SlideShare una empresa de Scribd logo
1 de 13
Descargar para leer sin conexión
News Release
______________________________________________________________________________

Media Contacts:      David Caouette                Investor Contacts:     Eva Boratto
                     (908) 423-3461                                       (908) 423-5185

                     Amy Rose                                             Michael Nally
                     (908) 423-6537                                       (908) 423-4465


                     Merck Reports Third-Quarter 2008 Financial Results


   •   Company Announces Third-Quarter 2008 Non-GAAP EPS of $0.80, Excluding 29 Cents
       of Restructuring Charges; Third-Quarter GAAP EPS of $0.51

   •   2008 Global Restructuring Efforts Expected to Reduce Workforce by 12 Percent;
       Cumulative Savings of $3.8 to $4.2 Billion Expected from 2008 to 2013 and Pretax Costs
       of $1.6 Billion to $2.0 Billion Through 2011
   •   JANUVIA and JANUMET, Treatments for Type 2 Diabetes, and ISENTRESS, Merck's
       HIV Medicine, Deliver Strong Growth as Worldwide Launches Continue

   •   Merck Anticipates Full-Year 2008 EPS Range of $3.28 to $3.32, Excluding Certain
       Items, and GAAP 2008 EPS Range of $3.45 to $3.55

   •   Merck Anticipates 2005 to 2010 Compound Annual Non-GAAP EPS Growth in Mid-to-
       High Single-Digits, Excluding Certain Items; GAAP EPS Compound Annual Growth Rate
       Expected to Increase by Double-Digits Over Same Period

WHITEHOUSE STATION, N.J., Oct. 22, 2008 – Merck & Co., Inc. today announced financial
results for the third quarter of 2008, provided financial guidance for 2008 and 2010, and outlined
additional steps in its continuing efforts to position the Company for success in a rapidly
evolving industry.
       Merck reported non-GAAP (generally accepted accounting principles) earnings per
share (EPS) of $0.80 for the third quarter of 2008, excluding $0.29 of restructuring charges.
GAAP EPS for the third quarter were $0.51. Third quarter worldwide sales were $5.9 billion, a
decrease of 2 percent from the third quarter of 2007. Foreign exchange for the third quarter
favorably affected global sales performance by 4 percent. Net income for the third quarter of
2008 was $1,092.7 million compared with $1,525.5 million in the third quarter of 2007, which
include aftertax restructuring charges of $612 million and $117 million, respectively. For the first


                                             - more -
2


nine months of 2008, worldwide sales were $17.8 billion and net income was $6,163.6 million.
A reconciliation of EPS as reported in accordance with GAAP to EPS that excludes certain
items is provided in the table that follows:


                                                                   Quarter Ended Sept. 30            Nine Months Ended Sept. 30

                                                                    2008              2007               2008              2007

                                                               $      0.51       $      0.70        $       2.86       $      2.24
    GAAP EPS

                                                                      0.29              0.05               (0.31)             0.16
EPS impact of items*

    Non-GAAP EPS that excludes certain items
    listed below1                                              $      0.80       $      0.75        $       2.55       $      2.40




                                                                    Third-         Third-        Nine Months          Nine Months
                                                                   Quarter        Quarter           Ended                Ended
           * Amount calculated as follows (in millions              2008           2007          Sept. 30, 2008       Sept. 30, 2007
                            except per share amounts)

                                                                         $-              $-             $(2,223)                    $-
    Gain on distribution from AstraZeneca
    Costs related to 2008 global restructuring
                                                                       720               --                 720                     --
    program
    Costs related to 2005 global restructuring
                                                                       127             178                  330                    536
    program

                                                                       847             178              (1,173)                    536
    Net decrease (increase) before income taxes

                                                                     (235)              (61)               503                 (185)
    Income tax (benefit) expense impact on above items

                                                                    $ 612            $117               $ (670)              $ 351
    Decrease (increase) in net income

                                                                     $ 0.29          $ 0.05             $ (0.31)             $ 0.16
    EPS impact of items


           quot;Merck's third quarter results show continued strong growth in a number of our recently
launched products and the efficiencies we have realized throughout the business,quot; said Richard
T. Clark, chairman, president and chief executive officer. quot;Since 2005, Merck has anticipated


                                                           - more -

1
  Merck is providing information on 2008 and 2007 non-GAAP earnings per share 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, earnings per share prepared in accordance with GAAP.
3


and aggressively prepared for the changing industry environment by restructuring our business
and transforming the way in which we discover, manufacture and provide our products.
       quot;Our focus remains on increasing revenue from our new and in-line products, fully
funding innovative R&D, investing in growth opportunities, such as emerging markets, and
becoming the most trusted partner in delivering value to our customers. With the right long-term
strategy and our efforts to reshape Merck's business, including today's actions, I am confident
we are building a solid foundation for achieving industry-leading performance in the future,quot;
Clark added.
       quot;However, our current sales trends for key products, compounded by known industry
and emerging economic factors, have led us to reassess the environment in which we expect to
be operating between now and 2010,quot; he said. quot;In light of these considerations, we have
revised our financial guidance over this time period.quot;

