Merck Announces Second Quarter 2011 Financial Results

 

  • Double-Digit Non-GAAP EPS Growth in Second Quarter 2011: Non-GAAP EPS of $0.95; GAAP EPS of $0.65
  • Total Company and Pharmaceutical Sales Grow by 7 Percent, Including Foreign Exchange
  • Double-Digit Global Growth Continues for JANUVIA, JANUMET, REMICADE, and ISENTRESS
  • VICTRELIS and Other Product Launches Underway
  • Company Raises Lower End of its 2011 Non-GAAP EPS Range; Provides New Range of $3.68 to $3.76; Also Updates GAAP EPS Range to $1.95 to $2.17

• Company Announces New Phase of Merger Restructuring Program

 

WHITEHOUSE STATION, N.J.--(BUSINESS WIRE)--Merck (NYSE: MRK), known as MSD outside the United States and Canada, today announced financial results for the second quarter of 2011.


Second
Quarter

2011
 
 

Second
Quarter

2010
 


Sales

 

 

 

$

12,151

 

$

11,346

 

GAAP EPS

 

 

 

 

0.65

 

 

0.24

 


Non-GAAP EPS that excludes items listed below 1
 
 

 

 

 

0.95

 

 

0.86

 


GAAP Net Income 2
 
 

 

 

 

2,024

 

 

752

 


Non-GAAP Net Income that excludes items listed below 1, 2
 
 

 

 

 

2,950

 

 

2,708


Non-GAAP (generally accepted accounting principles) earnings per share (EPS) for the second quarter of $0.95 excludes acquisition-related costs, restructuring costs and the benefit of certain tax items.

A reconciliation of GAAP to non-GAAP net income and EPS is provided in the tables that follow.

 

 

 

 

 

 

 

 

 

 

Second
Quarter

2011
 
 

Second
Quarter

2010
 

 


$ in millions, except EPS amounts

 

 


Net

Income 2
 
 

EPS

  


Net

Income 2
 
 

EPS

 

 

 GAAP

 

 

$

2,024

 

$

0.65

 

 

$

752

 

$

0.24

 

 

 

Difference

 

 

 

926

 

 


0.30


 3
 
 

 


1,956

 

 


0.62


 3
 

 


Non-GAAP that excludes items listed below

 

 

$

2,950

 

$

0.95

 

 

$

2,708

 

$

0.86

 

 

 

 


 

 

 

 

 

$ in millions

 

Second
Quarter

2011
 
 

Second
Quarter

2010
 

 

Acquisition-related costs 4
 
 

$

1,440

 

 

$

1,747

 

 

Costs related to restructuring programs

 

 

816

 

 

 

894

 

 

Gain on AstraZeneca's asset option exercise

 

 

-

 

 

 

(443

)

 

Other

 

 

7

 

 

 

-

 

 

Net decrease (increase) in income before taxes

 

 

2,263

 

 

 

2,198

 

 


Income tax (benefit) expense 5
 
 

 

(1,337

)

 

 

(242

)

 

Decrease (increase) in net income

 

$

926

 

 

$

1,956

 


Year-to-date results can be found in the attached financial tables.

"Double-digit growth from key products, and successful new product launches in markets worldwide led to Merck's strong second quarter results," said Kenneth C. Frazier, president and chief executive officer. "We're delivering on our promise to grow both the top and bottom lines while continuing our efforts to streamline and transform Merck.

"By improving the effectiveness and efficiency of our operations and focusing on scientific innovation, we are well-positioned for sustained and profitable growth in the future."

Update to Merger Restructuring Program

 Merck said today that it remains on track to achieve its goal of $3.5 billion in annual cost synergies by the end of 2012.

The company said it will more aggressively reduce its cost structure so Merck can continue to invest in long term profitable growth opportunities while driving a more efficient operating model. As a result, Merck announced the next phase of its Merger Restructuring Program today. As part of this next phase, the company expects to reduce its workforce, as measured at December 31, 2009, by an additional 12 to 13 percent by the end of 2015. At the same time, Merck said it will continue to hire new employees in strategic growth areas of the business such as emerging markets.

"Merck is taking these difficult actions so that we can grow profitably and continue to deliver on our mission well into the future," said Frazier. "The environment we operate in is changing rapidly and dramatically, and these steps will help us more efficiently serve customers and patients around the world."

By the end of 2015, Merck now expects the overall Merger Restructuring Program to yield annual ongoing savings of $4.0 billion to $4.6 billion from the original estimate of $2.7 billion to $3.1 billion. Total cumulative pretax costs for the Program are estimated to range between $5.8 billion to $6.6 billion.

Select Revenue Highlights

 Worldwide sales were $12.2 billion for the second quarter of 2011, the highest quarterly sales total for the combined company and an increase of 7 percent compared with the second quarter of 2010. Foreign exchange for the quarter favorably affected global sales performance by 4 percent. The revenue increase largely reflects strong sales of JANUVIA (sitagliptin), JANUMET (sitagliptin/metformin hydrochloride), REMICADE (infliximab), SINGULAIR (montelukast sodium), ISENTRESS (raltegravir), GARDASIL [Human Papillomavirus Quadrivalent (Types 6, 11, 16 and 18) Vaccine, Recombinant], and ZOSTAVAX (zoster vaccine live). Pharmaceutical sales from emerging markets accounted for 18 percent of sales in the quarter.

