EX-99.1 2 a13-17418_1ex99d1.htm EX-99.1

Exhibit 99.1

 

News Release

 

 

 

Media Contacts:

Kelley Dougherty

Investor Contacts:

Carol Ferguson

 

(908) 423-4291

 

(908) 423-4465

 

 

 

 

 

Steve Cragle

 

Joe Romanelli

 

(908) 423-3461

 

(908) 423-5185

 

Merck Announces Second-Quarter 2013 Financial Results

 

·                  2013 Second-Quarter Non-GAAP EPS of $0.84, Excluding Certain Items; GAAP EPS of $0.30

 

·                  Worldwide Sales were $11.0 Billion, a Decrease of 11 Percent Reflecting the Unfavorable Impact of Patent Expiries and a 3 Percent Negative Impact from Foreign Exchange Partially Offset by Global Performance of Human Health Products

 

·                  Growth in Key Franchises Including Vaccines, Diabetes and Immunology

 

·                  Continued Return of Cash to Shareholders, Including $5 Billion Accelerated Share Repurchase Announced in May

 

·                  Reaffirmed Full-Year Non-GAAP EPS Target of $3.45 to $3.55, Excluding Certain Items; Revised GAAP EPS Range to $1.84 to $2.05

 

WHITEHOUSE STATION, N.J., July 30, 2013 — Merck (NYSE: MRK), known as MSD outside the United States and Canada, today announced financial results for the second quarter of 2013.

 

$ in millions, except EPS amounts

 

Second
Quarter
2013

 

Second
Quarter
2012

 

Sales

 

$11,010

 

$12,311

 

GAAP EPS

 

0.30

 

0.58

 

Non-GAAP EPS that excludes items listed below1

 

0.84

 

1.05

 

GAAP Net Income2

 

906

 

1,793

 

Non-GAAP Net Income that excludes items listed below1,2

 

2,530

 

3,227

 

 


1                   Merck is providing certain 2013 and 2012 non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. Management believes that providing this information enhances investors’ understanding of the company’s performance. This information should be considered in addition to, but not in lieu of, information prepared in accordance with GAAP. For description of the items, see Table 2a, including the related footnotes, attached to this release.

2                   Net income attributable to Merck & Co., Inc.

 



 

Non-GAAP (generally accepted accounting principles) earnings per share (EPS) for the second quarter of $0.84 exclude acquisition-related costs, restructuring costs and certain other items.

 

A reconciliation of GAAP to non-GAAP net income and EPS is provided in the tables that follow. Year-to-date results can be found in the attached tables.

 

 

 

Second Quarter

 

$ in millions, except EPS amounts

 

2013

 

2012

 

EPS

 

 

 

 

 

GAAP EPS

 

$0.30

 

$0.58

 

Difference3

 

0.54

 

0.47

 

Non-GAAP EPS that excludes items listed below1

 

$0.84

 

$1.05

 

 

 

 

 

 

 

Net Income

 

 

 

 

 

GAAP net income2

 

$906

 

$1,793

 

Difference

 

1,624

 

1,434

 

Non-GAAP net income that excludes items listed below1,2

 

$2,530

 

$3,227

 

 

 

 

 

 

 

Decrease (Increase) in Net Income Due to Excluded Items:

 

 

 

 

 

Acquisition-related costs4

 

$1,768

 

$1,417

 

Restructuring costs

 

278

 

289

 

Other

 

(13

)

 

Net decrease (increase) in income before taxes

 

2,033

 

1,706

 

Estimated income tax (benefit) expense

 

(409

)

(272

)

Decrease (increase) in net income

 

$1,624

 

$1,434

 

 

“With seven of our top 10 products growing in the second quarter and solid performance overall, we continue to navigate significant patent expiries and adapt to the evolving global healthcare environment,” said Kenneth C. Frazier, chairman and chief executive officer, Merck. “We remain committed to pursuing innovative, best-in-class science that translates into medically important products, such as our PD-1 inhibitor for oncology.  To enable further investment in promising growth opportunities, we continue to manage costs effectively, as reflected in our results for the quarter.”

 


3                   Represents the difference between calculated GAAP EPS and calculated non-GAAP EPS, which may be different than the amount calculated by dividing the impact of the excluded items by the weighted-average shares for the period.

