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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Merck and Co Inc | NYSE:MRK | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.77 | -0.59% | 129.29 | 129.90 | 128.02 | 129.90 | 7,053,084 | 21:15:02 |
Merck (NYSE: MRK), known as MSD outside the United States and Canada, today announced financial results for the second quarter of 2019.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20190730005360/en/
“Our science-led strategy and execution across our key growth pillars have driven another quarter of accelerating revenue growth with strength across our global portfolio,” said Kenneth C. Frazier, chairman and chief executive officer, Merck. “We remain confident that our innovative products and significant pipeline opportunities will continue to deliver strong results and provide sustainable value to patients and shareholders.”
Financial Summary
$ in millions, except EPS amounts
Second Quarter
2019
2018
Change
Change Ex- Exchange
Sales
$11,760
$10,465
12%
15%
GAAP net income1
2,670
1,707
56%
61%
Non-GAAP net income that excludes certain items1,2*
3,356
2,854
18%
20%
GAAP EPS
1.03
0.63
63%
67%
Non-GAAP EPS that excludes certain items2
1.30
1.06
23%
25%
*Refer to table on page 10
Worldwide sales were $11.8 billion for the second quarter of 2019, an increase of 12% compared with the second quarter of 2018; excluding the negative impact from foreign exchange, worldwide sales grew 15%.
GAAP (generally accepted accounting principles) earnings per share assuming dilution (EPS) were $1.03 for the second quarter of 2019. Non-GAAP EPS of $1.30 for the second quarter of 2019 excludes acquisition- and divestiture-related costs, restructuring costs and certain other items. Year-to-date results can be found in the attached tables.
Pipeline Highlights
Oncology
Merck continued to advance the development programs for KEYTRUDA (pembrolizumab), the company’s anti-PD-1 therapy; Lynparza (olaparib), a PARP inhibitor being co-developed and co-commercialized with AstraZeneca; and Lenvima (lenvatinib mesylate), an orally available tyrosine kinase inhibitor being co-developed and co-commercialized with Eisai Co., Ltd. (Eisai).
KEYTRUDA
Lynparza
Lenvima
Vaccines
HIV and Hospital Acute Care
Business Development Highlights
Second-Quarter Revenue Performance
The following table reflects sales of the company’s top pharmaceutical products, as well as sales of animal health products.
$ in millionsSecond Quarter
2019
2018
Change
Change Ex- Exchange
Total Sales
$11,760
$10,465
12%
15%
Pharmaceutical
10,460
9,282
13%
17%
KEYTRUDA
2,634
1,667
58%
63%
JANUVIA / JANUMET
1,441
1,535
-6%
-3%
GARDASIL / GARDASIL 9
886
608
46%
50%
PROQUAD, M-M-R II and
VARIVAX
675
426
58%
61%
BRIDION
278
240
16%
20%
ISENTRESS / ISENTRESS HD
247
305
-19%
-13%
NUVARING
240
236
2%
3%
ZETIA / VYTORIN
232
381
-39%
-36%
SIMPONI
214
233
-8%
-1%
ROTATEQ
172
156
10%
13%
Animal Health
1,124
1,090
3%
9%
Livestock
671
633
6%
13%
Companion Animals
453
457
-1%
4%
Other Revenues
176
93
88%
-62%
Pharmaceutical Revenue
Second-quarter pharmaceutical sales were $10.5 billion, an increase of 13% compared with the second quarter of 2018; excluding the unfavorable effect of foreign exchange, sales grew 17% in the second quarter. The increase was driven primarily by growth in oncology and vaccines, partially offset by the ongoing impacts of the loss of market exclusivity for several products. International pharmaceutical sales represented 55% of total sales in the quarter. Performance in international markets was led by China, which had pharmaceutical sales of $745 million representing growth of 41% compared with the second quarter of 2018, driven by oncology and vaccines. Excluding the unfavorable effect of foreign exchange, pharmaceutical sales in China grew by 51%.
Growth in oncology was largely driven by a nearly $1 billion increase in sales for KEYTRUDA to $2.6 billion, reflecting strong momentum from the NSCLC indications as well as continued uptake in other indications, including the recently launched RCC and adjuvant melanoma indications, along with growth from Lynparza and Lenvima.