The table below 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

2011
 
 

Second
Quarter

2010
 
 


Change
 

 


Total Sales

 

 

 

$

12,151

 

$

11,346

 

7%

 

 


Pharmaceutical 6
 
 

 

 

 

10,360

 

 

9,638

 

7%

 

 

SINGULAIR

 

 

 

 

1,354

 

 

1,258

 

8%

 

 

REMICADE

 

 

 

 

842

 

 

669

 

26%

 

 

JANUVIA

 

 

 

 

779

 

 

600

 

30%

 

 

ZETIA

 

 

 

 

592

 

 

564

 

5%

 

 

VYTORIN

 

 

 

 

459

 

 

490

 

-6%

 

 

COZAAR/HYZAAR

 

 

 

 

406

 

 

485

 

-16%

 

 

ISENTRESS

 

 

 

 

337

 

 

267

 

26%

 

 

NASONEX

 

 

 

 

323

 

 

338

 

-4%

 

 

JANUMET

 

 

 

 

321

 

 

218

 

47%

 

 

GARDASIL

 

 

 

 

277

 

 

219

 

27%

 

 

Animal Health

 

 

 

 

802

 

 

731

 

10%

 

 

Consumer Care 6

  

 

 

 

541

 

 

544

 

-1%

 

 


Other Revenues 7
 
 

 

 

 

448

 

 

433

 

3%

 


The combined diabetes franchise of JANUVIA/JANUMET grew 35 percent to $1.1 billion in the second quarter of 2011.

Worldwide sales of SINGULAIR, a once-a-day oral medicine indicated for the chronic treatment of asthma and the relief of symptoms of allergic rhinitis, grew 8 percent from the second quarter of 2010 to $1.4 billion, driven by Japan and the United States.

Global sales grew 26 percent in the quarter for REMICADE, a treatment for inflammatory diseases, due to growth in Europe, Canada and the emerging markets, as well as increases in gastrointestinal indications for the treatment of ulcerative colitis and Crohn's disease. Under an agreement reached in the second quarter, Merck has transferred exclusive marketing rights for REMICADE and SIMPONI (golimumab) to Johnson & Johnson in territories including Canada, Central and South America, the Middle East, Africa and Asia Pacific, effective July 1, 2011. Merck retains exclusive marketing rights to these products throughout Europe, Russia and Turkey.

ISENTRESS, an HIV integrase inhibitor for use in combination with other antiretroviral agents for the treatment of HIV-1 infection, grew 26 percent in the second quarter driven by demand in the United States and Europe.

As expected, global sales of Merck's antihypertensive medicines COZAAR (losartan potassium) and HYZAAR (losartan potassium and hydrochlorothiazide) continue to decline following loss of marketing exclusivity for these products in the United States and in major European markets. Sales of TEMODAR (temozolomide), a treatment for certain types of brain tumors, declined due to generic competition in Europe.

Sales of ZOSTAVAX were $122 million in the quarter as a significant number of backorders were filled. The company anticipates that backorders will continue until inventory levels are sufficient to meet market demand.

Product Performance - Animal Health

 Merck Animal Health sales totaled $802 million for the second quarter of 2011, a 10 percent increase over the same period last year, including an 8 percent contribution from foreign exchange. Animal Health had strong second-quarter performance across all regions. The growth was primarily led by increased sales of new products in cattle, companion animal and poultry. 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.

Product Performance - Consumer Care

 Merck Consumer Care second-quarter global sales were comparable to the second quarter of 2010, reflecting declines in CLARITIN due to a weak allergy season that were partially offset by increases in suncare. Consumer Care includes a variety of over-the-counter medicines, as well as footcare and suncare products.

Second Quarter Expense and Other Information

 The costs detailed below on a GAAP basis during the second quarter of 2011 totaled $10.4 billion and include $2.3 billion of acquisition-related costs and restructuring costs.

 

 

 

 

 

$ in millions

 

Included in the expense for the period

 

Second Quarter 2011

  

GAAP

  


Acquisition-
Related Costs 4
 
 


Restructuring Costs
 
 


Non-GAAP 1
 


Materials and production

 

$

4,284

 

$

1,344

 

$

109

 

$

2,831

 

Marketing and administrative

 

 

3,525

 

 

77

 

 

23

 

 

3,425

 

Research and development

 

 

1,936

 

 

19

 

 

16

 

 

1,901

 

Restructuring costs

 

 

668

 

 

-

 

 

668

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Second Quarter 2010

  

 

 

 

 

 

 

 

 

Materials and production

 

$

4,549

 

$

1,662

 

$

224

 

$

2,663

 

Marketing and administrative

 

 

3,175

 

 

75

 

 

-

 

 

3,100

 

Research and development

 

 

2,179

 

 

-

 

 

144

 

 

2,035

 

Restructuring costs

 

 

526

 

 

-

 

 

526

 

 

-


The gross margin was 64.7 percent for the second quarter of 2011 and 59.9 percent for the second quarter of 2010, reflecting 12.0 and 16.6 percentage point unfavorable impacts, respectively, from the acquisition-related costs and restructuring costs noted above.