4                   Includes expenses for the amortization of intangible assets recognized as a result of mergers and acquisitions of $1.2 billion in both the second quarter of 2013 and the second quarter of 2012, as well as intangible asset impairment charges of $564 million and $127 million in the second quarter of 2013 and 2012, respectively. Also includes integration and other costs associated with mergers and acquisitions.

 

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Select Revenue Highlights

 

Worldwide sales were $11.0 billion for the second quarter of 2013, a decrease of 11 percent compared with the second quarter of 2012, including a 3 percent negative effect from foreign exchange.

 

The following table reflects sales of the company’s top pharmaceutical products, as well as total sales of animal health and consumer care products.

 

$ in millions

 

Second
Quarter
2013

 

Second
Quarter
2012

 

Change

 

Change
Ex-exchange

 

Total Sales

 

$11,010

 

$12,311

 

-11

%

 

-8

%

 

Pharmaceutical

 

9,310

 

10,560

 

-12

%

 

-9

%

 

JANUVIA

 

1,072

 

1,058

 

1

%

 

7

%

 

ZETIA

 

650

 

632

 

3

%

 

6

%

 

REMICADE

 

527

 

518

 

2

%

 

3

%

 

JANUMET

 

474

 

411

 

16

%

 

17

%

 

VYTORIN

 

417

 

445

 

-6

%

 

-5

%

 

ISENTRESS

 

412

 

398

 

4

%

 

5

%

 

GARDASIL

 

383

 

324

 

18

%

 

19

%

 

PROQUAD, M-M-R II and VARIVAX

 

339

 

316

 

7

%

 

7

%

 

NASONEX

 

325

 

293

 

11

%

 

13

%

 

SINGULAIR

 

281

 

1,431

 

-80

%

 

-79

%

 

Animal Health

 

851

 

865

 

-2

%

 

1

%

 

Consumer Care

 

490

 

552

 

-11

%

 

-10

%

 

Other Revenues

 

359

 

333

 

8

%

 

2

%

 

 

Pharmaceutical Revenue Performance

 

Second-quarter pharmaceutical sales declined 12 percent to $9.3 billion, including a 3 percent negative impact due to foreign exchange. Declines of SINGULAIR (montelukast sodium), MAXALT (rizatriptan benzoate), COZAAR (losartan potassium)/HYZAAR (losartan potassium/hydrochlorothiazide) and CLARINEX (desloratadine) following loss of market exclusivity were partially offset by growth of JANUVIA (sitagliptin)/JANUMET (sitagliptin/metformin HCI), GARDASIL [Human Papillomavirus Quadrivalent (Types 6, 11, 16 and 18) Vaccine, Recombinant] and SIMPONI (golimumab).

 

Sales from emerging markets increased 7 percent, including a 3 percent negative impact from foreign exchange. Emerging market sales accounted for approximately 22 percent of pharmaceutical sales in the second quarter of 2013. China continues to be a key driver of growth in the emerging markets with sales increasing 13 percent for the second quarter, including a 3 percent benefit from foreign exchange.

 

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Worldwide sales of the combined diabetes franchise of JANUVIA/JANUMET increased 5 percent to $1.5 billion in the second quarter, including a 5 percent negative impact from foreign exchange. Sales growth in all regions was partially offset by a decline in Japan due to foreign exchange.

 

Sales of ZETIA (ezetimibe) and VYTORIN (ezetimibe/simvastatin), medicines for lowering LDL cholesterol, decreased 1 percent to $1.1 billion in the second quarter, including a 2 percent negative impact from foreign exchange. The decrease reflects lower sales of VYTORIN, partially offset by growth of ZETIA mainly in the United States.

 

Combined sales of REMICADE (infliximab) and SIMPONI, treatments for inflammatory diseases, increased 9 percent, including a 2 percent negative impact from foreign exchange, to $647 million in the second quarter of 2013 primarily reflecting growth of SIMPONI in Europe. Sales of SIMPONI grew 59 percent to $120 million in the quarter.

 

ISENTRESS (raltegravir), an HIV integrase inhibitor for use in combination with other antiretroviral agents for the treatment of HIV-1 infection, grew 4 percent to $412 million in the second quarter driven by growth in the United States and Europe, partially offset by tenders in Brazil in 2012.