Growth in vaccines reflects higher sales of GARDASIL [Human Papillomavirus Quadrivalent (Types 6, 11, 16 and 18) Vaccine, Recombinant] and GARDASIL 9, vaccines to prevent certain cancers and other diseases caused by HPV, primarily due to public sector buying patterns, demand and pricing in the United States, and the ongoing commercial launch in China. Higher demand in Europe, driven primarily by increased vaccination rates for both boys and girls, also contributed to sales growth.
Growth in pediatric vaccines was driven by M-M-R II (Measles, Mumps and Rubella Virus Vaccine Live), a vaccine to help prevent measles, mumps and rubella; VARIVAX (Varicella Virus Vaccine Live), a vaccine to help prevent chickenpox; and PROQUAD (Measles, Mumps, Rubella and Varicella Virus Vaccine Live), a combination vaccine to help protect against measles, mumps, rubella and varicella; reflecting higher demand, including private-sector buy-in, and pricing in the United States; government tenders in Latin America and higher demand in Europe.
Performance in hospital acute care reflects strong demand in the United States for BRIDION (sugammadex) Injection 100 mg/mL, a medicine for the reversal of neuromuscular blockade induced by rocuronium bromide or vecuronium bromide in adults undergoing surgery; and the ongoing launch of PREVYMIS (letermovir), a medicine for the prevention of cytomegalovirus (CMV) infection and disease in adult CMV-seropositive recipients of an allogeneic hematopoietic stem cell transplant.
Pharmaceutical sales growth for the quarter was partially offset by the ongoing impacts from the loss of market exclusivity for ZETIA (ezetimibe) and VYTORIN (ezetimibe/simvastatin), INVANZ (ertapenem sodium) and REMICADE (infliximab). In addition, the decline in sales of JANUVIA (sitagliptin) and JANUMET (sitagliptin and metformin HCI) reflects continued pricing pressure in the United States, which more than offset higher demand globally.
Animal Health Revenue
Animal Health sales totaled $1.1 billion for the second quarter of 2019, an increase of 3% compared with the second quarter of 2018. Excluding the unfavorable effect from foreign exchange, Animal Health sales grew 9%. Growth in the second quarter was primarily driven by livestock, predominantly due to products acquired in the Antelliq acquisition. Companion animal sales performance reflects volume growth in vaccine and insulin products, partially offset by the timing of customer purchases in the prior year for the BRAVECTO (fluralaner) line of products for parasitic control.
Animal Health segment profits were $405 million in the second quarter of 2019, a decrease of 10% compared with $450 million in the second quarter of 2018, primarily reflecting the unfavorable impact of foreign exchange.3
Second-Quarter Expense, EPS and Related Information
The tables below present selected expense information.
$ in millions
Second-Quarter 2019
GAAP
Acquisition- and Divestiture- Related Costs4
Restructuring Costs
Certain Other Items
Non-GAAP2
Cost of sales
$3,401
$447
$65
$–
$2,889
Selling, general and administrative
2,712
61
32
–
2,619
Research and development
2,189
4
3
–
2,182
Restructuring costs
59
–
59
–
–
Other (income) expense, net
140
148
–
48
(56)
Second-Quarter 2018
Cost of sales
$3,417
$733
$3
$–
$2,681
Selling, general and administrative
2,508
16
1
–
2,491
Research and development
2,274
1
3
344
1,926
Restructuring costs
228
–
228
–
–
Other (income) expense, net
(48)
105
–
(32)
(121)
GAAP Expense, EPS and Related Information
Gross margin was 71.1% for the second quarter of 2019 compared to 67.3% for the second quarter of 2018. The increase in gross margin for the second quarter of 2019 was primarily driven by lower acquisition- and divestiture-related costs, favorable product mix and lower amortization of intangible assets related to collaborations, partially offset by higher restructuring costs.
Selling, general and administrative expenses were $2.7 billion in the second quarter of 2019, an 8% increase compared to the second quarter of 2018. The increase primarily reflects higher administrative, acquisition- and divestiture-related, restructuring and promotion costs, partially offset by the favorable effects of foreign exchange.