Equity income from affiliates was $55 million in the second quarter. Equity income from affiliates primarily includes the AstraZeneca LP, Johnson & Johnson°Merck Consumer Pharmaceuticals Company, and Sanofi Pasteur MSD partnerships.

Other (income) expense, net was $121 million of expense in the second quarter of 2011 compared with $281 million of income in the second quarter of 2010. The second quarter of 2010 reflects $443 million of income recognized upon AstraZeneca's asset option exercise.

The GAAP tax benefit for the second quarter of 2011 primarily reflects a net favorable impact of approximately $700 million relating to the settlement of the company's 2002 to 2005 federal income tax audit, as well as a favorable impact of certain foreign and state tax rate changes that resulted in a net $230 million reduction of deferred tax liabilities on intangibles established in purchase accounting. The non-GAAP effective tax rate, which excludes the impact of these items as well as acquisition-related costs, restructuring costs, and certain other items, was 24.3 percent for the quarter.

Key Developments

New Drug Approvals

  • VICTRELIS (boceprevir), the company's oral hepatitis C protease inhibitor, was approved by the U.S. Food and Drug Administration (FDA) and in Europe by the European Medicines Agency. The U.S. launch of VICTRELIS is underway. Separately, the company entered into strategic agreements with Roche to market VICTRELIS globally to physicians as part of a triple combination therapy regimen.

• The Japanese Ministry of Health, Labour and Welfare approved three products - GARDASIL, ZOLINZA (vorinostat), and CUBICIN (daptomycin for injection).

 

Other Pipeline Updates

  • Supplemental New Drug Applications (sNDAs) for the cholesterol-lowering medicines VYTORIN (ezetimibe/simvastatin) and ZETIA (ezetimibe) have been accepted for standard review by the FDA. The sNDAs seek indications for VYTORIN, and for ZETIA when used in combination with simvastatin, for the prevention of major cardiovascular events in patients with chronic kidney disease.
  • An sNDA for DULERA (mometasone furoate and formoterol fumarate dihydrate) for the treatment of chronic obstructive pulmonary disease (COPD) has been accepted for review by the FDA. DULERA is currently indicated in the United States for the treatment of asthma.
  • Merck is discontinuing the clinical development program for telcagepant, the company's investigational calcitonin gene-related peptide receptor antagonist for the treatment of acute migraine. The decision is based on an assessment of data across the clinical program, including findings from a recently completed six-month Phase III study.

• The company received a Complete Response letter from the FDA for the extended release formulation of JANUMET related to the resolution of pre-approval inspection issues. Merck is responding to the questions raised by the FDA.

 

Business Development

  • The company and China's Simcere Pharmaceutical Group announced last week the establishment of a joint venture that will serve China's rapidly expanding healthcare needs by providing significantly improved access to quality medicines in major therapeutic areas.
  • Merck and Hanwha Chemical Corporation entered into an exclusive global agreement to develop and commercialize a candidate biosimilar form of Enbrel® (etanercept).

• Earlier this week Merck announced the acquisition of exclusive rights to develop and commercialize the investigational intravenous formulation of vernakalant (vernakalant i.v.) in Canada, Mexico and the United States. The company now has secured worldwide rights to vernakalant i.v., which is currently approved in the EU for rapid conversion of recent onset atrial fibrillation to sinus rhythm and has launched in more than 10 European countries.

 

Financial Targets

 The company raised the lower end of its 2011 non-GAAP EPS range and is now targeting a range of $3.68 to $3.76 and a 2011 GAAP EPS target range of $1.95 to $2.17. The 2011 non-GAAP range excludes acquisition-related costs, costs related to restructuring programs, the benefit of certain tax items, a charge related to the resolution of the arbitration proceeding with Johnson & Johnson, and certain other items.

Merck continues to expect full year 2011 revenue to grow in the low- to mid-single digit percent range from a base of $46.0 billion in 2010.

In addition, the company lowered the top end of its non-GAAP R&D expense target to a range of $8.0 billion to $8.3 billion for the full year of 2011.

The company updated its anticipated consolidated non-GAAP 2011 tax rate to a range of 23 to 24 percent.

