Drugmakers Mostly Post Higher Profits, Muted Sales

LINDA A. JOHNSON

TRENTON, N.J. (AP) — Drugmakers on Thursday mostly posted improved third-quarter profits by keeping costs down, as generic competition, the global recession and unfavorable currency exchange rates generally hurt sales.

Merck & Co. and Bristol-Myers Squibb Co. posted strong profit increases on higher sales of a few key drugs. Switzerland's Novartis AG had a tiny increase in profit on what one analyst called "wonderful results" in its pharmaceuticals division. But Schering-Plough Corp., about to become part of Merck, saw a sharp drop in profit and a dip in revenue that it blamed on unfavorable exchange rates.

"Their quarters were, overall, better than expected," except for Novartis, said Edward Jones analyst Linda Bannister. "Most of it was driven by cost cutting, and that's the theme we've been seeing across the industry" for a while.

She said the heavy cost cutting likely spurred three of them to raise their full-year forecasts.

Bristol-Myers raised its earnings-per-share forecast by 14 cents, while Merck increased the low end of its forecast by a nickel. Novartis, noting its swine flu vaccine has been approved for sale in Europe and the U.S., said it anticipates sales of $400 million to $700 million for the shots in the fourth quarter.