Merck Raises Profit Targets

Januvia, a new drug for diabetes, produced sales of $144 million for the second quarter. Janumet, which combines Januvia and the generic blood-sugar control drug metformin, added $24 million.

Among large, veteran products, the asthma drug Singulair gained 15% to $1.1 billion in sales, and revenue from the blood-pressure medications Cozaar and Hyzaar rose 8% to $847 million. The Fosamax family of osteoporosis drugs saw sales decline 4% to $786 million.

Along with raising its overall outlook, Merck lifted its full-year sales estimates for vaccines, Singulair, Cozaar/Hyzaar and the Fosamax family.

Merck said its cholesterol-drug joint venture with Schering-Plough(SGP) produced a combined 30% year-over-year sales gain to $1.3 billion. The venture sells Schering-Plough's Zetia as well as Vytorin, which combines Zetia and Merck's Zocor. Merck said Zetia's worldwide sales rose 21%, while Vytorin's sales climbed 38%.

Merck also added $210 million in reserves for its legal defense of Vioxx, which it pulled from the market in September 2004 after clinical trials showed a heightened risk of cardiovascular problems. The reserve, which doesn't cover adverse judgments, now stands at $810 million.

The company spent $137 million on Vioxx defense costs during the second quarter. Company executives told analysts they cannot predict Vioxx-related costs beyond 2008. As of June 30, Merck was a defendant in nearly 27,000 U.S. personal injury suits, as well as 266 class-action suits alleging personal injury or economic harm.

Merck's solid performance comes just a week after rival Pfizer(SGP) posted its latest disappointing quarter, as the New York drugmaker struggles with its own restructuring.

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