Posted At NYTimes.com
BY : The Associated Press
Merck announced plans on Thursday to cut an additional $1 billion in costs through 2010 and to focus its research on drugs for the most common diseases.
The company, which has been hurt by mounting lawsuits, decreased revenue and profit, and a depressed stock price as generic competition looms, also reaffirmed its earnings forecasts for this year and next.
The new cost cuts, to be achieved through a redesign of business operations, were disclosed at Merck's annual business briefing with analysts at its corporate headquarters in Whitehouse Station, N.J., north of here. On Nov. 28. the company announced it would eliminate 7,000 jobs and close or sell eight factories and research facilities to lower expenses by almost $4 billion.
Merck also said that the number of lawsuits filed over Vioxx, the arthritis painkiller it withdrew last year because of increased cardiac risks with long-term use, had risen to 9,200 as of Nov. 30; some could become class-action suits.
Merck has slipped from the world's third-biggest pharmaceutical company to No. 5, by revenue, and it expects a drop in the sales of its top-revenue product, the cholesterol drug Zocor, to about $2.45 billion next year, from about $4.35 billion in 2005, because of its patent expiration this coming June.
The chief executive, Richard T. Clark, said he expected revenue growth starting in 2007 and sustained revenue and profit growth beyond 2010.
Mr. Clark said the company had real opportunities because of the growing number of older and ill people, inadequate treatments for diseases including Alzheimer's and cancer, and expanding access to drugs in big developing countries like China and India. He said Merck would push for market leadership in those emerging markets and focus on nine priority disease areas.
The areas are diabetes, Alzheimer's disease, hardening of the arteries, other heart disease, novel vaccines, obesity, cancer, pain and sleep disorders.
In trading Thursday, Merck shares rose 57 cents, to $29.77.