 

Merck’s sales of GARDASIL, a vaccine to help prevent certain diseases caused by four types of human papillomavirus (HPV), were $383 million, an increase of 18 percent for the quarter. The increase was driven by higher sales in the United States, which reflects continued strong uptake in males, as well as tenders in Latin America in 2013.

 

Worldwide sales of SINGULAIR, a once-a-day oral medicine for the chronic treatment of asthma and the relief of symptoms of allergic rhinitis, declined 80 percent to $281 million in the second quarter. The patents for SINGULAIR expired in the United States in August 2012 and expired in major European markets in February 2013. The company experienced a significant and rapid reduction in sales in the United States and is now also experiencing a substantial decline in Europe.

 

Animal Health Revenue Performance

 

Animal Health sales totaled $851 million for the second quarter of 2013, a 2 percent decline compared with the second quarter of 2012, including a 3 percent negative impact due to foreign exchange. Growth in poultry and companion animal products was partially offset by lower sales of swine products.

 

Consumer Care Revenue Performance

 

Second-quarter global sales of Consumer Care were $490 million, a decrease of 11 percent compared to the second quarter of 2012, including a 1 percent negative impact due to foreign exchange. The sales decrease resulted from the ongoing termination in China of certain

 

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Consumer Care distribution arrangements and a reversal of sales previously made to those distributors, together with associated termination costs. Excluding those actions, Consumer Care global sales would have increased by 2 percent, including the 1 percent negative impact due to foreign exchange.

 

Other Revenue Performance

 

Other revenues — primarily comprising alliance revenue, miscellaneous corporate revenues and third-party manufacturing sales — increased 8 percent to $359 million compared to the second quarter of 2012. The increase was primarily driven by higher revenue from AstraZeneca LP (AZLP) recorded by Merck, which increased 10 percent to $245 million as compared with atypically lower second quarter 2012 AZLP revenues.

 

Second-Quarter Expense and Other Information

 

The costs detailed below totaled $9.7 billion on a GAAP basis during the second quarter of 2013 and include $2.0 billion of acquisition-related costs and restructuring costs.

 

 

 

Included in expenses for the period

 

$ in millions

 

GAAP

 

Acquisition-
Related
Costs
4

 

Restructuring
Costs

 

Non-GAAP1

 

Second Quarter 2013

 

 

 

 

 

 

 

 

 

Materials and production

 

$4,284

 

$1,515

 

$93

 

$2,676

 

Marketing and administrative

 

3,140

 

19

 

16

 

3,105

 

Research and development

 

2,101

 

234

 

14

 

1,853

 

Restructuring costs

 

155

 

 

155

 

 

 

 

 

 

 

 

 

 

 

 

Second Quarter 2012

 

 

 

 

 

 

 

 

 

Materials and production

 

$4,112

 

$1,226

 

$83

 

$2,803

 

Marketing and administrative

 

3,249

 

64

 

21

 

3,164

 

Research and development

 

2,165

 

127

 

41

 

1,997

 

Restructuring costs

 

144

 

 

144

 

 

 

The gross margin was 61.1 percent for the second quarter of 2013 and 66.6 percent for the second quarter of 2012, reflecting 14.6 and 10.6 percentage point unfavorable impacts, respectively, from the acquisition-related costs and restructuring costs noted above. The gross margin decline, on a non-GAAP basis, primarily reflects the impact of the SINGULAIR patent expiries.

 

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Marketing and administrative expenses, on a non-GAAP basis, were $3.1 billion in the second quarter of 2013, a decrease from $3.2 billion in the second quarter of 2012 due to targeted reductions in spending and productivity improvements.

 

Research and development (R&D) expenses, on a non-GAAP basis, were $1.9 billion in the second quarter of 2013, a decrease from $2.0 billion in the second quarter of 2012 reflecting lower upfront payments from external licensing activity.

 

Equity income from affiliates was $116 million for the second quarter, primarily reflecting the performance of partnerships with AZLP and Sanofi Pasteur MSD.

 

Other (income) expense, net was $201 million of expense in the second quarter of 2013, compared to $103 million of expense in the second quarter of 2012.

