Delayed Recovery

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Losing a megablockbuster to generic competition can be painful for a drugmaker. Just ask Pfizer (NYSE: PFE  ) that lost Lipitor or Bristol-Myers Squibb (NYSE: BMY  ) that lost Plavix. Revenue was down 10% and 17% in 2012, respectively.

But at least they have another potential blockbuster coming up from behind to deaden the blow.

Merck's (NYSE: MRK  ) investors? They'll have to wait.

Fourth-quarter revenue at Merck was down 4.5% as the market was flooded with copycats of the company's asthma drug Singulair. Merck's Janunvia diabetes drug franchise and its HPV vaccine Gardasil helped close the $1 billion gap, but it wasn't enough.

Merck's osteoporosis drug, odanacatib, was supposed to help get things back on track. Last year, a phase 3 trial was ended early because it was clear that the drug was working, but the company revealed today that it won't seek FDA approval for odanacatib this year as expected. The plan is to wait for an extension trial to produce longer-term data before applying next year.

In theory, the added data should make it easier to get past the FDA. And having the additional info on the label should make it easier for Merck to compete with the current osteoporosis drugs. Doctors have a lot of experience with older medications like GlaxoSmithKline and Roche's Boniva and Merck's Fosamax, which is already available as a generic, so more data can't hurt.

The delay is just another in a series of bad news for Merck. Cholesterol drug Tredaptive also had the potential to become a blockbuster, but an outcomes study revealed in December that the drug didn't decrease cardiovascular events -- heart attacks, strokes, and the like -- when added to a statin, such as Pfizer's Lipitor or AstraZeneca's Crestor.

Merck will eventually turn things around, but it isn't going to happen this year. The company is guiding for adjusted earnings of $3.60 to $3.70, well below the $3.82 that it posted in 2012. If you're going to own Merck, you'll need to do it for the long term, collecting the substantial dividend while you wait for better times.

For more info on whether this pharma giant has the stamina to keep its Bunsen burners alight, grab your copy of our brand new premium research report today. We'll walk you through both the opportunities and threats facing Merck, and the report comes with a full 12 months of updates. Claim your copy now by clicking here.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2442024, ~/Articles/ArticleHandler.aspx, 9/26/2016 5:20:21 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 days ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:00 PM
MRK $62.96 Down -0.06 -0.10%
Merck and Co. CAPS Rating: ****
AZN $33.97 Down -0.31 -0.90%
AstraZeneca CAPS Rating: ****
BMY $56.48 Up +0.06 +0.11%
Bristol-Myers Squi… CAPS Rating: ****
GSK $43.42 Down -0.16 -0.37%
GlaxoSmithKline CAPS Rating: ***
PFE $34.26 Up +0.11 +0.32%
Pfizer CAPS Rating: ****