Research and development (R&D) expenses were $2.2 billion in the second quarter of 2019, a decline of 4% compared with the second quarter of 2018. The decline was driven primarily by lower expenses related to business development transactions, largely reflecting a $344 million charge recorded in the second quarter of 2018 related to the Viralytics Limited acquisition. The decline was partially offset by higher expenses related to clinical development and increased investment in discovery research and early drug development.
Other (income) expense, net, was $140 million of expense in the second quarter of 2019 compared to $48 million of income in the second quarter of 2018. Other (income) expense, net, in the second quarter of 2019 reflects impairment charges and lower income from investments in equity securities.
GAAP EPS was $1.03 for the second quarter of 2019 compared with $0.63 for the second quarter of 2018.
Non-GAAP Expense, EPS and Related Information
The non-GAAP gross margin was 75.4% for the second quarter of 2019, compared to 74.4% for the second quarter of 2018. The increase in non-GAAP gross margin reflects favorable product mix and lower amortization of intangible assets related to collaborations.
Non-GAAP selling, general and administrative expenses were $2.6 billion in the second quarter of 2019, a 5% increase compared to the second quarter of 2018. The increase reflects higher administrative and promotion costs, partially offset by the favorable effects of foreign exchange.
Non-GAAP R&D expenses were $2.2 billion in the second quarter of 2019, a 13% increase compared to the second quarter of 2018. The increase reflects higher expenses related to clinical development, investment in discovery research and early drug development, as well as business development transactions.
Non-GAAP other (income) expense, net, was $56 million of income in the second quarter of 2019 compared to $121 million of income in the second quarter of 2018, driven primarily by lower income from investments in equity securities.
Non-GAAP EPS was $1.30 for the second quarter of 2019 compared with $1.06 for the second quarter of 2018.
A reconciliation of GAAP to non-GAAP net income and EPS is provided in the table that follows.
$ in millions, except EPS amounts
Second Quarter
2019
2018
EPS
GAAP EPS
$1.03
$0.63
Difference5
0.27
0.43
Non-GAAP EPS that excludes items listed below2
$1.30
$1.06
Net Income
GAAP net income1
$2,670
$1,707
Difference
686
1,147
Non-GAAP net income that excludes items listed below1,2
$3,356
$2,854
Decrease (Increase) in Net Income Due to Excluded Items:
Acquisition- and divestiture-related costs4
$660
$855
Restructuring costs
159
235
Charge for the acquisition of Viralytics
–
344
Other
48
(32)
Net decrease (increase) in income before taxes
867
1,402
Estimated income tax (benefit) expense
(145)
(255)
Acquisition- and divestiture-related costs attributable to noncontrolling interests
(36)
–
Decrease (increase) in net income
$686
$1,147
Financial Outlook
Merck narrowed and raised its full-year 2019 revenue range to be between $45.2 billion and $46.2 billion, including a negative impact from foreign exchange of slightly more than 1% at mid-July exchange rates.
Merck narrowed and reduced its full-year 2019 GAAP EPS range to be between $3.78 and $3.88. The reduction in the GAAP EPS range primarily reflects the inclusion of an approximately $1.1 billion charge related to the acquisition of Peloton. Merck narrowed and raised its full-year 2019 non-GAAP EPS range to be between $4.84 and $4.94, including a slightly negative impact from foreign exchange at mid-July exchange rates. The non-GAAP range excludes acquisition- and divestiture-related costs, costs related to restructuring programs, a net benefit from the settlement of certain federal income tax matters, the charge for the acquisition of Peloton and certain other items.
The following table summarizes the company’s full year 2019 financial guidance.
GAAP
Non-GAAP2
Revenue
$45.2 to $46.2 billion
$45.2 to $46.2 billion*
Operating expenses
Higher than 2018 by a low-single digit rate
Higher than 2018 by a mid-single digit rate
Effective tax rate
16.0% to 17.0%
18.5% to 19.5%
EPS**
$3.78 to $3.88
$4.84 to $4.94
*The company does not have any non-GAAP adjustments to revenue.
