Merck's $3.4bn Q3 profits

Whereas Novaris has had steady Q3 profits with the aim of sending its Q4 profits soaring with their swine flu vaccine, Merck & Co. have posted a huge profit margin due to higher than average sales and the sale of a business.

With its vast range of cholesterol drugs, vaccines, asthma and allergy treatment Singulair, Merck posted a net income of $3.42 billion, triple the amount it made at the same time last year.

A large amount of that income came from the sale of half of the Merial animal health business so that regulators would approve its plan to buy New Jersey neighbor Schering-Plough Corp. That sale alone saw the company reap an impressive $1.7 billion (after tax), but even without it, profits would still have been up 58 percent from the year before.

Up the ladder

As a result of their profitable year, Merck is moving up the Pharma Power ladder from No. 8 to No. 2, especially with their pending $41 billion acquisition of Schering-Plough. Their recent fortunes now place it behind market leader, Pfizer, who themselves have had a large purchase - Wyeth for $68 billion.

Other success for Merck have been the company's new diabetes drugs, Januvia and Janumet, which brought in a combined total of $664 million. Meanwhile Singulair sales increased 5 percent to $1.1 billion. HIV drug Isentress was also up, but by a massive 84 percent to $197 million. However, sales of osteoporosis blockbuster Fosamax, which now has generic competition, fell 22 percent to $276 million.

The company is going to have to go a long way though to match Pfizer, however they are learning from the pharma giant. Like Pfizer, Merck is diversifying beyond its strength in vaccines and traditional pills. Buying Schering-Plough has given it a strong biotech operation, more veterinary medicines and a host of well-known consumer health products such as the Coppertone sun care and Dr. Scholl's foot care lines.

With such resources now behind them, they have enough to make Pfizer feel nervous about their position at the top.

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