 

The company noted the following developments:

 

·                  Presented at the American Society of Clinical Oncology in Chicago preliminary results from an ongoing Phase IB expansion study evaluating the safety and efficacy of MK-3475, Merck’s investigational antibody therapy targeting PD-1, in patients with advanced (inoperable and metastatic) melanoma.

 

·                  Announced an accelerated share repurchase agreement (ASR) to repurchase $5 billion of Merck’s common stock, which is part of Merck’s previously announced $15 billion share repurchase program. Proceeds from the company’s $6.5 billion debt offering were used to execute the ASR.

 

·                  Announced that the U.S. Food and Drug Administration (FDA) has approved LIPTRUZET (ezetimibe and atorvastatin) tablets for the treatment of elevated low-density lipoprotein (LDL) cholesterol in patients with primary or mixed hyperlipidemia as adjunctive therapy to diet when diet alone is not enough.

 

·                  Advised by the FDA that the agency needs additional time to assess the results of a recently completed inspection of a clinical trial site for sugammadex, Merck’s investigational medicine for the reversal of neuromuscular blockade induced by rocuronium or vecuronium.

 

·                  Received a Complete Response Letter from the FDA regarding the New Drug Application for suvorexant, Merck’s investigational medicine for the treatment of insomnia. The company is evaluating the requests outlined in the Complete Response Letter, and plans to submit definitive data in response to the FDA in the first half of 2014.

 

Financial Targets

 

Merck reiterated that it expects full-year 2013 non-GAAP EPS to be between $3.45 and $3.55, and revised 2013 GAAP EPS to be between $1.84 and $2.05. The 2013 non-GAAP range excludes acquisition-related costs, costs related to restructuring programs and certain other items.

 

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At current exchange rates, Merck now expects full-year 2013 sales to be approximately 5 to 6 percent below prior year levels with foreign exchange accounting for approximately 3 percentage points of the decline.

 

In addition, the company now expects full-year 2013 non-GAAP R&D expense to be below 2012 levels. The company continues to expect its full-year 2013 non-GAAP tax rate to be in the range of 22 to 23 percent.

 

A reconciliation of anticipated 2013 EPS, as reported in accordance with GAAP to non-GAAP EPS that excludes certain items, is provided in the table below.

 

$ in millions, except EPS amounts

 

Full Year 2013

 

GAAP EPS

 

$1.84 to $2.05

 

Difference3

 

1.61 to 1.50

 

Non-GAAP EPS that excludes items listed below

 

$3.45 to $3.55

 

 

 

 

 

Acquisition-related costs

 

$5,400 to $5,200

 

Restructuring costs

 

700 to 500

 

Net decrease (increase) in income before taxes

 

6,100 to 5,700

 

Estimated income tax (benefit) expense

 

(1,275) to (1,195)

 

Decrease (increase) in net income

 

$4,825 to $4,505

 

 

Total Employees

 

As of June 30, 2013, Merck had approximately 81,000 employees worldwide.  In addition, the company’s joint ventures in China and Brazil, which are included in the consolidated results of Merck, had about 1,300 employees.

 

Earnings Conference Call

 

Investors, journalists and the general public may access a live audio webcast of the call today at 8:00 a.m. EDT on Merck’s website at http://www.merck.com/investors/events-and-presentations/home.html. Institutional investors and analysts can participate in the call by dialing (706) 758-9927 or (877) 381-5782 and using ID code number 77194196. Members of the media are invited to monitor the call by dialing (706) 758-9928 or (800) 399-7917 and using ID code number 77194196.  Journalists who wish to ask questions are requested to contact a member of Merck’s Media Relations team at the conclusion of the call.

 

About Merck

 

Today’s Merck is a global healthcare leader working to help the world be well. Merck is known as MSD outside the United States and Canada. Through our prescription medicines, vaccines, biologic therapies, and consumer care and animal health products, we work with customers and operate in more than 140 countries to deliver innovative health solutions. We also demonstrate our commitment to increasing access to healthcare through far-reaching

 

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policies, programs and partnerships. For more information, visit www.merck.com and connect with us on Twitter, Facebook and YouTube.

 

Forward-Looking Statement

 

This news release includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of Merck’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to pipeline products that the products will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.