**EPS guidance for 2019 assumes a share count (assuming dilution) of approximately 2.6 billion shares.
A reconciliation of anticipated 2019 GAAP EPS to non-GAAP EPS and the items excluded from non-GAAP EPS are provided in the table below.
$ in millions, except EPS amountsFull-Year 2019
GAAP EPS
$3.78 to $3.88
Difference5
1.06
Non-GAAP EPS that excludes items listed below2
$4.84 to $4.94
Acquisition- and divestiture-related costs4
$2,100
Restructuring costs
500
Charge for the acquisition of Peloton
1,100
Net decrease (increase) in income before taxes
3,700
Income tax (benefit) expense6
(950)
Decrease (increase) in net income
$2,750
The expected full-year GAAP effective tax rate of 16.0% to 17.0% reflects a net favorable impact of approximately 2.5 percentage points from the above items.
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://investors.merck.com/events-and-presentations/default.aspx. Institutional investors and analysts can participate in the call by dialing (706) 758-9927 or (877) 381-5782 and using ID code number 4263838. Members of the media are invited to monitor the call by dialing (706) 758-9928 or (800) 399-7917 and using ID code number 4263838. 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
For more than a century, Merck, a leading global biopharmaceutical company known as MSD outside of the United States and Canada, has been inventing for life, bringing forward medicines and vaccines for many of the world’s most challenging diseases. Through our prescription medicines, vaccines, biologic therapies 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 health care through far-reaching policies, programs and partnerships. Today, Merck continues to be at the forefront of research to advance the prevention and treatment of diseases that threaten people and communities around the world - including cancer, cardio-metabolic diseases, emerging animal diseases, Alzheimer’s disease and infectious diseases including HIV and Ebola. For more information, visit www.merck.com and connect with us on Twitter, Facebook, Instagram, YouTube and LinkedIn.
Forward-Looking Statement of Merck & Co., Inc., Kenilworth, N.J., USA
This news release of Merck & Co., Inc., Kenilworth, N.J., USA (the “company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of the company’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; the company’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 the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.
The company 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 the company’s 2018 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).
_________________________1
Net income attributable to Merck & Co., Inc.
2
Merck is providing certain 2019 and 2018 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 results and permits investors to understand how management assesses performance. Management uses these measures internally for planning and forecasting purposes and to measure the performance of the company along with other metrics. Senior management’s annual compensation is derived in part using non-GAAP income and non-GAAP EPS. This information should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. For a description of the items, see Table 2a attached to this release.
3
Animal Health segment profits are comprised of segment sales, less all cost of sales, as well as selling, general and administrative expenses and research and development costs directly incurred by the segment. For internal management reporting, Merck does not allocate general and administrative expenses not directly incurred by the segment, nor the cost of financing these activities. Separate divisions maintain responsibility for monitoring and managing these costs, including depreciation related to fixed assets utilized by these divisions and, therefore, they are not included in segment profits.
4
Includes expenses for the amortization of intangible assets and purchase accounting adjustments to inventories recognized as a result of acquisitions, intangible asset impairment charges, and expense or income related to changes in the estimated fair value measurement of liabilities for contingent consideration. Also includes integration, transaction and certain other costs related to business acquisitions and divestitures.
5
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.
6
Includes the estimated tax impact on the reconciling items. In addition, includes a $360 million net tax benefit related to the settlement of certain federal income tax matters and a $67 million tax charge related to the finalization of treasury regulations for the Tax Cuts and Jobs Act of 2017.
MERCK & CO., INC. CONSOLIDATED STATEMENT OF INCOME - GAAP (AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES) (UNAUDITED) Table 1 GAAP % Change GAAP % Change 2Q19 2Q18 June YTD2019 June YTD2018 Sales$
11,760
$
10,465
12%
$
22,575
$
20,502
10%
Costs, Expenses and Other
Cost of sales (1)
3,401
3,417
--
6,453
6,601
-2%
Selling, general and administrative (1)
2,712
2,508
8%
5,138
5,016
2%
Research and development (1)(2)
2,189
2,274
-4%
4,119
5,470
-25%
Restructuring costs (3)
59
228
-74%
212
323
-34%
Other (income) expense, net (1)
140
(48
)
*
327
(340
)
*
Income Before Taxes
3,259
2,086
56%
6,326
3,432
84%
Taxes on Income (1)
615
370
820
975
Net Income
2,644
1,716
54%
5,506
2,457
*
Less: Net (Loss) Income Attributable to Noncontrolling Interests (1)
(26
)
9
(79
)
14
Net Income Attributable to Merck & Co., Inc.