A reconciliation of anticipated 2011 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 2011

 

 GAAP EPS

 

 

 

$1.95 to $2.17

 

Difference 3

  

 

 

1.73 to 1.59

 

Non-GAAP EPS that excludes items listed below

 

 

 

$3.68 to $3.76

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition-related costs 4

  

 

 

$5,600 to $5,250

 

Costs related to restructuring programs

 

 

 

1,500 to 1,300

 

Arbitration settlement charge

 

 

 

500

 


Other 8
 
 

 

 

(127)

 

Net decrease (increase) in income before taxes

 

 

 

7,473 to 6,923

 

Income tax (benefit) expense 5

  

 

 

(2,109) to (1,993)

 

Decrease (increase) in net income

 

 

 

$5,364 to $4,930


Total Employees

 As of June 30, 2011, Merck had approximately 91,000 employees worldwide.

Earnings Conference Call

 Investors are invited to a live audio webcast of Merck's second quarter earnings conference call today at 8:00 a.m. EDT by visiting Merck's Web site, 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. Journalists are invited to monitor the call by dialing (706) 758-9928 or (800) 399-7917. A replay of the call will be available starting at 11 a.m. EDT today for approximately one week. To listen to the replay, dial (706) 645-9291 or (800) 642-1687 and enter ID No. 76798557.

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 policies, programs and partnerships. For more information, visit www.merck.com.

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. Such statements may include, but are not limited to, statements about the benefits of the merger between Merck and Schering-Plough, including future financial and operating results, the combined company's plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of Merck's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.

The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the possibility that the expected synergies from the merger of Merck and Schering-Plough will not be realized, or will not be realized within the expected time period; the impact of pharmaceutical industry regulation and health care legislation; the risk that the businesses will not be integrated successfully; disruption from the merger making it more difficult to maintain business and operational relationships; Merck's ability to accurately predict future market conditions; dependence on the effectiveness of Merck's patents and other protections for innovative products; the risk of new and changing regulation and health policies in the U.S. and internationally and the exposure to 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 2010 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 Merck is providing certain 2011 and 2010 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 a description of the items, see Table 2a, including the related footnotes, attached to this release.

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

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.

4 Includes expenses for the amortization of intangible assets and amortization of purchase accounting adjustments to inventories recognized as a result of the merger, as well as intangible asset impairment charges. Also includes integration and other costs associated with mergers and acquisitions.

5 Includes an estimated income tax (benefit) expense on the reconciling items. In addition, amount for 2011 includes the net favorable impact of approximately $700 million relating to the settlement of a federal income tax audit, as well as the favorable impact of certain foreign and state tax rate changes that resulted in a net $230 million reduction of deferred tax liabilities on intangibles established in purchase accounting.

6 In the first quarter of 2011, Merck changed the reporting for certain over-the-counter products. Sales of these products outside the United States were previously recorded in the Pharmaceutical business, and are now reported in the Consumer Care business. Prior period amounts have been recast on a comparative basis.

7 Other revenues are primarily comprised of alliance revenue, miscellaneous corporate revenues and third party manufacturing sales. Revenue from AstraZeneca LP recorded by Merck was $306 million in the second quarter of 2011.

8 Represents a gain on the sale of certain manufacturing facilities and related assets reflected in other (income) expense, net.

 

 

 

 


MERCK & CO., INC.
CONSOLIDATED STATEMENT OF OPERATIONS - GAAP
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)
(UNAUDITED)
Table 1
 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

 


% Change
 

 


GAAP

 


% Change
 

 

 

 

 

 


2Q11

  

2Q10

 

 

 

YTD 2011

  

YTD 2010

 

 

 

 Sales

 

 

 

$

12,151

 

 

$

11,346

 

 

7%

 

 

$

23,732

 

 

$

22,768

 

 

4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs, Expenses and Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Materials and production (1)

 

 

 

 

 4,284

 

 

 

4,549

 

 

-6%

 

 

 

8,343

 

 

 

9,764

 

 

-15%

 

 

Marketing and administrative (1) / (2)

 

 

 

 

 3,525

 

 

 

3,175

 

 

11%

 

 

 

6,689

 

 

 

6,397

 

 

5%

 

 

Research and development (1) / (2)

 

 

 

 

 1,936

 

 

 

2,179

 

 

-11%

 

 

 

4,094

 

 

 

4,230

 

 

-3%

 

 

Restructuring costs (3)

 

 

 

 

 668

 

 

 

526

 

 

27%

 

 

 

654

 

 

 

814

 

 

-20%

 

 

Equity income from affiliates (4)

 

 

 

 

 (55

)

 

 

(43

)

 

28%

 

 

 

(193

)

 

 

(180

)

 

7%

 

 

Other (income) expense, net (1) / (5)

 

 

 

 

 121

 

 

 

(281

)

 

*

 

 

 

744

 

 

 

(113

)

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Before Taxes

 

 

 

 

1,672

 

 

 

1,241

 

 

35%

 

 

 

3,401

 

 

 

1,856

 

 

83%

 

 

Income Tax (Benefit) Provision

 

 

 

 

(382

)

 

 

461

 

 

 

 

 

 

276

 

 

 

746

 

 

 

 

 

Net Income

 

 

 

 

2,054

 

 

 

780

 

 

*

 

 

 

3,125

 

 

 

1,110

 

 

*

 

 

Less: Net Income Attributable to Noncontrolling Interests

 

 

 

 

30

 

 

 

28

 

 

 

 

 

 

58

 

 

 

59

 

 

 

 

 

Net Income Attributable to Merck & Co., Inc.