 

Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; Merck’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of Merck’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.

 

Merck undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in Merck’s 2012 Annual Report on Form 10-K and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).

 

###

 

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MERCK & CO., INC.

CONSOLIDATED STATEMENT OF OPERATIONS - GAAP

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 1

 

 

 

GAAP

 

 

 

GAAP

 

 

 

 

 

2Q13

 

2Q12

 

% Change

 

YTD 2013

 

YTD 2012

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

11,010

 

$

12,311

 

-11

%

$

21,681

 

$

24,041

 

-10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs, Expenses and Other

 

 

 

 

 

 

 

 

 

 

 

 

 

Materials and production (1)

 

4,284

 

4,112

 

4

%

8,243

 

8,150

 

1

%

Marketing and administrative (1)

 

3,140

 

3,249

 

-3

%

6,126

 

6,322

 

-3

%

Research and development (1)

 

2,101

 

2,165

 

-3

%

4,008

 

4,026

 

 

Restructuring costs (2)

 

155

 

144

 

8

%

274

 

363

 

-25

%

Equity income from affiliates (3)

 

(116

)

(142

)

-18

%

(249

)

(253

)

-2

%

Other (income) expense, net (1) / (4)

 

201

 

103

 

95

%

484

 

247

 

96

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Before Taxes

 

1,245

 

2,680

 

-54

%

2,795

 

5,186

 

-46

%

Income Tax Provision

 

310

 

860

 

 

 

244

 

1,599

 

 

 

Net Income

 

935

 

1,820

 

-49

%

2,551

 

3,587

 

-29

%

Less: Net Income Attributable to Noncontrolling Interests

 

29

 

27

 

 

 

52

 

56

 

 

 

Net Income Attributable to Merck & Co., Inc.

 

$

906

 

$

1,793

 

-49

%

$

2,499

 

$

3,531

 

-29

%

Earnings per Common Share Assuming Dilution

 

$

0.30

 

$

0.58

 

-48

%

$

0.82

 

$

1.15

 

-29

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Shares Outstanding Assuming Dilution

 

3,010

 

3,072

 

 

 

3,030

 

3,074

 

 

 

Tax Rate (5)

 

24.9

%

32.1

%

 

 

8.7

%

30.8

%

 

 

 

(1) Amounts include the impact of acquisition-related costs, restructuring costs and certain other items. See accompanying tables for details.

 

(2) Represents separation and other related costs associated with restructuring activities under the company’s formal restructuring programs.

 

(3) Primarily reflects equity income from the AstraZeneca LP and Sanofi Pasteur MSD partnerships.

 

(4) Other (income) expense, net in the second quarter and first six months of 2013 reflects higher exchange losses, which for the first six months of 2013 includes approximately $140 million as a result of a Venezuelan currency devaluation.

 

(5) The effective tax rates for the second quarter and first six months of 2013 reflect benefits from reductions in tax reserves upon expiration of applicable statute of limitations. In addition, the effective tax rate for the first six months of 2013 reflects the favorable impact of tax legislation enacted in the first quarter of 2013, as well as a benefit of approximately $160 million associated with the resolution of a previously disclosed legacy Schering-Plough federal income tax issue.

 



 

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF OPERATIONS

GAAP TO NON-GAAP RECONCILIATION

SECOND QUARTER 2013

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2a

 

 

 

GAAP

 

Acquisition-
Related Costs 
(1)

 

Restructuring
Costs 
(2)

 

Certain Other 
Items

 

Adjustment
Subtotal

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

11,010

 

 

 

 

 

 

 

 

 

$

11,010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs, Expenses and Other

 

 

 

 

 

 

 

 

 

 

 

 

 

Materials and production

 

4,284

 

1,515

 

93

 

 

 

1,608

 

2,676

 

Marketing and administrative

 

3,140

 

19

 

16

 

 

 

35

 

3,105

 

Research and development

 

2,101

 

234

 

14

 

 

 

248

 

1,853

 

Restructuring costs

 

155

 

 

 

155

 

 

 

155

 

 

Equity income from affiliates

 

(116

)

 

 

 

 

 

 

 

(116

)

Other (income) expense, net

 

201

 

 

 

 

 

(13

)

(13

)

214

 

Income Before Taxes

 

1,245

 

(1,768

)

(278

)

13

 

(2,033

)

3,278

 

Taxes on Income

 

310

 

 

 

 

 

 

 

(409

)(3)

719

 

Net Income

 

935

 

 

 

 

 

 

 

(1,624

)

2,559

 

Less: Net Income Attributable to Noncontrolling Interests

 

29

 

 

 

 

 

 

 

 

29

 

Net Income Attributable to Merck & Co., Inc.

