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Merck Announces Q2 Results

July 27, 2012
Merck

Merck (NYSE: MRK), known as MSD outside the U.S. and Canada, today announced financial results for the second quarter of 2012.

Worldwide sales were $12.3 billion for the second quarter of 2012, an increase of 1 percent, or 5 percent excluding foreign exchange, compared with the second quarter of 2011. Sales also were unfavorably impacted by the arbitration settlement agreement with Johnson & Johnson.

"This quarter we delivered strong operational performance by focusing on growth and execution. We achieved top- and bottom-line growth by advancing our core strategy and maintaining momentum across our businesses," said Kenneth C. Frazier, chairman and CEO of Merck.

"The company remains focused on translating cutting-edge science into medically important products," he added. "We're seeing significant progress in the pipeline this year, and we expect six major filings over the next 18 months, including suvorexant for insomnia and odanacatib for osteoporosis. This focus on innovation and execution will drive long-term shareholder value."

Pharmaceutical Revenue Performance

Second-quarter pharmaceutical sales grew 2 percent to $10.6 billion, including a 3 percent negative impact due to foreign exchange.

Sales from emerging markets accounted for approximately 18 percent of pharmaceutical sales in the second quarter.

Worldwide sales of the combined diabetes franchise of JANUVIA/JANUMET, medicines that help lower blood sugar levels in adults with type 2 diabetes, grew 33 percent to $1.5 billion in the second quarter of 2012 driven by growth in all regions.

Worldwide sales of SINGULAIR, a once-a-day oral medicine for the chronic treatment of asthma and the relief of symptoms of allergic rhinitis, grew 6 percent to $1.4 billion in the second quarter of 2012. The patent for SINGULAIR will expire in the U.S. in Aug. 2012 and in major European markets in Feb. 2013. The company expects a significant and rapid reduction in sales thereafter in those markets. SINGULAIR will retain marketing exclusivity in Japan until 2016.

Sales of ZETIA (ezetimibe) and VYTORIN (ezetimibe/simvastatin), medicines for lowering LDL cholesterol, grew 2 percent to $1.1 billion in the second quarter driven by growth of ZETIA in the United States and VYTORIN outside of the United States.

Combined sales of REMICADE and SIMPONI, treatments for inflammatory diseases, declined 35 percent to $594 million for the second quarter of 2012. In Europe, Russia and Turkey, where Merck retained exclusive marketing rights, the combined sales of REMICADE and SIMPONI declined 3 percent for the second quarter of 2012, but excluding the impact of foreign exchange grew 6 percent. In July 2011, the company transferred exclusive marketing rights for REMICADE and SIMPONI to Johnson & Johnson in Canada, Central and South America, the Middle East, Africa and Asia Pacific.

ISENTRESS, an HIV integrase inhibitor for use in combination with other antiretroviral agents for the treatment of HIV-1 infection, grew 18 percent to $398 million in the second quarter driven by strong growth in the emerging markets and the United States.

Global sales of Merck's antihypertensive medicines COZAAR and HYZAAR were down 17 percent to $337 million in the second quarter of 2012 due to the loss of marketing exclusivity in the United States and major European markets in 2010.

Sales recorded by Merck for GARDASIL, a vaccine to help prevent certain diseases caused by four types of human papillomavirus (HPV), increased 17 percent to $324 million for the quarter driven by vaccinations of males in the United States and the launch in Japan.

Sales of ZOSTAVAX (zoster vaccine live), a vaccine for the prevention of herpes zoster, grew 22 percent to $148 million in the quarter. The company continues to increase its promotional efforts for ZOSTAVAX in the United States.

Sales of VICTRELIS, the company's oral hepatitis C virus NS3/4A protease inhibitor, were $126 million in the quarter. VICTRELIS is approved in 43 countries and has launched in 23 of those markets.

Animal Health Revenue Performance

Animal Health sales totaled $865 million for the second quarter of 2012, an 8 percent increase over the second quarter of 2011, including a 6 percent negative impact due to foreign exchange. Animal Health had strong performance in the United States and Asia Pacific, with growth led by increased sales of cattle and swine products. The division's products include pharmaceutical and vaccine products for the prevention, treatment and control of disease in all major farm and companion animal species.

Consumer Care Revenue Performance

Second-quarter global sales of Consumer Care were $552 million, an increase of 2 percent compared to the second quarter of 2011, including a 1 percent negative impact due to foreign exchange. The sales increase was primarily due to MiraLAX, CLARITIN and COPPERTONE.

Other Revenue Performance

Other revenues -- primarily comprised of alliance revenue, miscellaneous corporate revenues and third-party manufacturing sales -- declined 26 percent to $333 million. The change was driven largely by lower revenue from AstraZeneca LP (AZLP) recorded by Merck, which declined 27 percent to $223 million, as well as by lower third-party manufacturing sales.

Second-Quarter Expense and Other Information

The costs detailed below totaled $9.7 billion on a GAAP basis during the second quarter of 2012 and include $1.7 billion of acquisition-related costs and restructuring costs.



Source: Copyright Business Wire 2012


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