 

 

 

$

2,024

 

 

$

752

 

 

*

 

 

$

3,067

 

 

$

1,051

 

 

*

 

 

Earnings per Common Share Assuming Dilution (6)

 

 

 

 $

0.65

 

 

$

0.24

 

 

*

 

 

$

0.98

 

 

$

0.33

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Shares Outstanding Assuming Dilution

 

 

 

 

3,110

 

 

 

3,125

 

 

 

 

 

 

3,106

 

 

 

3,132

 

 

 

 

 

Tax Rate (7)

 

 

 

  

-22.8

%

 

 

37.1

%

 

 

 

 

 

8.1

%

 

 

40.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*≥ 100%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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

 

 

 

(2) The second quarter and first six months of 2010 include a reclassification of certain expenses from marketing and administrative to research and development of $28 million and $52 million, respectively.

 

 

 

(3) Represents separation and other related costs associated with restructuring activities.

 

 

 

(4) Primarily reflects equity income from the AstraZeneca LP, Johnson & JohnsonºMerck Consumer Pharmaceuticals Company, and Sanofi Pasteur MSD partnerships.

 

 

 

(5) Other (income) expense, net in the first six months of 2011 includes a charge of $500 million related to the resolution of the arbitration proceeding with Johnson & Johnson and a $127 million gain on the sale of certain manufacturing facilities and related assets. Other (income) expense, net in the second quarter and first six months of 2010 includes $443 million of income recognized upon AstraZeneca's asset option exercise. In addition, other (income) expense, net in the first six months of 2010 reflects $102 million of income on the settlement of certain disputed royalties.

 

 

 

(6) The company calculates earnings per share pursuant to the two-class method which requires the allocation of net income between common shareholders and participating security holders. Net income attributable to Merck & Co., Inc. common shareholders used to calculate earnings per common share assuming dilution was $2,020 million and $749 million for the second quarter of 2011 and 2010, respectively, and was $3,059 million and $1,047 million for the first six months of 2011 and 2010, respectively.

 

 

 

(7) The GAAP effective tax rates for the second quarter and first six months of 2011 were (22.8)% and 8.1%, respectively, which reflect the net favorable impact of approximately $700 million related to the settlement of the company's 2002-2005 federal income tax audit and the favorable impact of certain foreign and state tax rate changes that resulted in a net $230 million reduction of deferred tax liabilities on intangibles established in purchase accounting. Excluding these items and the other non-GAAP reconciling items detailed in the accompanying tables, the effective tax rates were 24.3% and 24.9% for the second quarter and first six months of 2011, respectively. The GAAP effective tax rates for the second quarter and first six months of 2010 were 37.1% and 40.2%, respectively. Excluding the impact of the non-GAAP reconciling items detailed in the accompanying tables, the effective tax rates were 20.5% and 21.7% for the second quarter and first six months of 2010, respectively.

 

 

 

 


 

 


MERCK & CO., INC.
CONSOLIDATED STATEMENT OF OPERATIONS
GAAP TO NON-GAAP RECONCILIATION
SECOND QUARTER 2011
(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

 

 

 

$

12,151

 

 

 

 

 

 

 

 

 $

-

 

 

 

$

12,151

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Materials and production

 

 

 

 

4,284

 

 

 1,344

 

 

109

 

 

 

 

 

1,453

 

 

 

 

2,831

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketing and administrative

 

 

 

 

3,525

 

 

 77

 

 

23

 

 

 

 

 

100

 

 

 

 

3,425

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

 

 

1,936

 

 

 19

 

 

16

 

 

 

 

 

35

 

 

 

 

1,901

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring costs

 

 

 

 

668

 

 

 

 

 668

 

 

 

 

 

668

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity income from affiliates

 

 

 

 

(55

)

 

 

 

 

 

 

 

 

-

 

 

 

 

(55

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (income) expense, net

 

 

 

 

121

 

 

 

 

 

 

 7

 

 

 

7

 

 

 

 

114

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Before Taxes

 

 

 

 

1,672

 

 

 (1,440

)

 

(816

)

 

(7

)

 

 

(2,263

)

 

 

 

3,935

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxes on Income

 

 

 

 

(382

)

 

 

 

 

 

 

 

 

 (1,337

)


 (3)
 

 


955

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

 

 

 

2,054

 

 

 

 

 

 

 

 

 

 (926

)

 

 

 

2,980

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Net Income Attributable to Noncontrolling Interests

 

 

 

 

30

 

 

 

 

 

 

 

 

 

-

 

 

 

 

30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income Attributable to Merck & Co., Inc.