 

$

906

 

 

 

 

 

 

 

$

(1,624

)

$

2,530

 

Earnings per Common Share Assuming Dilution

 

$

0.30

 

 

 

 

 

 

 

 

 

$

0.84

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Shares Outstanding Assuming Dilution

 

3,010

 

 

 

 

 

 

 

 

 

3,010

 

Tax Rate

 

24.9

%

 

 

 

 

 

 

 

 

21.9

%

 

Merck is providing non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. Management believes that providing this information enhances investors’ understanding of the company’s performance.  This information should be considered in addition to, but not in lieu of, information prepared in accordance with GAAP.

 

(1) Amounts included in materials and production costs reflect expenses of $1.2 billion for the amortization of intangible assets recognized as a result of mergers and acquisitions, as well as $330 million of impairment charges on product intangibles.  Amounts included in marketing and administrative expenses reflect merger integration costs.  Amounts included in research and development expenses represent in-process research and development (“IPR&D”) impairment charges.

 

(2) Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to actions under the company’s formal restructuring programs.

 

(3) Represents the estimated tax impact on the reconciling items.

 



 

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF OPERATIONS

GAAP TO NON-GAAP RECONCILIATION

SIX MONTHS ENDED JUNE 30, 2013

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2b

 

 

 

GAAP

 

Acquisition-
Related Costs 
(1)

 

Restructuring
Costs 
(2)

 

Certain Other
Items

 

Adjustment
Subtotal

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

21,681

 

 

 

 

 

 

 

 

 

$

21,681

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs, Expenses and Other

 

 

 

 

 

 

 

 

 

 

 

 

 

Materials and production

 

8,243

 

2,699

 

136

 

 

 

2,835

 

5,408

 

Marketing and administrative

 

6,126

 

42

 

33

 

 

 

75

 

6,051

 

Research and development

 

4,008

 

264

 

29

 

 

 

293

 

3,715

 

Restructuring costs

 

274

 

 

 

274

 

 

 

274

 

 

Equity income from affiliates

 

(249

)

 

 

 

 

 

 

 

(249

)

Other (income) expense, net

 

484

 

 

 

 

 

(13

)

(13

)

497

 

Income Before Taxes

 

2,795

 

(3,005

)

(472

)

13

 

(3,464

)

6,259

 

Taxes on Income

 

244

 

 

 

 

 

 

 

(848

)(3)

1,092

 

Net Income

 

2,551

 

 

 

 

 

 

 

(2,616

)

5,167

 

Less: Net Income Attributable to Noncontrolling Interests

 

52

 

 

 

 

 

 

 

 

52

 

Net Income Attributable to Merck & Co., Inc.

 

$

2,499

 

 

 

 

 

 

 

$

(2,616

)

$

5,115

 

Earnings per Common Share Assuming Dilution

 

$

0.82

 

 

 

 

 

 

 

 

 

$

1.69

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Shares Outstanding Assuming Dilution

 

3,030

 

 

 

 

 

 

 

 

 

3,030

 

Tax Rate

 

8.7

%

 

 

 

 

 

 

 

 

17.4

%

 

Merck is providing non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. Management believes that providing this information enhances investors’ understanding of the company’s performance.  This information should be considered in addition to, but not in lieu of, information prepared in accordance with GAAP.

 

(1) Amounts included in materials and production costs reflect expenses of $2.4 billion for the amortization of intangible assets recognized as a result of mergers and acquisitions, as well as $330 million of impairment charges on product intangibles.  Amounts included in marketing and administrative expenses reflect merger integration costs.  Amounts included in research and development expenses represent in-process research and development (“IPR&D”) impairment charges.

 

(2) Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to actions under the company’s formal restructuring programs.