$
2,670
$
1,707
56%
$
5,585
$
2,443
*
Earnings per Common Share Assuming Dilution$
1.03
$
0.63
63%
$
2.15
$
0.90
*
Average Shares Outstanding Assuming Dilution
2,588
2,696
2,596
2,702
Tax Rate (4)
18.9
%
17.8
%
13.0
%
28.4
%
* 100% or greater (1) Amounts include the impact of acquisition and divestiture-related costs, restructuring costs and certain other items. See accompanying tables for details. (2) Research and development expenses in the second quarter and first six months of 2018 include a $344 million charge for the acquisition of Viralytics Limited. Research and development expenses in the first six months of 2018 also include a $1.4 billion charge related to the formation of a collaboration with Eisai Co., Ltd. (Eisai). (3) Represents separation and other related costs associated with restructuring activities under the company's formal restructuring programs. (4) The effective income tax rate for the first six months of 2019 reflects a net tax benefit of $360 million related to the settlement of certain federal income tax matters. The effective income tax rate for the first six months of 2018 reflects the unfavorable impact of a $1.4 billion pretax charge related to the formation of a collaboration with Eisai for which no tax benefit was recognized. MERCK & CO., INC. GAAP TO NON-GAAP RECONCILIATION SECOND QUARTER 2019 (AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES) (UNAUDITED) Table 2a GAAP Acquisition andDivestiture-Related Costs (1) RestructuringCosts (2) Certain OtherItems AdjustmentSubtotal Non-GAAP Cost of sales$
3,401
447
65
512
$
2,889
Selling, general and administrative
2,712
61
32
93
2,619
Research and development
2,189
4
3
7
2,182
Restructuring costs
59
59
59
-
Other (income) expense, net
140
148
48
196
(56
)
Income Before Taxes
3,259
(660
)
(159
)
(48
)
(867
)
4,126
Income Tax Provision (Benefit)
615
(109
)
(3)
(25
)
(3)
(11
)
(3)
(145
)
760
Net Income
2,644
(551
)
(134
)
(37
)
(722
)
3,366
Less: Net (Loss) Income Attributable to Noncontrolling Interests
(26
)
(36
)
(36
)
10
Net Income Attributable to Merck & Co., Inc.
2,670
(515
)
(134
)
(37
)
(686
)
3,356
Earnings per Common Share Assuming Dilution
$
1.03
(0.20
)
(0.05
)
(0.02
)
(0.27
)
$
1.30
Tax Rate
18.9
%
18.4
%
Only the line items that are affected by non-GAAP adjustments are shown. Merck is providing certain 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 results as it permits investors to understand how management assesses performance. Management uses these measures internally for planning and forecasting purposes and to measure the performance of the company along with other metrics. Senior management’s annual compensation is derived in part using non-GAAP income and non-GAAP EPS. This information should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. (1) Amount included in cost of sales primarily reflects $373 million of expenses for the amortization of intangible assets recognized as a result of business acquisitions, as well as $69 million of intangible asset impairment charges. Amount included in selling, general and administrative expenses primarily reflects integration, transaction and certain other costs related to business acquisitions and divestitures, including costs related to the acquisition of Antelliq Corporation. Amount included in other (income) expense, net primarily reflects goodwill impairment charges related to certain businesses in the Healthcare Services segment and expenses related to an increase in the estimated fair value of liabilities for contingent consideration related to the termination of the Sanofi-Pasteur MSD joint venture. (2) Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to activities under the company's formal restructuring programs. (3) Represents the estimated tax impact on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments. MERCK & CO., INC. GAAP TO NON-GAAP RECONCILIATION SIX MONTHS ENDED JUNE 30, 2019 (AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES) (UNAUDITED) Table 2b GAAP Acquisition andDivestiture-Related Costs (1) RestructuringCosts (2) Certain OtherItems AdjustmentSubtotal Non-GAAP Cost of sales$
6,453
860
99
959
$
5,494
Selling, general and administrative
5,138
60
32
92
5,046
Research and development
4,119
(27
)
3
(24
)
4,143
Restructuring costs
212
212
212
-
Other (income) expense, net
327
315
48
363
(36
)
Income Before Taxes
6,326
(1,208
)
(346
)
(48
)
(1,602
)
7,928
Income Tax Provision (Benefit)
820
(207
)
(3)
(56
)
(3)
(304
)
(4)
(567
)
1,387
Net Income
5,506
(1,001
)
(290
)
256
(1,035
)
6,541
Less: Net (Loss) Income Attributable to Noncontrolling Interests
(79
)
(89
)
(89
)
10
Net Income Attributable to Merck & Co., Inc.
