Merck sees 56% drop in income for Q1

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Despite a 56 percent drop in net income for its 2009 first quarter, Merck said its planned merger with Schering-Plough will be an opportunity for "sustainable growth."

In early March, Merck agreed to purchase Schering-Plough for approximately $41 billion--a deal from which the company expects to generate a cost savings of approximately $3.5 billion annually beyond 2011.

For the quarter, the Whitehouse Station, N.J.-based company said its net income was $1.46 billion, compared with $3.33 billion in the year-ago quarter. Worldwide sales for the first quarter of 2009 were $5.4 billion, a decrease of 8 percent compared with the first quarter of 2008. Merck said that foreign exchange negatively affected global sales performance by 3 percent for the quarter.

"Our first-quarter results in part reflect the impact of the difficult global economy on patients, providers and payors, but we remain on track to meet our full-year earnings guidance," said Richard T. Clark, Merck's chairman, president and CEO. "We believe our planned merger with Schering-Plough will accelerate Merck's transformation into a global healthcare leader built for sustainable growth and success," Clark added.

For its cardiovascular line, the company said that:
  • Combined global sales of Zetia (ezetimibe) and Vytorin (ezetimibe/simvastatin), as reported by the Merck/Schering-Plough partnership, were $945 million for the first quarter of 2009, representing a 23 percent decline compared with the first quarter of 2008. Global sales of Zetia, marketed as Ezetrol outside the U.S., were $479 million in the first quarter, a decrease of 18 percent compared with the first quarter of 2008. First quarter global sales of Vytorin, marketed outside the U.S. as Inegy, were $466 million, a decrease of 28 percent compared with the same period in 2008.
  • Global sales of its antihypertensive medicines, Cozaar (losartan potassium) and Hyzaar (losartan potassium and hydrochlorothiazide), were $839 million for the first quarter of 2009, representing a 1 percent decrease compared with the first quarter of 2008.
  • Januvia (sitagliptin), its DPP-4 inhibitor for the treatment of type 2 diabetes, recorded worldwide sales of $411 million during the first quarter of 2009, representing a 51 percent increase compared with same quarter in 2008.
  • Janumet (sitagliptin/metformin hydrochloride), a single tablet that targets three defects of type 2 diabetes, achieved worldwide sales of $128 million during the quarter, almost double the $58 million in sales reported for the first quarter 2008.

Merck said that its materials and production costs were $1.3 billion for the quarter, an increase of 8 percent from the first quarter of 2008. The first quarters of 2009 and 2008 include $22 million and $15 million, respectively, for costs associated with global restructuring programs. Research and development expenses were $1.2 billion for the quarter, an increase of 14 percent from the first quarter of 2008.