 

(3) Represents the estimated tax impact on the reconciling items, as well as a benefit of approximately $160 million associated with the resolution of a previously disclosed legacy Schering-Plough federal income tax issue.

 



 

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

(AMOUNTS IN MILLIONS)

Table 3

 

 

 

2013

 

2012

 

% Change

 

% Change

 

 

 

1Q

 

2Q

 

Jun YTD

 

1Q

 

2Q

 

Jun YTD

 

3Q

 

4Q

 

Full Year

 

2Q

 

Jun YTD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL SALES (1)

 

$

10,671

 

$

11,010

 

$

21,681

 

$

11,731

 

$

12,311

 

$

24,041

 

$

11,488

 

$

11,738

 

$

47,267

 

-11

 

-10

 

PHARMACEUTICAL

 

8,891

 

9,310

 

18,201

 

10,082

 

10,560

 

20,642

 

9,875

 

10,085

 

40,601

 

-12

 

-12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Primary Care and Women’s Health

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cardiovascular

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Zetia

 

629

 

650

 

1,279

 

614

 

632

 

1,246

 

645

 

676

 

2,567

 

3

 

3

 

Vytorin

 

394

 

417

 

810

 

444

 

445

 

889

 

423

 

435

 

1,747

 

-6

 

-9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diabetes & Obesity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Januvia

 

884

 

1,072

 

1,956

 

919

 

1,058

 

1,977

 

975

 

1,134

 

4,086

 

1

 

-1

 

Janumet

 

409

 

474

 

883

 

392

 

411

 

802

 

405

 

452

 

1,659

 

16

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Respiratory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nasonex

 

385

 

325

 

711

 

375

 

293

 

668

 

292

 

308

 

1,268

 

11

 

6

 

Singulair

 

337

 

281

 

618

 

1,340

 

1,431

 

2,771

 

602

 

480

 

3,853

 

-80

 

-78

 

Dulera

 

68

 

79

 

147

 

39

 

50

 

89

 

52

 

67

 

207

 

57

 

66

 

Asmanex

 

40

 

49

 

89

 

48

 

51

 

99

 

42

 

44

 

185

 

-3

 

-9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Women’s Health & Endocrine

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NuvaRing

 

151

 

171

 

322

 

146

 

157

 

303

 

156

 

164

 

623

 

9

 

6

 

Fosamax

 

137

 

144

 

281

 

184

 

186

 

370

 

152

 

154

 

676

 

-22

 

-24

 

Follistim AQ

 

122

 

134

 

257

 

116

 

125

 

241

 

111

 

116

 

468

 

8

 

6

 

Implanon

 

84

 

102

 

187

 

76

 

85

 

161

 

93

 

94

 

348

 

20

 

16

 

Cerazette

 

61

 

48

 

108

 

67

 

72

 

139

 

64

 

68

 

271

 

-34

 

-22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Arcoxia

 

121

 

121

 

242

 

112

 

117

 

229

 

109

 

115

 

453

 

4

 

6

 

Avelox

 

36

 

29

 

65

 

73

 

44

 

117

 

30

 

55

 

201

 

-34

 

-45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hospital and Specialty

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Immunology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Remicade

 

549

 

527

 

1,076

 

519

 

518

 

1,037

 

490

 

549

 

2,076

 

2

 

4

 

Simponi

 

108

 

120

 

228

 

74

 

76

 

150

 

86

 

95

 

331

 

59

 

52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Infectious Disease

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Isentress

 

362

 

412

 

775

 

337

 

398

 

735

 

399

 

381

 

1,515

 

4

 

5

 

Cancidas

 

162

 

163

 

326

 

145

 

166

 

311

 

163

 

145

 

619

 

-1

 

5

 

PegIntron

 

126

 

142

 

268

 

162

 

183

 

345

 

165

 

143

 

653

 

-22

 

-22

 

Invanz

 

110

 

120

 

230

 

101

 

110

 

211

 

118

 

116

 

445

 

9

 

9

 

Victrelis

 

110

 

116

 

226

 

111

 

126

 

238

 

149

 

115

 

502

 

-8

 

-5

 

Noxafil

 

65

 

71

 

136

 

59

 

66

 

125

 

66

 

68

 

258

 

7

 

9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oncology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Temodar

 

216

 

219

 

434

 

237

 