5,585
(912
)
(290
)
256
(946
)
6,531
Earnings per Common Share Assuming Dilution
$
2.15
(0.36
)
(0.11
)
0.10
(0.37
)
$
2.52
Tax Rate
13.0
%
17.5
%
Only the line items that are affected by non-GAAP adjustments are shown. Merck is providing certain 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 results as it permits investors to understand how management assesses performance. Management uses these measures internally for planning and forecasting purposes and to measure the performance of the company along with other metrics. Senior management’s annual compensation is derived in part using non-GAAP income and non-GAAP EPS. This information should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. (1) Amount included in cost of sales primarily reflects $771 million of expenses for the amortization of intangible assets recognized as a result of business acquisitions, as well as $81 million of intangible asset impairment charges. Amount included in selling, general and administrative expenses primarily reflects integration, transaction and certain other costs related to business acquisitions and divestitures, including costs related to the acquisition of Antelliq Corporation. Amount included in research and development expenses primarily reflects a reduction in expenses related to a decrease in the estimated fair value measurement of liabilities for contingent consideration. Amount included in other (income) expense, net primarily reflects goodwill impairment charges related to certain businesses in the Healthcare Services segment and expenses related to an increase in the estimated fair value measurement of liabilities for contingent consideration, partially offset by royalty income related to the termination of the Sanofi-Pasteur MSD joint venture. (2) Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to activities under the company's formal restructuring programs. (3) Represents the estimated tax impact on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments. (4) Represents the estimated tax impact on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments. Also includes a $360 million net tax benefit related to the settlement of certain federal income tax matters and a $67 million tax charge related to the finalization of treasury regulations associated with the 2017 enactment of U.S. tax legislation. MERCK & CO., INC. FRANCHISE / KEY PRODUCT SALES (AMOUNTS IN MILLIONS) (UNAUDITED) Table 32019
2018
2Q
June YTD
1Q
2Q
June YTD
1Q
2Q
June YTD
3Q
4Q
Full Year
Nom %
Ex-Exch %
Nom %
Ex-Exch %
TOTAL SALES (1)$
10,816
$
11,760
$
22,575
$
10,037
$
10,465
$
20,502
$
10,794
$
10,998
$
42,294
12
15
10
13
PHARMACEUTICAL
9,663
10,460
20,123
8,919
9,282
18,201
9,658
9,830
37,689
13
17
11
15
Oncology Keytruda
2,269
2,634
4,903
1,464
1,667
3,131
1,889
2,151
7,171
58
63
57
62
Emend
117
121
237
125
148
273
123
126
522
-18
-15
-13
-10
Alliance Revenue – Lynparza (2)
79
111
190
33
44
76
49
62
187
154
159
149
155
Alliance Revenue – Lenvima (2)
74
97
171
35
35
43
71
149
177
182
* * Vaccines (3) Gardasil / Gardasil 9
838
886
1,724
660
608
1,269
1,048
835
3,151
46
50
36
40
ProQuad / M-M-R II / Varivax
496
675
1,171
392
426
818
525
455
1,798
58
61
43
46
RotaTeq
211
172
383
193
