell about 2 percent.

Drugmaker results in the quarter have been pinched by the
new U.S. reform law, which requires companies to provide
heftier price rebates to patients in the government Medicaid
insurance program for the poor.

“The results for Merck and Pfizer also complete that theme
we’ve seen for other drugmakers this quarter, that largely good
results are offsetting the costs of healthcare reform,” Conover
said.

MERCK PROFIT, SALES BEAT EXPECTATIONS

Merck earned $299 million, or 9 cents per share, for the
first quarter, amid special charges and a tax expense related
to the healthcare reform law. That compared with $1.43 billion,
or 67 cents per share in the year-earlier period.

Excluding special items, Merck earned 83 cents per share.
Analysts had on average expected 75 cents per share, according
to Thomson Reuters I/B/E/S.

Merck sales more than doubled to $11.4 billion on the
strength of the Schering deal. Analysts had looked for $11.2
billion.

Sales of the Januvia diabetes franchise jumped 32 percent
to $712 million, including explosive growth outside the United
States, well ahead of the consensus estimate of $622 million of
six analysts, according to Thomson Reuters I/B/E/S.

Sales of the Singulair asthma pill rose 10 percent to $1.17
billion, just ahead of the consensus estimate.

Merck said quarterly results were helped by a $75 million
to $100 million inventory buildup of its vaccines in the United
States, and lower-than-expected research spending.

The company expects 2010 earnings of $3.27 per share to
$3.41 per share, excluding special items. Analysts were
expecting $3.41 per share. The forecast would amount to flat
earnings to a decline of 4.2 percent, largely due to plunging
sales of its Cozaar blood pressure drug that began facing
generic rivals last month.

Merck continues to target high single-digit compound annual
earnings growth for the newly combined company from 2009 to
2013, when compared with Merck’s 2009 earnings.

The company, based in Whitehouse Station, New Jersey, said
it remains on track to achieve annual cost savings of $3.5
billion from the merger in 2012.

Merck is hosting a highly anticipated meeting for analysts
next week to showcase its research pipeline for the first time
since its takeover of Schering-Plough.

PFIZER AFTER LIPITOR

Pfizer earned $2.03 billion, or 25 cents per share, in the
quarter. That compares with $2.73 billion, or 40 cents per
share, in the year-earlier period.

Excluding special items, Pfizer earned 60 cents per share.
Analysts on average had expected 53 cents per share.

Pfizer posted revenue of about $16.75 billion, a bit better
than analysts’ expectations of $16.58 billion.

Sales of its Lipitor cholesterol fighter edged 1 percent
higher to $2.76 billion, above the consensus estimate of $2.64
billion of eight analysts.

Sales of Lyrica, for neuropathic pain, rose 6 percent to
$723 million, roughly in line with the consensus estimate.

Pfizer backed its 2010 profit forecast of $2.10 per share
to $2.20 per share, excluding items, despite costs of health
reform. The forecast would amount to growth of 4 percent to 9
percent.

The New York-based drugmaker affirmed its 2012 profit
forecast of $2.25 per share to $2.35 per share, excluding
items. The outlook suggests the Wyeth merger will prevent
Pfizer earnings from plunging once Lipitor goes generic as soon
as late 2011.

“We will be growing our earnings through the expiration of
Lipitor, clearly one of the many benefits the merger is helping
us address,” Pfizer Chief Financial Officer Frank D’Amelio said
in an interview.

D’Amelio said Pfizer still aims to achieve annual cost
reductions of about $4 billion to $5 billion by the end of
2012, compared with 2008 combined costs of Pfizer and Wyeth.
(Reporting by Ransdell Pierson and Lewis Krauskopf, editing by
Dave Zimmerman and Gerald E. McCormick)

WRAPUP 3-Pfizer, Merck results beat estimates, shares rise