225

 

461

 

227

 

229

 

917

 

-3

 

-6

 

Emend

 

116

 

135

 

250

 

102

 

145

 

247

 

111

 

131

 

489

 

-7

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cosopt / Trusopt

 

105

 

103

 

209

 

124

 

105

 

229

 

102

 

113

 

444

 

-2

 

-9

 

Bridion

 

63

 

69

 

131

 

58

 

60

 

118

 

68

 

75

 

261

 

14

 

11

 

Integrilin

 

47

 

48

 

95

 

53

 

60

 

113

 

48

 

51

 

211

 

-20

 

-15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diversified Brands

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cozaar / Hyzaar

 

267

 

255

 

522

 

336

 

337

 

674

 

295

 

315

 

1,284

 

-24

 

-23

 

Primaxin

 

84

 

85

 

168

 

88

 

104

 

192

 

109

 

83

 

384

 

-19

 

-12

 

Zocor

 

82

 

74

 

156

 

103

 

96

 

199

 

86

 

98

 

383

 

-23

 

-22

 

Propecia

 

68

 

67

 

135

 

108

 

100

 

208

 

104

 

112

 

424

 

-33

 

-35

 

Clarinex

 

61

 

64

 

125

 

134

 

140

 

273

 

64

 

56

 

393

 

-54

 

-54

 

Claritin Rx

 

76

 

40

 

115

 

87

 

48

 

134

 

47

 

63

 

244

 

-17

 

-14

 

Remeron

 

52

 

53

 

106

 

57

 

66

 

123

 

52

 

57

 

232

 

-19

 

-14

 

Proscar

 

39

 

58

 

98

 

51

 

55

 

106

 

55

 

56

 

217

 

7

 

-8

 

Maxalt

 

40

 

43

 

83

 

156

 

154

 

310

 

166

 

162

 

638

 

-72

 

-73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vaccines

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gardasil

 

390

 

383

 

773

 

284

 

324

 

608

 

581

 

442

 

1,631

 

18

 

27

 

ProQuad, M-M-R II and Varivax

 

272

 

339

 

611

 

255

 

316

 

571

 

396

 

306

 

1,273

 

7

 

7

 

Zostavax

 

168

 

141

 

309

 

76

 

148

 

224

 

202

 

225

 

651

 

-5

 

38

 

RotaTeq

 

162

 

144

 

306

 

142

 

142

 

284

 

150

 

168

 

601

 

1

 

8

 

Pneumovax

 

111

 

108

 

219

 

112

 

101

 

213

 

160

 

208

 

580

 

7

 

3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Pharmaceutical (2)

 

1,022

 

1,115

 

2,136

 

1,066

 

1,034

 

2,102

 

1,065

 

1,161

 

4,333

 

8

 

2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ANIMAL HEALTH

 

840

 

851

 

1,691

 

821

 

865

 

1,686

 

815

 

898

 

3,399

 

-2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSUMER CARE (3)

 

571

 

490

 

1,061

 

554

 

552

 

1,106

 

451

 

395

 

1,952

 

-11

 

-4

 

Claritin OTC

 

177

 

78

 

256

 

169

 

145

 

314

 

118

 

100

 

532

 

-46

 

-19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Revenues (4)

 

369

 

359

 

727

 

274

 

333

 

608

 

347

 

360

 

1,315

 

8

 

20

 

Astra

 

262

 

245

 

507

 

186

 

223

 

409

 

255

 

251

 

915

 

10

 

24

 

 

* 100% or greater

Sum of quarterly amounts may not equal year-to-date amounts due to rounding.

(1) Only select products are shown.

(2) Includes Pharmaceutical products not individually shown above. Other Vaccines sales included in Other Pharmaceutical were $53 million and $86 million for the first and second quarters of 2013. Other Vaccines sales included in Other Pharmaceutical were $60 million, $75 million, $116 million, and $69 million for the first, second, third, and fourth quarters of 2012, respectively.

(3) The decrease in Consumer Care sales resulted from the ongoing termination in China of certain Consumer Care distribution arrangements and a reversal of sales previously made to those distributors, together with associated termination costs.

(4) Other revenues are primarily comprised of alliance revenue, miscellaneous corporate revenues and third party manufacturing sales.