Merck
Revenue growth? Now that would pique my interest, but it didn't happen this quarter. Technically, revenue grew 92%, but that's just because the acquisition of Schering-Plough didn't occur until the fourth quarter of last year. Comparing the two companies as if they were one last year, sales actually decreased 1.6%.
The culprits were the usual suspects: Patent exclusivity was lost on blood pressure medications Cozaar and Hyzaar; HPV vaccine Gardasil dropped under competition from GlaxoSmithKline's
Merck has some drugs that are growing nicely -- the Januvia franchise and HIV treatment Isentress, in particular -- but their growth wasn't enough to counteract the problem children.
The second half of the year isn't going to get any easier for Merck. Despite the bottom-line beat, the drugmaker merely narrowed the range of its 2010 adjusted earnings guidance, lowering the top and increasing the bottom of the range.
That guidance includes issues like pricing pressure in Europe, but it doesn't factor in the potential loss of Remicade. Johnson & Johnson
Trading at about 10.5 times expected earnings for the year, Merck isn't at the oh-my-gosh-that's-cheap level. Like Pfizer