 

 

 

$

2,024

 

 

 

 

 

 

 

 

 $

(926

)

 

 

$

2,950

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Common Share Assuming Dilution

 

 

 

$

0.65

 

 

 

 

 

 

 

 

 

 

 

 $

0.95

 


 (4)
 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Shares Outstanding Assuming Dilution

 

 

 

 

3,110

 

 

 

 

 

 

 

 

 

 

 

 

 3,110

 

 

 

 

Tax Rate

 

 

 

 

-22.8

%

 

 

 

 

 

 

 

 

 

 

  

24.3

%

 

 

 


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 and the amortization of purchase accounting adjustments to inventories recognized as a result of the merger, as well as $118 million of impairment charges on product intangibles. Amounts included in marketing and administrative expenses reflect integration costs, as well as other costs associated with mergers and acquisitions, such as severance costs which are not part of the company's formal restructuring programs. 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) Includes a net benefit of approximately $700 million relating to the settlement of the company's 2002-2005 federal income tax audit, the favorable impact of certain foreign and state tax rate changes that resulted in a net $230 million reduction of deferred tax liabilities on intangibles established in purchase accounting, as well as the estimated tax impact on the reconciling items.

 

 

 

(4) The company calculates earnings per share pursuant to the two-class method which requires the allocation of net income between common shareholders and participating security holders. Net income attributable to Merck & Co., Inc. common shareholders used to calculate non-GAAP earnings per common share assuming dilution was $2,942 million for the second quarter of 2011.

 

 

 

 


 

 

MERCK & CO., INC.
CONSOLIDATED STATEMENT OF OPERATIONS

GAAP TO NON-GAAP RECONCILIATION

SIX MONTHS ENDED JUNE 30, 2011

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2b
 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

 


Acquisition-
Related Costs (1)
 

 

Restructuring
Costs (2)
 

 

Certain Other
Items (3)
 

 

Adjustment
Subtotal
 

 


Non-GAAP

 

 

 

 Sales

 

 

 

$

23,732

 

 

 

 

 

 

 

 

 $

-

 

 

 

$

23,732

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Materials and production

 

 

 

 

8,343

 

 

 2,641

 

 

181

 

 

 

 

 

2,822

 

 

 

 

5,521

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketing and administrative

 

 

 

 

6,689

 

 

 135

 

 

46

 

 

 

 

 

181

 

 

 

 

6,508

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

 

 

4,094

 

 

 321

 

 

61

 

 

 

 

 

382

 

 

 

 

3,712

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring costs

 

 

 

 

654

 

 

 

 

 654

 

 

 

 

 

654

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity income from affiliates

 

 

 

 

(193

)

 

 

 

 

 

 

 

 

-

 

 

 

 

(193

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (income) expense, net

 

 

 

 

744

 

 

 

 

 

 

 373

 

 

 

373

 

 

 

 

371

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Before Taxes

 

 

 

 

3,401

 

 

 (3,097

)

 

(942

)

 

(373

)

 

 

(4,412

)

 

 

 

7,813

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxes on Income

 

 

 

 

276

 

 

 

 

 

 

 

 

 

 (1,668

)


 (4)
 

 


1,944

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

 

 

 

3,125

 

 

 

 

 

 

 

 

 

 (2,744

)

 

 

 

5,869

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Net Income Attributable to Noncontrolling Interests

 

 

 

 

58

 

 

 

 

 

 

 

 

 

-

 

 

 

 

58

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income Attributable to Merck & Co., Inc.

 

 

 

$

3,067

 

 

 

 

 

 

 

 

 $

(2,744

)

 

 

$

5,811

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Common Share Assuming Dilution

 

 

 

$

0.98

 

 

 

 

 

 

 

 

 

 

 

 $

1.87

 


 (5)
 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Shares Outstanding Assuming Dilution

 

 

 

 

3,106

 

 

 

 

 

 

 

 

 

 

 

 

 3,106

 

 

 

 

Tax Rate

 

 

 

 

8.1

%

 

 

 

 

 

 

 

 

 

 

  

24.9

%

 

 

 


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 $2.5 billion for the amortization of intangible assets and the amortization of purchase accounting adjustments to inventories recognized as a result of the merger, as well as $118 million of impairment charges on product intangibles. Amounts included in marketing and administrative expenses reflect integration costs, as well as other costs associated with mergers and acquisitions, such as severance costs which are not part of the company's formal restructuring programs. 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) Included in other (income) expense, net is a $500 million charge related to the resolution of the arbitration proceeding with Johnson & Johnson and a $127 million gain on the sale of certain manufacturing facilities and related assets.

 

 

 

(4) Includes a net benefit of approximately $700 million relating to the settlement of the company's 2002-2005 federal income tax audit, the favorable impact of certain foreign and state tax rate changes that resulted in a net $230 million reduction of deferred tax liabilities on intangibles established in purchase accounting, as well as the estimated tax impact on the reconciling items.

 

 

 

(5) The company calculates earnings per share pursuant to the two-class method which requires the allocation of net income between common shareholders and participating security holders. Net income attributable to Merck & Co., Inc. common shareholders used to calculate non-GAAP earnings per common share assuming dilution was $5,795 million for the first six months of 2011.

