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Executive Summary

Warner-Lambert worldwide pharmaceutical sales climbed 17% to$376 mil. in the second quarter, led by the cholesterol-lowering agent Lopid. The company attributed Lopid's strength to growing "recognition in the medical community of the drug's proven ability to reduce the risk of coronary heart disease." To increase physician awareness of Lopid for that indication, Warner-Lambert initiated a new promotional effort this year focusing on gemfibrozil's effect on high-density lipoproteins. The campaign, backed by a 35% increase in Lopid's ad/promo budget, uses data from the Helsinki Heart Study on how raising HDL can reduce the risks of heart attacks. The company also began a major U.S. multicenter cholesterol intervention trial with Lopid in heart patients during the second quarter. The study is examining the value of diet, exercise and Lopid therapy alone and in combination. Parke-Davis also began a multicenter intervention study in non-insulin-dependent diabetes patients to measure the effect of Lopid on high triglyceride levels. Warner-Lambert says the study is the first to look at the issue of lipid regulation in diabetic populations. Warner-Lambert spent $85.9 mil. on R&D in the second quarter, an increase of 21.2% over the same period last year. Warner-Lambert is spending 20% more for R&D this year than last, with a budget outlay of $167.2 mil. through six months. Other drugs pacing the segment's quarterly sales were the anticonvulsant Dilantin (phenytoin) and the anti-arrhythmic Procan SR (sustained-release procainamide), Warner-Lambert noted. Earnings were up 19.7% in the second quarter to $134.5 mil. and are ahead 19.4% to $254.8 mil. year-to-date. Warner-Lambert Chairman and CEO Joseph Williams noted that the gain in net income so far "makes it clear" that the company will surpass its predictions for a 16% increase in earnings-per-share for 1990. Corporate revenues advanced to $1.2 bil. and $2.3 bil. in the quarter and the half, gains of 12.7% and 10.3%, respectively. Williams said the increases came both from domestic and international operations and were spread among all segments. Listerine, Benadryl, Rolaids and Halls led worldwide sales for the OTC drugs segment up 14% to $360 mil. in the quarter. Revenues in the gums & mints segment grew 7% to $278 mil. Meanwhile, Merck's Lopid competitor Mevacor continues to dominate the U.S. cholesterol-regulator market with a share that now has exceeded 60%, Merck said. Mevacor (lovastatin) has been prescribed for more than 1.4 mil. patients. Sales for the quarter jumped 19.2% to $1.9 bil. and net income increased by nearly as much, up 18.6% to $470.2 mil. Through six months of 1990, Merck revenues have risen 15.9% to$3.7 bil. and earnings are ahead 18.6% to $874 mil. For the 12 months, earnings have surged 20.4% to $1.6 bil. on a 14.5% rise in sales to $7.1 bil. First half sales growth was led by "newer products," Merck Chairman Roy Vagelos commented. "Both our domestic and international operations reported solid unit volume gains," he said, and "exchange had essentially no effect on sales for the first half." The U.S. generated 45% of first half sales, or about $1.6 bil., compared to 47% for the comparable period a year ago, or about $1.5 bil., Vagelos noted. He attributed the solid gains in income in the first half to "strong unit volume gains, better product mix, and the continuation of cost controls and productivity improvements." Other catalysts for growth were "strong sales" from the ACE inhibitor Vasotec (enalapril), overseas revenues by the second generation HMG-CoA reductase inhibitor Zocor (simvastatin), the H[2]-receptor antagonist Pepcid (famotidine), the new acid pump inhibitor Losec (omeprazole), Merck's second ACE inhibitor Prinivil (lisinopril) and the broad spectrum animal antiparasitic ivermectin.

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