Quarterly Financial Highlights
       Materials and production costs were $1.5 billion for the quarter, a decrease of 3 percent
from the third quarter of 2007. The third-quarter costs for 2008 and 2007 include $59 million
and $129 million, respectively, for expenses associated with the Company's global restructuring
programs. The gross margin was 75.1 percent for the third quarter of 2008 and includes a 1
percentage point unfavorable impact from restructuring costs. For the third quarter of 2007,
gross margin was 75.0 percent and reflected a 2.1 percentage point unfavorable impact due to
restructuring costs.
       Marketing and administrative expenses were $1.7 billion for the third quarter of 2008, a
decrease of 11 percent from the third quarter of 2007. Included in marketing and administrative
expenses in the third quarter of 2007 was a $70 million reserve solely for future legal defense
costs for VIOXX litigation.
       Research and development expenses were $1.2 billion for the quarter, a decrease of 19
percent from the third quarter of 2007. Expenses for the third quarter include $31 million for
costs associated with the Company's global restructuring programs. For the third quarter of
2007, research and development expenses included a $325 million acquired research charge
associated with the purchase of NovaCardia, Inc. Research and development expenses grew 2
percent for the quarter adjusting for the NovaCardia charge in 2007 and restructuring in 2008.
       Restructuring costs, primarily related to employee separation costs associated with the
Company's global restructuring programs, were $757 million for the third quarter of 2008 and


                                             - more -
4


$49 million for the third quarter of 2007. Of that third quarter 2008 total, $102 million were from
the 2005 program and $655 million were from the 2008 program announced today.
       Total overall costs associated with the Company's global restructuring programs
included in materials and production, research and development, and restructuring costs were
$847 million and $178 million for the third quarter of 2008 and 2007, respectively, primarily
comprised of employee separations and accelerated depreciation.
       Equity income from affiliates was $666 million in the third quarter of 2008, a decrease of
13 percent from the third quarter of 2007 as a result of lower contributions from the
Merck/Schering-Plough joint venture and AstraZeneca LP.
       Other (income) expense, net, for the third quarter was $62 million and includes the
impact of $88 million of recognized losses in the Company’s investment portfolio. During the
quarter, Merck maintained a balance of approximately $19 billion in cash and investments,
which includes nearly $6 billion that has been pledged as collateral for certain items, including
the VIOXX settlement.
       Merck's third-quarter 2008 effective tax rate was 22.6 percent. The effective tax rate
excluding the impact of restructuring charges was 24.5 percent.

Global Restructuring Efforts
       Merck remains confident in the progress it is making in creating a new business model
that is more customer-centric, more agile and has a variable cost structure that enables
investment in key growth areas such as research and development and new products and
markets.
       Merck today outlined the next steps in the Company's ongoing efforts to reduce its cost
structure, increase efficiency and enhance competitiveness. As part of the 2008 restructuring
plan, Merck expects to eliminate approximately 7,200 positions — 6,800 active employees and
400 vacancies — across all areas of the Company worldwide by the end of 2011. About 40
percent of the total reductions will occur in the United States. To streamline management layers
across the Company, Merck will reduce its total number of senior and mid-level executives by
approximately 25 percent. These positions are in addition to the 10,400 positions eliminated as
part of the 2005 restructuring program, which was substantially complete at the end of
September 2008. As of Sept. 30, Merck has approximately 56,700 employees.
       The restructuring effort will involve all areas of the Company. For example, Merck will
accelerate the rollout of a new, more customer-centric selling model designed to provide Merck
with a meaningful competitive advantage and help physicians, patients and payers, improve


                                              - more -
5


patient outcomes. The Company also will make greater use of outside technology resources,
centralize common sales and marketing activities, and consolidate and streamline its
operations. Merck's manufacturing division will further focus its capabilities on core products
and outsource non-core manufacturing. In addition, Merck is enhancing its research operations
to expand access to worldwide external science and incorporate it as a key component of the
Company's pipeline, and ensure a more sustainable pipeline by translating basic research
productivity into late-stage clinical success. As a result, basic research operations will be
organized to consolidate work in support of a given therapeutic area into one of four locations.
This will provide a more efficient use of research facilities and result in the closure of three basic
research sites in Tsukuba, Japan; Pomezia, Italy; and Seattle by the end of 2009.
          Merck expects the 2008 program to yield cumulative pretax savings of $3.8 billion to
$4.2 billion from 2008 to 2013. These are in addition to the cumulative pretax savings of $4.5 to
$5.0 billion which the Company remains on track to achieve at the end of the 2005 – 2010
period.
          The Company anticipates pretax restructuring costs of $250 million to $450 million will
be recorded in the fourth quarter of this year. This global restructuring program is expected to
be completed by the end of 2011 with the total pretax costs estimated to be $1.6 billion to $2.0
billion. The Company estimates that two-thirds of the cumulative pretax costs will result in
future cash outlays, primarily from employee separation expense. Approximately one-third of
the cumulative pretax costs are non-cash, relating primarily to the accelerated depreciation of
facilities to be closed or divested.

