Merck & Co Points to Six Filings During 2012–13 Period in Q2 Results
United States drug firm Merck & Co on 27 July recorded 1% year-on-year growth in top-line revenue sales as the company gave increased visibility to its pipeline and highlighted the six major filings that it expects over the 2012–13 horizon, including suvorexant and odanacatib.
IHS Global Insight Perspective
Merck & Co's quarterly results again highlight the unusually significant impact from exchange rate fluctuations—this impacted the top-line to the tune of four percentage points. International sales are also struggling amid the impact of austerity measures in Europe.
This means that for Merck—like many of its US compatriots—it is a story of relative cost containment. Although research and development spend was up to account for the push in the company's late-stage pipeline as well as the impact of the Endocyte transaction, other spend was down, resulting in organic growth of 16% to USD2.9 billion.
Merck confirmed that results for the key IMPROVE-IT trial, of which there is wide-ranging uncertainty over potential positive outcomes, will be clarified in March 2013 instead of the previously expected year-end 2012. Suvorexant is on track for an FDA filing in the second half of the year, with odanacatib due for a filing in the US and Europe in early 2013, and Japan in the third quarter of next year. Merck also confirmed expected filings for Bridion (sugammadex), V503 (a nine-valent vaccine for human papillomavirus HPV), Tredaptive (extended release niacin/laropiprant) for lipid management, and vintafolide in ovarian cancer by the end of 2013.
Merck & Co Q2 Results (USD Mil.)
GAAP Net Income
Marketing and Administrative Spend
Material and Production Spend
Source: Merck & Co except *IHS Global Insight
United States drug firm Merck & Co on 27 July recorded 1% year-on-year (y/y) growth in top-line revenue sales to USD12.3 billion for the second quarter, driven by a slightly stronger-than-expected performance of its core pharmaceutical sales division, which reached USD10.6 billion. As with most drug firms, Merck suffered from a strong exchange rate impact, and if this was removed from the equation, overall sales were up 5%.
On the expense side, Merck again held a relatively tight policy on costs—much like its other US compatriots who have recorded their quarterly results so far. Research and development (R&D) spend inched up to USD2.2 billion, but marketing and production spend were held significantly back. This resulted in overall net income growth of 9.4% to USD3.2 billion on a non-generally accepted accounting practices (GAAP) basis, though it was an 11% decline to USD1.8 billion on a GAAP basis. Merck's organic growth for the quarter as calculated by IHS Global Insight was 15.8%% to USD2.86 billion. Merck's results are available here.
Merck's sales were again driven by a very strong performance of diabetes drug Januvia/Janumet (sitagliptin), with sales up 36% in the core Januvia franchise to reach blockbuster status for the quarter for the first time. Elsewhere in the product portfolio, Gardasil (HPV) and Isentress (raltegravir) also showed strong growth to offset the impact of declines in the Cozaar/Hyzaar (losartan) franchise. New hepatitis C drug Victrelis (boceprevir) recorded quarterly sales of USD126 million.
Merck & Co Q2 Product Sales (USD Mil.)
% Change Y/Y
Source: Merck & Co
Outlook and Implications
Merck confirmed that results for the key IMPROVE-IT trial, of which there is wide-ranging uncertainty over potential positive outcomes, will be clarified in March 2013 instead of the previously expected year-end 2012. Suvorexant is on track for an FDA filing in the second half of the year, with odanacatib due for a filing in the US and Europe in early 2013, and Japan in the third quarter of next year. Merck also confirmed expected filings for Bridion (sugammadex), V503 (a nine-valent vaccine for human papillomavirus, HPV), Tredaptive (extended release niacin/laropiprant) for lipid management, and vintafolide in ovarian cancer by the end of 2013.
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