Healthcare Update
April 15-21
Drug Manufacturers & Big Pharmaceuticals
Merck & Co. (MRK)
 Merck announced 12 percent growth in first-quarter earnings for 2007 on Thursday, citing
higher sales of its asthma, allergy and cholesterol drugs. Net income was $1.7 billion or 78
cents per share up from $1.52 billion during 1Q of 2006. Merck’s EPS for the first quarter
would have been 84 cents a share due to costs of $186 million for its ongoing global
restructuring program. The company also announced that the number of personal lawsuits
over Vioxx declined by 150, which is the first time since the filing of such lawsuits that the
number against the company had declined.
Schering-Plough Corp. (SGP)
 On Thursday Schering-Plough announced a 55 percent rise in 2007 first quarter earnings, which
exceeded analyst predictions. The significant increase in earning was attributed to sharp
increases in sales of its prescription drugs, including two, Vytorin and Zetia, used to treat high
cholesterol that the company sells in partnership with Merck & Co. Profit increased to $543
million, or 36 cents per share, from $350 million, or 24 cents per share, from the first quarter of
2006. Excluding a $96 million payment for licensing fees, the New Jersey-based company
earned 42 cents per share; analysts had originally predicted 29 cents per share.
Biotechnology
Gilead Sciences (GILD)
 Gilead Sciences announced on Thursday that is has promising data from its Phase III study of
inhaled antibiotic aztreonam lysise that would be used to treat cystic fibrosis. The studies
showed that the 246 patients with a deadly condition called P. aeruginosa using Gilead’s drug
for 28 days saw improvements in pulmonary function, respiratory symptoms and were able to
go for longer period of time without inhaled or intravenous antibiotics. P. aeruginosa is the
leading cause of sickness and death in people who suffer from CF.
 On Wednesday April 18, Gilead announced that its first-quarter profit rose 55%, citing
increased demand for its drug used to treat HIV. Analysts also noted that Gilead’s position in
the HIV drug market is unlikely to change any time soon. Net income rose to $407.4 million,
or 85 cents per share, from $262.7 million or 55 cents per share a year earlier. The company
expects drug sales of approximately $3.4-$3.5 billion according to Gilead’s COO and CFO.
Generic Drug Producers
Teva Pharmaceuticals Industries Ltd (TEVA)
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According to recent reports on Thursday, generic drug producer Teva Pharmaceuticals could be
out of the running to purchase Merck KgaA’s generic drug business. Teva had originally
considered acquiring the generic unit of the German based pharmaceutical and biotech
company as a way to enhance its generic drug offerings. However the current bid by India’s
Torrent Pharmaceuticals Ltd. are approaching $6 billion, a considerable premium at the original
valuation of $3.5-4 billion.
In recent Phase II studies concerning Teva’s drug Copaxone, an already-approved drug to treat
multiple sclerosis, higher doses (40 mg) of Copaxone revealed a 38% reduction in inflammatory
disease activity in comparison to the standard 20mg dose.
Hospitals
Universal Health Services Inc, (UHS)
 On Tuesday, Universal Health Services agreed to buy Foundations Behavioral Health.
Financial terms of the deal were not disclosed. Following the completion of the sale,
Foundations will become part of UHS’s network of behavioral health-care centers. Currently,
UHS operates more than 140 such centers across the country.
 Earlier that week, UHS announced that former Pennsylvania U.S. Sen. Rick Santorum has
joined the company's board of directors.
Medical Instruments & Supplies
Baxter Inc. (BAX)
 On Thursday, Baxter International announced better than expected earnings of 61 cents per
share, beating the company’s expected profit of 54 to 55 cents per share. Baxter cited strong
sales of vaccines and treatments for hemophilia and immunodeficienes as the key driver to their
increased profit during the first quarter of 2007. Net income grew 43 percent to $403 million,
up from $282 million during the first quarter of 2006. In response to the news, shares rose by
1.5% to close at $55.68.
Sources Cited
www.wsj.com
http://www.forbes.com/feeds/ap/2007/04/17/ap3620028.html
http://www.globes.co.il/serveen/globes/docview.asp?did=1000202979&fid=942
http://www.reuters.com/article/hotStocksNews/idUSWNAS679520070419
http://www.upi.com/Health_Business/Briefing/2007/04/19/gileads_antibiotic_promising_for_cf/
http://today.reuters.com/news/articleinvesting.aspx?type=marketsNews&storyID=2007-0418T224628Z_01_N18292136_RTRIDST_0_GILEAD-RESULTS-UPDATE-3.XML
http://biz.yahoo.com/ap/070419/earns_baxter.html?.v=3
http://www.forbes.com/feeds/ap/2007/04/19/ap3631046.html
http://biz.yahoo.com/bizj/070417/1448259.html?.v=1