On Monday, earnings and a variety of news related to drug-eluting stents weren't enough to dislodge flat health indices. Excluding items, Merck ( MRK) earned 75 cents a share in the latest quarter, beating the consensus of 69 cents a share. Net income, including items, rose to $1.53 billion in the third quarter from $940.6 million in the same period a year ago. Merck lifted its 2007 profit outlook, saying it should earn $3.08 to $3.14 a share, before items are counted. Analysts are looking for $3.07, according to Thomson Financial. Shares rose $1.37, or 2.6%, to $54.49. On the other hand, Schering-Plough ( SGP) earned 28 cents a share (excluding acquisition-related items and an upfront R&D payment), on revenue of $2.8 million. Analysts surveyed by Thomson Financial were expecting 30 cents a share on revenue of $2.87 million. Shares fell $4.25, or 13%, to $28.44. Merck and Schering-Plough are both components of the Amex pharmaceutical index, which was down 2.48, or 0.7%, to 341.24. Away from earnings, stents -- the mesh tubes sometimes frosted with antibiotic coating used to prop open clogged arteries -- have seen a decline in sales, but not in clinical trials or news. First Medtronic ( MDT) received the CE mark for the commercial sale of the Endeavor Resolute Drug-Eluting Coronary Stent in Europe and plans to launch the product outside the U.S. earlier than originally projected.
Then Abbott ( ABT) announced at the Transcatheter Cardiovascular Therapeutics scientific symposium that in its SPIRIT III U.S. pivotal clinical trial its Xience V stent resulted in fewer heart attacks and instances of vessel renarrowing at one year compared to Boston Scientific's ( BSX) Taxus stent system. And Johnson & Johnson ( JNJ) said an analysis of 15-month data from the Western Denmark Heart Registry found that patients who received the its Cypher drug-eluting stent had a lower risk of blood clots and were less likely to need another procedure at the same lesion site than patients who received a Taxus stent. But, alas, Boston Scientific said Monday that nine-month data from its pivotal Taxus Atlas Small Vessel and Long Lesion studies on its drug-eluting Taxus Liberte stent system show the Taxus Liberte to significantly reduce renarrowing of arteries and maintained or improved safety outcomes compared to the first-generation Taxus Express stent, which other stents that seek to enter the market are measured against. Medtronic fell 77 cents, or 1.6%, to $46.71; Abbott rose 30 cents, or 0.6%, to $51.71, and Boston Scientific fell 22 cents, or 1.5%, to $14.20; while Johnson & Johnson was down 19 cents, or 0.3%, to $64.03. On a related note, after pulling in forecasts and giving preliminary results on Friday, Angiotech Pharmaceuticals' ( ANPI) shares were still declining after the weekend.
The company, which makes the paclitaxel coating for the Boston Scientific's drug-eluting stents, predicted adjusted earnings before interest, taxes, depreciation and amortization of $47 million to $50 million for the year, compared to the prior expectation of $85 million to $95 million. CIBC World Markets and RBC Capital Markets downgraded the stock to sector perform from sector outperform on Monday. Shares sank another 62 cents, or 12.5%, to $4.36. Elsewhere, Theravance ( THRX) announced the receipt of an approvable letter from the FDA regarding its telavacin, an injectable antibiotic for skin infections caused by bacteria. The FDA asked that the company resolve issues with good manufacturing practices compliance at a third-party manufacturer and submit revised labeling. It also requested that the company submit more clinical data or reanalyze clinical data before the drug is approved. The company and its partner, Astellas Pharma, said they expected no additional studies will be needed to respond to the letter. Theravance shares fell in premarket Monday but climbed 34 cents, or 1.5%, to $25.83 during regular trading.