Merck Announces Third-Quarter 2013 Financial Results
WHITEHOUSE STATION, N.J.--(BUSINESS WIRE)--Merck (NYSE:MRK), known as MSD outside the United States and Canada, today announced financial results for the third quarter of 2013.
Non-GAAP (generally accepted accounting principles) earnings per share (EPS) for the third quarter of $0.92 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.
“This quarter we delivered solid financial results, with strong contributions from our vaccine, immunology and HIV businesses, and effective cost management,” said Kenneth C. Frazier, chairman and chief executive officer, Merck. “We are improving productivity and focusing our R&D and commercial resources more precisely to enable our investments in the best opportunities for innovation and growth. We are encouraged that our combination hepatitis C regimen has joined our anti-PD-1 immunotherapy in being designated as a ‘breakthrough therapy’ by the FDA.”
Select Revenue Highlights
Worldwide sales were $11.0 billion for the third quarter of 2013, a decrease of 4 percent compared with the third quarter of 2012, including a 2 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.
Pharmaceutical Revenue Performance
Third-quarter pharmaceutical sales declined 4 percent to $9.5 billion, including a 2 percent negative impact due to foreign exchange. Declines of SINGULAIR (montelukast sodium), MAXALT (rizatriptan benzoate), TEMODAR (temozolomide) and COZAAR (losartan potassium)/HYZAAR (losartan potassium and hydrochlorothiazide) following loss of market exclusivity were partially offset by growth of REMICADE (infliximab), GARDASIL [Human Papillomavirus Quadrivalent (Types 6, 11, 16 and 18) Vaccine, Recombinant], SIMPONI (golimumab) and ISENTRESS (raltegravir).
Sales from emerging markets decreased 4 percent, including a 6 percent negative impact from foreign exchange. Emerging market sales accounted for approximately 20 percent of pharmaceutical sales in the third quarter of 2013 with strong growth in Brazil, Korea, Russia and Turkey, offset by declines in China and Mexico.
Worldwide sales of the combined diabetes franchise of JANUVIA (sitagliptin)/JANUMET (sitagliptin and metformin HCI) decreased 1 percent to $1.4 billion in the third quarter, including a 3 percent negative impact from foreign exchange. Sales decreases in the United States due to reduced customer inventory levels, and in Japan due to foreign exchange, were partially offset by growth in Europe and the emerging markets.
Sales of ZETIA (ezetimibe) and VYTORIN (ezetimibe/simvastatin), medicines for lowering LDL cholesterol, decreased 1 percent to $1.1 billion in the third 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 and SIMPONI, treatments for inflammatory diseases, increased 22 percent, including a 6 percent positive impact from foreign exchange, to $700 million in the third quarter of 2013.
ISENTRESS, an HIV integrase inhibitor for use in combination with other antiretroviral agents for the treatment of HIV-1 infection, grew 7 percent to $427 million in the third quarter driven by growth in all regions.
Merck’s sales of GARDASIL, a vaccine to help prevent certain diseases caused by four types of human papillomavirus (HPV), were $665 million, an increase of 15 percent for the quarter. The increase was driven by higher sales in the United States, which reflects continued strong uptake of use in males, as well as higher public sector sales of approximately $60 million. The increase was partially offset by lower sales in Japan due to the government’s decision to suspend proactive recommendation of HPV vaccines in the country.
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 53 percent to $280 million in the third quarter. The patents for SINGULAIR expired in the United States in August 2012 and expired in major European markets in February 2013. The company has experienced a significant and rapid reduction in sales in these markets.
Animal Health Revenue Performance
Animal Health sales totaled $800 million for the third quarter of 2013, a 2 percent decline compared with the third quarter of 2012, including a 2 percent negative impact due to foreign exchange. The quarter was negatively affected by the previously announced voluntary suspension of sales of ZILMAX (zilpaterol hydrochloride), the company’s feed supplement for cattle, in the United States and Canada. The negative impact was partially offset by higher sales of companion animal and swine products.
Consumer Care Revenue Performance
Third-quarter global sales of Consumer Care were $443 million, a decrease of 2 percent compared to the third quarter of 2012, including a 2 percent negative impact due to foreign exchange. Sales were positively affected by the launch of OXYTROL FOR WOMEN, the only over-the-counter medicine to treat overactive bladder, but were offset by lower sales in the DR. SCHOLL’S footcare line.
Other Revenue Performance
Other revenues – primarily comprising alliance revenue, miscellaneous corporate revenues and third-party manufacturing sales – decreased 9 percent to $315 million compared to the third quarter of 2012. The decrease was primarily driven by lower revenue from AstraZeneca LP (AZLP) recorded by Merck, which decreased 14 percent to $220 million as compared with the third quarter 2012.
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