• October 26, 2007

Merck & Co., the third-largest U.S. drug maker, reported a 63% increase in earnings after Januvia, a new pill for diabetes, and Singulair, its asthma and allegeric rhinitis drug, drove sales higher.

Competition from generics and the withdrawal of the pain pill Vioxx in 2004 over heart risks have pulled net income down 39% since 2001. However, sales of Gardasil, a cervical cancer shot, and other vaccines more than doubled. The company's sales grew 12% to $6.07 billion.

Net income increased to $1.53 billion from $941 million a year earlier. Excluding acquisition and restructuring costs, the Whitehouse Station, N.J., company earned 75 cents a share.

Meanwhile, the third-quarter profit of German pharmaceutical and chemical company Merck KGaA declined 75% on writedowns related to its purchase of Swiss biotech firm Serono.

The company, whose products include cancer drug Erbitux and multiple sclerosis treatment Rebif, earned $51.6 million in the July-September period. The company's operating profit rose nearly 56 percent to $415.5 million. The company's sales rose 5% to $2.38 billion. Its liquid crystals operation, which makes the crystals used in computer displays, saw sales rise 15% to $339.25 million.

The company's pharmaceuticals continued to show strong gains, with sales of Rebif--part of the drug development pipeline acquired in the Serono deal--up 4.1%. Sales of Erbitux, which it licensed from ImClone Systems Inc., were up 36% in the quarter.

Merck of Germany is the oldest drug company in the world, and has been separate from the U.S.-based Merck & Co. since the end of World War I.

--Tanya Irwin