Merck & Company, the second-largest drugmaker in the U.S., recently reported higher-than-anticipated sales of diabetes drugs during the first quarter, as companies like Takeda Pharmaceutical continue to face Actos lawsuits.
According to Bloomberg, Merck's net income rose 67 percent from the previous year, while revenue increased 1.3 percent. The Whitehouse Station, New Jersey-based company was boosted significantly by higher sales of its Januvia and Janumet diabetes medications. Analysts believe Merck's drugs in development will be key to its turnaround.
"Merck is emerging from a challenging 2011," Tony Butler, an analyst with Barclays Capital Inc., said in a research report. "The stock has been on a path of recovery since last November, but this has been more correlated with the dividend increase and flow into the pharma sector as a whole than a restoration of sentiment around Merck’s innovation core."
In terms of its diabetes drug market specifically, Merck saw sales of Januvia rise 24 percent during the first quarter, while Janumet revenue climbed 29 percent. Januvia's sales sit at $919 million while Janumet's are $392 million, according to Bloomberg.
Merck's diabetes drugs are trending in the opposite direction of Japan-based Takeda Pharmaceutical's Actos, a treatment for type 2 diabetes. Actos, which was once seen as a safer alternative to GlaxoSmithKline's Avandia due to the latter's association with heart disease, has been linked in various studies to an increased risk of bladder cancer.
As a result of this association, both the U.S. Food and Drug Administration and the European Medicines Agency (EMA) called for Actos warnings to be updated. The medication has since been suspended in France and heavily restricted in Germany, while doctors all over are beginning to scale back their prescriptions of the drug.
With the link to bladder cancer, Actos has taken a significant sales hit, which has negatively impacted Takeda's finances. The company, which has announced a significant number of job cuts, also recently failed to win approval for a new diabetes drug from the FDA, according to multiple reports.
In addition to bladder cancer, Actos has also been linked to macular edema, an eye disease counted as one of the leading causes of blindness among working adults.