 

 

 

 


 

 

MERCK & CO., INC.
FRANCHISE / KEY PRODUCT SALES

(AMOUNTS IN MILLIONS)

Table 3
 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

 

 

2010

 

 

 

% Change

  

% Change

 

 

 

 

 

  

 

 


Jun
 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1Q

 

2Q

 


YTD
 

 

 


1Q

 

2Q

 

Jun YTD

 

3Q

 

4Q

 

Full Year

 

 

 

2Q

 

Jun YTD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

TOTAL SALES (1)

 

$11,580

 

$12,151

 

$23,732

 

 

 

$11,422

 

$11,346

 

$22,768

 

$11,125

 

$12,094

 

$45,987

 

 

 

7

 

4

 

 

PHARMACEUTICAL (2)

 

9,820

 

10,360

 

20,179

 

 

 

9,665

 

9,638

 

19,303

 

9,523

 

10,441

 

39,267

 

 

 

7

 

5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

Cardiovascular

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Zetia

 

582

 

592

 

1,174

 

 

 

534

 

564

 

1,098

 

571

 

629

 

2,297

 

 

 

5

 

7

 

 

Vytorin

 

480

 

459

 

939

 

 

 

477

 

490

 

967

 

485

 

562

 

2,014

 

 

 

-6

 

-3

 

 

Integrilin

 

64

 

56

 

120

 

 

 

70

 

70

 

140

 

63

 

63

 

266

 

 

 

-20

 

-14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diabetes & Obesity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Januvia

 

739

 

779

 

1,518

 

 

 

511

 

600

 

1,111

 

600

 

675

 

2,385

 

 

 

30

 

37

 

 

Janumet

 

305

 

321

 

626

 

 

 

201

 

218

 

419

 

247

 

288

 

954

 

 

 

47

 

50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diversified Brands

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Cozaar / Hyzaar

 

426

 

406

 

832

 

 

 

782

 

485

 

1,267

 

423

 

415

 

2,104

 

 

 

-16

 

-34

 

 

Zocor

 

127

 

107

 

234

 

 

 

116

 

117

 

233

 

114

 

121

 

468

 

 

 

-9

 

--

 

 

Propecia

 

106

 

112

 

218

 

 

 

100

 

113

 

213

 

109

 

124

 

447

 

 

 

-1

 

3

 

 

Claritin Rx

 

120

 

65

 

186

 

 

 

98

 

58

 

157

 

53

 

86

 

296

 

 

 

12

 

19

 

 

Remeron

 

60

 

57

 

117

 

 

 

51

 

59

 

110

 

50

 

62

 

223

 

 

 

-4

 

6

 

 

Vasotec / Vaseretic

 

57

 

59

 

116

 

 

 

59

 

63

 

122

 

69

 

64

 

255

 

 

 

-6

 

-5

 

 

Proscar

 

60

 

53

 

113

 

 

 

58

 

56

 

114

 

58

 

44

 

216

 

 

 

-5

 

-1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Infectious Disease

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Isentress

 

292

 

337

 

629

 

 

 

232

 

267

 

499

 

278

 

313

 

1,090

 

 

 

26

 

26

 

 

Cancidas

 

158

 

168

 

326

 

 

 

153

 

150

 

303

 

135

 

174

 

611

 

 

 

12

 

8

 

 

PegIntron

 

166

 

154

 

319

 

 

 

186

 

185

 

371

 

168

 

198

 

737

 

 

 

-17

 

-14

 

 

Primaxin

 

136

 

136

 

272

 

 

 

159

 

158

 

317

 

135

 

158

 

610

 

 

 

-13

 

-14

 

 

Invanz

 

87

 

103

 

189

 

 

 

75

 

83

 

158

 

91

 

113

 

362

 

 

 

24

 

20

 

 

Avelox

 

106

 

61

 

167

 

 

 

106

 

59

 

165

 

59

 

92

 

316

 

 

 

3

 

1

 

 

Noxafil

 

55

 

56

 

110

 

 

 

49

 

50

 

99

 

52

 

48

 

198

 

 

 

12

 

12

 

 

Rebetol

 

53

 

48

 

100

 

 

 

56

 

55

 

111

 

55

 

54

 

221

 

 

 

-13

 

-10

 

 

Crixivan / Stocrin

 

45

 

50

 

95

 

 

 

52

 

48

 

100

 

49

 

58

 

206

 

 

 

4

 

-5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Neurosciences & Ophthalmology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Maxalt

 

173

 

131

 

304

 

 

 

135

 

133

 

268

 

133

 

149

 

550

 

 

 

-1

 

14

 

 

Cosopt / Trusopt

 

114

 

122

 

236

 

 

 

115

 

123

 

238

 

114

 

131

 

484

 

 

 

-1

 

-1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oncology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Temodar

 

248

 

234

 

481

 

 

 

274

 

271

 

545

 

254

 

266

 

1,065

 

 

 

-14

 

-12

 

 

Emend

 

87

 

120

 

207

 

 

 

84

 

93

 

177

 

91

 

110

 

378

 

 

 