156
349
191
188
728
10
13
10
12
Pneumovax 23
185
170
355
179
193
372
214
322
907
-12
-10
-4
-3
Vaqta
47
58
105
37
65
101
66
72
239
-10
-8
4
6
Hospital Acute Care Bridion
255
278
533
204
240
444
217
256
917
16
20
20
25
Noxafil
190
193
383
176
188
363
188
191
742
3
7
5
10
Cubicin
88
67
155
98
94
192
95
80
367
-29
-25
-19
-16
Invanz
72
78
150
151
149
300
137
59
496
-48
-44
-50
-46
Primaxin
59
71
130
72
68
140
72
53
265
5
12
-7
-2
Cancidas
61
67
129
91
87
178
79
69
326
-22
-17
-28
-23
Immunology Simponi
208
214
422
231
233
464
210
220
893
-8
-1
-9
-2
Remicade
123
98
221
167
157
324
135
123
582
-37
-32
-32
-26
Neuroscience Belsomra
67
76
143
54
71
125
66
69
260
8
9
15
16
Virology Isentress / Isentress HD
255
247
502
281
305
586
275
280
1,140
-19
-13
-14
-8
Zepatier
114
108
221
131
113
243
104
108
455
-5
0
-9
-5
Cardiovascular Zetia
140
156
296
305
226
531
165
162
857
-31
-28
-44
-42
Vytorin
97
76
174
167
155
322
92
83
497
-51
-47
-46
-42
Atozet
94
92
186
73
101
174
84
89
347
-9
-3
7
14
Adempas
90
104
194
68
75
143
94
91
329
39
43
36
40
Diabetes (4) Januvia
824
908
1,732
880
949
1,829
927
930
3,686
-4
-2
-5
-3
Janumet
530
533
1,063
544
585
1,129
563
535
2,228
-9
-5
-6
-1
Women's Health NuvaRing
219
240
459
216
236
452
234
216
902
2
3
2
3
Implanon / Nexplanon
199
183
382
174
174
348
186
169
703
6
8
10
12
Diversified Brands Singulair
191
160
352
175
185
360
161
187
708
-13
-8
-2
3
Cozaar / Hyzaar
103
109
213
120
125
245
103
105
453
-13
-7
-13
-8
Nasonex
96
72
168
122
81
203
71
102
376
-11
-6
-17
-13
Arcoxia
75
75
149
83
84
166
83
86
335
-11
-5
-10
-4
Follistim AQ
57
63
121
67
70
138
60
70
268
-10
-6
-12
-9
Other Pharmaceutical (5)
1,140
1,268
2,406
1,186
1,189
2,378
1,109
1,215
4,705
7
11
1
6
ANIMAL HEALTH
1,025
1,124
2,149
1,065
1,090
2,155
1,021
1,036
4,212
3
9
0
6
Livestock
611
671
1,282
652
633
1,286
660
684
2,630
6
13
0
7
Companion Animals
414
453
867
413
457
869
361
352
1,582
-1
4
0
5
Other Revenues (6)
128
176
303
53
93
146
115
132
393
88
-62
107
-82
* 200% or greater Sum of quarterly amounts may not equal year-to-date amounts due to rounding. (1) Only select products are shown. (2) Alliance Revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs. (3) Total Vaccines sales were $1,887 million and $2,037 million in the first and second quarters of 2019, respectively, and $1,561 million, $1,533 million, $2,159 million and $2,008 million for the first, second, third and fourth quarters of 2018, respectively. (4) Total Diabetes sales were $1,402 million and $1,480 million in the first and second quarters of 2019, respectively, and $1,433 million, $1,571 million, $1,506 million and $1,485 million for the first, second, third and fourth quarters of 2018, respectively. (5) Includes Pharmaceutical products not individually shown above. (6) Other Revenues are comprised primarily of Healthcare Services segment revenues, third-party manufacturing sales and miscellaneous corporate revenues, including revenue hedging activities.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190730005360/en/
Media: Jessica Fine (908) 740-1707
Pamela Eisele (267) 305-3558
Investors: Teri Loxam (908) 740-1986
Michael DeCarbo (908) 740-1807
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