Merck & Co., Inc. (MRK): New Sleeping Aid Could Be an Awakening for This Pharma Giant

Johnson & Johnson (NYSE:JNJ) recently reported vigorous sales of $17.5 billion in Q1 2013, an 8.5% increase year-over-year. The company noted Tylenol products were a “positive contributor” to results. The New Brunswick, NJ-based drug behemoth reaffirmed its full year guidance for earnings of $5.35-$5.45 a share.

Plus, J&J just announced an 8.5% increase in its quarterly dividend from $0.61 to $0.65 per share. The boost marks the 51st consecutive year of dividend increases.

From counting sheep to sound sleep

Merck & Co., Inc. (NYSE:MRK) is counting on suvorexant’s approval and for the drug to increase revenue. In one trial, patients taking suvorexant reported falling asleep 25.7 minutes faster than usual and sleeping an hour longer. Merck & Co., Inc. (NYSE:MRK)’s aim is to offer a fresh option for patients with chronic insomnia who regularly need sleeping pills. Other sleep aids on the market, like Ambien, keep patients asleep for about two-thirds of the night. Suvorexant is said to provide a longer, more natural rest.

For decades, a series of sleep drugs have focused on “shutting down the whole brain in maybe a less natural way,” said Dr. Darryle Schoepp, Merck & Co., Inc. (NYSE:MRK)’s VP of neuroscience. According to Merck & Co., Inc. (NYSE:MRK), patients who routinely need sleep aids will better tolerate suvorexant. Research shows patients taking suvorexant experienced normal sleep rhythm. Main side effects were headaches and morning drowsiness.

The U.S. market for sleep drugs was $1.85 billion in 2011, down 8% from the prior year, IMS health data shows. Although the number of prescriptions for sleep drug rose, growing generic competition attributed to the decline.

Suvorexant could wake up the slumbering industry and prove dreamy for Merck & Co., Inc. (NYSE:MRK).

The article New Sleeping Aid Could Be an Awakening for This Pharma Giant originally appeared on Fool.com and is written by Diane Alter.

Diane Alter has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Diane is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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