Merck Q2 income slips 12%

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Merck has reported a 12 percent decline in net income for the 2009 second quarter of $1.56 billion, compared with $1.8 billion in the previous year-ago quarter.

The Whitehouse, N.J.-based company said its worldwide sales for the second quarter of 2009 were $5.9 billion, a decrease of 3 percent compared with the second quarter of 2008. Excluding the impact of foreign exchange, total revenue would have increased 3 percent from the second quarter of 2008.

Materials and production costs were $1.4 billion for the quarter, a decrease of 3 percent from the second quarter of 2008, according to Merck. The second quarters of 2009 and 2008 include $47 million and $16 million, respectively, for costs associated with global restructuring programs.

Merck said that marketing and administrative expenses were $1.7 billion for the second quarter of 2009, a decrease of 10 percent from the second quarter of 2008. Costs for the second quarter of 2009 include $44 million of merger-related expenses. Research and development expenses were $1.4 billion for the quarter, an increase of 19 percent from the second quarter of 2008 reflecting in part an increase in the company's external licensing activity. The 2009 expenses include $108 million for costs associated with the company's 2008 global restructuring program.

The company said that its restructuring costs, primarily related to employee separations, were $37 million for the second quarter of 2009 and $102 million for the second quarter of 2008. As of June 30, Merck had approximately 53,200 employees. Total overall costs associated with the company's global restructuring programs included in materials and production, research and development, and restructuring costs were $192 million and $118 million for the second quarter of 2009 and 2008, respectively, primarily comprised of employee separations and accelerated depreciation.

For its specific cardiovascular drug line(s), Merck reported:
  • Combined global sales of Zetia (ezetimibe) and Vytorin (ezetimibe/simvastatin), reported by Merck/Schering-Plough, were $1 billion for the 2009 second quarter, representing a 10 percent decline compared with the 2008 second quarter. Global sales of Zetia, marketed as Ezetrol outside the U.S., were $514 million in the second quarter, a decrease of 8 percent compared with the second quarter of 2008. Second-quarter 2009 global sales of Vytorin, marketed outside the U.S. as Inegy, were $520 million, a decrease of 12 percent compared with the same period in 2008.
  • Global sales of its antihypertensive medicines, Cozaar (losartan potassium) and Hyzaar (losartan potassium and hydrochlorothiazide), were $906 million for the second quarter of 2009, representing a 4 percent decrease compared with the second quarter of 2008.
  • Januvia (sitagliptin), its DPP-4 inhibitor for the treatment of type 2 diabetes, recorded worldwide sales of $462 million during the second quarter of 2009, representing a 38 percent increase compared with same quarter in 2008.
  • Janumet (sitagliptin/metformin hydrochloride), a single tablet that targets all three key defects of type 2 diabetes, achieved worldwide sales of $155 million during the quarter, an increase of 113 percent compared with the second quarter 2008.

The company said that its previously announced merger with Schering-Plough is progressing as planned, with the closing anticipated in the fourth quarter. The merger is subject to approval by Merck and Schering-Plough shareholders and each company's special meeting has been scheduled for Aug. 7, where shareholders will vote on the proposed merger.