Merck's Singulair allergic rhinitis indication will help accelerate growth for the asthma drug in 2003, despite the onset of OTC Claritin , Investor Relations Senior Director Mark Stejbach told investors on a Dec. 5 conference call.

"There's probably still a lot unknown in terms of how that marketplace will play out with generic Claritin, etcetera," he acknowledged. "But at this point for Singulair, we are forecasting a big increase."

Singulair worldwide net sales in 2003 could be up more than 40% over 2002, Merck suggested. The company is forecasting a sales range of $2 bil. to $2.3 bil. in 2003 versus an expected $1.4 bil. to $1.6 bil. this year.

"Perhaps given the uncertainly of antihistamines, it's a good time to be launching a product [that] is really a brand new mechanism, [the] first breakthrough, I think, in 10 years or more in terms of how allergies can be treated," Stejbach maintained.

Merck plans to treat the allergic rhinitis approval as a new launch rather than a supplemental indication, he said. Merck filed the sNDA for Singulair (montelukast) in the first quarter of 2002. The drug has been approved for asthma since February 1998.

Given that Singulair is "broadly available" and "well positioned" with specialists, primary care physicians and pediatricians, "you don't have the same hurdles, if you will, with a new mechanism/new product launch," he noted.

"This product is safe enough, it's been approved in children as young as 12 months, it's well accepted by the same prescribing groups we'll be now going after, and we're already in the marketplace."

Merck's forecast for Singulair comes despite Schering-Plough's planned launch of OTC Claritin in mid-December. Claritin was cleared by FDA for OTC allergy use Nov. 27 (¹ Also see "Schering OTC Claritin Will Launch In December Without Rx Transition Period" - Pink Sheet, 2 December, 2002., p. 7).

Despite the likelihood of managed care taking a second look at formulary status for all Rx antihistamines, Merck appears confident that Singulair's position with payors will remain stable. Singulair has the "broadest availability of any Merck products. I think it's on 99% of the managed care lives," Stejbach said.

Merck is counting on Singulair to lead growth for its core pharma business, especially in light of expected flat sales in 2003 for the cholesterol agent Zocor (simvastatin) and COX-2 inhibitor Vioxx (rofecoxib).

Zocor sales are expected to range between $5.6 bil. and $5.9 bil. in 2003, virtually unchanged from 2002 expectations of $5.6 bil. to $5.8 bil.

Merck is awaiting FDA approval to include the Heart Protection Study in labeling; clearance could come in 2003. The 20,000-patient study showed a one-third reduction in the risk of heart attack and stroke.

Vioxx share "has stabilized in the U.S.," Stejbach said, with a sales forecast of $2.6 bil. to $2.8 bil. for 2002, identical to Merck's 2003 expectations.

Vioxx appears not to have benefited from the VIGOR gastrointestinal safety label change; positive GI safety data was added to Vioxx label, but was balanced by a precaution about an increased risk of cardiovascular events (² Also see "Vioxx Label Balances CV Risk With GI Safety: Can Merck Reverse Damage?" - Pink Sheet, 15 April, 2002., p. 20).

Merck's antihypertensive combo Cozaar / Hyzaar and the osteoporosis agent Fosamax , however, are both expected to see significant sales increases in 2003.

Cozaar/Hyzaar sales will reach $2.4 bil.-$2.6 bil. in 2003 (versus $2.1 bil.-$2.3 bil. in 2002), while Fosamax, boosted by the once-weekly formula, will increase to $2.6 bil. to $2.8 bil. next year (compared to $2 bil. to $2.2 bil. in 2002), Merck predicted.

In a break from tradition, Merck issued the guidance ahead of its Dec. 10 annual business review. Last year's surprise announcement of flat 2002 earnings per share appears to have stayed with investors; news of the Dec. 5 conference call sent the stock down 8% before Merck reaffirmed guidance in a press release.

Merck expects net earnings per share of $3.40 to $3.47, a low double-digit increase over 2002. Earnings per share is expected to be flat at $3.14 for 2002.

The guidance includes a mid-single digit percentage rate decline in products supplied to AstraZeneca, notably the proton pump inhibitors Prilosec and Nexium . Merck is forecasting Prilosec generics in the second quarter of 2003; Schwarz is expected to launch generic omeprazole by the end of year after FDA approval Nov. 1 (³ Also see "Schwarz Generic Prilosec Clears FDA After Deal With Andrx, Genpharm" - Pink Sheet, 4 November, 2002., p. 3).

Singulair Allergy Approval Will Drive Sales Despite OTC Claritin, Merck Says

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