29

 

17

 

 

Intron A

 

49

 

47

 

96

 

 

 

54

 

51

 

105

 

50

 

54

 

209

 

 

 

-7

 

-9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Respiratory & Immunology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Singulair

 

1,328

 

1,354

 

2,682

 

 

 

1,165

 

1,258

 

2,423

 

1,215

 

1,349

 

4,987

 

 

 

8

 

11

 

 

Remicade

 

753

 

842

 

1,595

 

 

 

674

 

669

 

1,343

 

661

 

710

 

2,714

 

 

 

26

 

19

 

 

Nasonex

 

373

 

323

 

696

 

 

 

320

 

338

 

658

 

259

 

303

 

1,219

 

 

 

-4

 

6

 

 

Clarinex

 

155

 

209

 

364

 

 

 

164

 

191

 

355

 

131

 

138

 

623

 

 

 

9

 

3

 

 

Arcoxia

 

114

 

100

 

214

 

 

 

95

 

95

 

190

 

94

 

115

 

398

 

 

 

5

 

12

 

 

Simponi

 

54

 

75

 

129

 

 

 

10

 

18

 

28

 

27

 

42

 

97

 

 

 

*

 

*

 

 

Asmanex

 

60

 

47

 

107

 

 

 

51

 

56

 

107

 

48

 

53

 

208

 

 

 

-16

 

-1

 

 

Proventil

 

42

 

37

 

80

 

 

 

57

 

55

 

112

 

43

 

55

 

210

 

 

 

-32

 

-29

 

 

Dulera

 

13

 

25

 

37

 

 

 

0

 

0

 

0

 

2

 

6

 

8

 

 

 

*

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vaccines

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 ProQuad, M-M-R II and Varivax

 

244

 

291

 

535

 

 

 

319

 

340

 

659

 

434

 

285

 

1,378

 

 

 

-14

 

-19

 

 

Gardasil

 

214

 

277

 

490

 

 

 

233

 

219

 

451

 

316

 

221

 

988

 

 

 

27

 

9

 

 

RotaTeq

 

125

 

148

 

272

 

 

 

93

 

139

 

231

 

119

 

169

 

519

 

 

 

7

 

18

 

 

Zostavax

 

24

 

122

 

146

 

 

 

95

 

18

 

114

 

23

 

107

 

243

 

 

 

*

 

28

 

 

Pneumovax

 

79

 

64

 

143

 

 

 

51

 

59

 

110

 

110

 

156

 

376

 

 

 

8

 

29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Women's Health & Endocrine

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Fosamax

 

208

 

221

 

429

 

 

 

230

 

241

 

472

 

220

 

234

 

926

 

 

 

-9

 

-9

 

 

NuvaRing

 

142

 

154

 

297

 

 

 

135

 

145

 

280

 

134

 

145

 

559

 

 

 

6

 

6

 

 

Follistim AQ

 

133

 

143

 

276

 

 

 

134

 

137

 

270

 

119

 

138

 

528

 

 

 

4

 

2

 

 

Implanon

 

60

 

81

 

141

 

 

 

51

 

51

 

101

 

64

 

71

 

236

 

 

 

60

 

39

 

 

Cerazette

 

59

 

66

 

125

 

 

 

55

 

49

 

104

 

56

 

49

 

209

 

 

 

34

 

20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Pharmaceutical (3)

 

 745

 

948

 

1,697

 

 

 

946

 

941

 

1,888

 

942

 

1,044

 

3,879

 

 

 

1

 

-10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ANIMAL HEALTH

 

758

 

802

 

1,560

 

 

 

709

 

731

 

1,440

 

687

 

815

 

2,941

 

 

 

10

 

8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

CONSUMER CARE (2)

 

517

 

541

 

1,058

 

 

 

489

 

544

 

1,032

 

409

 

381

 

1,823

 

 

 

-1

 

2

 

 

 Claritin OTC

 

167

 

134

 

301

 

 

 

136

 

167

 

303

 

120

 

103

 

526

 

 

 

-19

 

-1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Revenues (4)

 

486

 

448

 

935

 

 

 

559

 

433

 

993

 

506

 

457

 

1,956

 

 

 

3

 

-6

 

 

 Astra

 

322

 

306

 

628

 

 

 

364

 

241

 

605

 

345

 

302

 

1,252

 

 

 

27

 

4

 

 


* 100% or greater

 

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

 

(1) Only select products are shown.

 

(2) Beginning in 2011, Merck changed the reporting for certain over-the-counter products. Sales of these products outside the United States were previously recorded in the Pharmaceutical business, and are now reported in the Consumer Care business. Prior period amounts have been recast on a comparative basis.

 

 

 


(3) Includes pharmaceutical products not individually shown above. Other vaccines sales included in Other Pharmaceutical were $54 million and $67 million for the first and second quarters of 2011, respectively. Other vaccines sales included in Other Pharmaceutical were $55 million, $57 million, $94 million and $75 million for the first, second, third and fourth quarters of 2010, respectively.

 


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

 

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