Merck & Co. agreed to buy a privately held developer of
cancer immunotherapies for at least $95 million and raised its
per-share earnings guidance for the year after reporting
better-than-expected profits for the June quarter amid lower
costs.
Sales, though, fell a worse-than-expected 11% in the second
quarter, hurt by currency changes and recent divestitures.
Merck said cCAM Biotherapeutics is a biopharmaceutical company
that has cancer treatments in early stage clinical trials. Merck
has been working on expanding its pipeline, especially as sales in
the most recent quarter were driven by the areas of oncology,
diabetes and hospital acute care.
"The acquisition of cCAM supports our objective to advance the
care of patients with cancer by stimulating tumor-directed immune
responses," said Roger M. Perlmutter, president of Merck Research
Laboratories.
Merck said its all-cash purchase of cCAM Biotherapeutics
includes the possibility of up to $510 million in future payments
based on certain milestones.
For 2015, the pharmaceutical giant now expects full-year
earnings between $3.45 and $3.55 a share, up from its previous
range of $3.35 to $3.48 a share.
Shares of Merck, down 1.7% over the past year, rose 2.9% to
$58.63 in premarket trading.
Merck, like some of its rivals, said a strengthening U.S. dollar
and increased generic competition sapped results in the most recent
period. The latest quarter saw a 7% negative impact from foreign
exchange, and a 7% impact from the divestiture of its consumer care
business.
Pharmaceuticals, the company's biggest revenue contributor,
posted a 6% decline in sales to $8.56 billion. The animal health
division recorded a 4% decline to $840 million.
Sales of arthritis drug Remicade fell 25% to $455 million, and
sales of cholesterol treatment Zetia/Vytorin slipped 16% to $955
million. However, sales of diabetes treatment Januvia edged up 1%
to $1.6 billion, and sales of Proquad improved 10% to $358
million.
In all, Merck reported earnings of $687 million, or 24 cents a
share, down from $2 billion, or 68 cents a share, a year earlier.
Excluding certain items such as acquisition-related costs,
per-share earnings grew to 86 cents from 85 cents.
Total sales fell to $9.76 billion from $10.93 billion the year
before.
Analysts had projected 81 cents a share in earnings and $9.9
billion in revenue, according to Thomson Reuters.
Write to Angela Chen at angela.chen@wsj.com
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