Financial Guidance
          Merck anticipates a full-year 2008 non-GAAP EPS range of $3.28 to $3.32 that adjusts for
certain items and a 2008 GAAP EPS range of $3.45 to $3.55. The 2008 GAAP guidance
includes:
    •     A pretax charge of approximately $1.3 billion to $1.5 billion associated with the Company's
          global restructuring programs.
    •     The $2.2 billion pretax gain from a distribution from the AstraZeneca limited partnership.



                                                - more -
6


       A reconciliation of anticipated 2008 EPS as reported in accordance with GAAP to non-
GAAP EPS that adjusts for certain items is provided in the table that follows:


                                                                    Full-Year 2008

              GAAP EPS                                              $3.45 to $3.55

              EPS impact of items*                                  $(0.17) to $(0.23)
              Non-GAAP EPS that excludes certain items
                                                                     $3.28 to $3.32
              listed below



               * Amount calculated as follows (in millions except   Full-Year 2008
                                            per share amounts)
              Costs related to the global restructuring programs    $1,500 to $1,300
              Gain on distribution from AstraZeneca                             (2,223)
              Net (increase) decrease before income taxes               (723) to (923)
              Income tax expense (benefit) on above items                  367 to 427
              (Increase) decrease in net income                      $(356) to $(496)
              EPS impact of items                                   $(0.17) to $(0.23)


       Details on Merck's full-year 2008 financial guidance can be found on page 11 of this news
release.
       The Company had previously provided guidance on the 2005 to 2010 time period. Merck
anticipates non-GAAP revenues, including 50 percent of the revenues from our joint ventures, will
have a compound annual growth rate of 2 to 4 percent from 2005 to 2010. Merck's GAAP
reported sales, excluding 50 percent of the revenues from our joint ventures, is expected to have
a compound annual growth rate of 1 to 3 percent from 2005 to 2010. Non-GAAP EPS compound
annual growth rate from 2005 to 2010 is expected to be in the mid-to-high single-digits, excluding
certain items. Merck anticipates EPS compound annual growth rate on a GAAP basis to increase
by double-digits over the same period. The non-GAAP EPS guidance excludes restructuring
charges and net tax charges of $0.43 per share in 2005 and charges related to the 2008
restructuring program of $100 million to $400 million in 2010. For the purpose of the 2010
guidance, the Company is excluding any one-time gains that may result from AstraZeneca
exercising its option with respect to AstraZeneca LP.


                                                 - more -
7


Product Performance Highlights
           JANUVIA (sitagliptin), Merck's first-in-class DPP-4 inhibitor for the treatment of type 2
diabetes, recorded worldwide sales of $379 million in the third quarter of 2008 compared with
$185 million in the same quarter in 2007. JANUMET (sitagliptin/metformin hydrochloride), a
single tablet that targets all three key defects of type 2 diabetes, recorded sales of $101 million
during the quarter compared with $19 million in the same quarter in 2007.
           Worldwide sales of ISENTRESS (raltegravir), Merck's first-in-class HIV integrase
inhibitor for use in combination with other antiretroviral agents for the treatment of HIV-1
infection in treatment-experienced adult patients, were $107 million in third-quarter 2008. Merck
launched ISENTRESS in the United States in October 2007.
           Total worldwide sales of Merck's other promoted medicines, which include JANUVIA,
JANUMET and ISENTRESS, were $2.0 billion for the third quarter, representing a 21 percent
increase compared with the third quarter of 2007. Merck's portfolio of medicines are approved
to treat a broad range of medical conditions, including glaucoma, migraine, pain, diabetes,
HIV/AIDS and other infectious diseases.
           Worldwide sales of SINGULAIR (montelukast sodium), a once-a-day oral medicine
indicated for the chronic treatment of asthma and the relief of symptoms of allergic rhinitis, were
$1.0 billion for the third quarter of 2008, an increase of 1 percent compared with the third
quarter of 2007. SINGULAIR continues to be the No. 1 prescribed branded product in the U.S.
respiratory market2.
           Combined worldwide sales of ZETIA (ezetimibe) and VYTORIN (ezetimibe/simvastatin),
as reported by the Merck/Schering-Plough joint venture, were $1.1 billion for the third quarter of
2008, representing a 15 percent decrease compared with the third quarter of 2007. Worldwide
sales of ZETIA, marketed as EZETROL outside the United States, were $534 million in the third
quarter of 2008, a decrease of 12 percent compared with the previous year's third quarter.
Third-quarter 2008 worldwide sales of VYTORIN, marketed outside the United States as
INEGY, were $567 million, a decrease of 18 percent compared with the third quarter of 2007.
The Company records the results from its interest in the Merck/Schering-Plough joint venture in
equity income from affiliates.
           Worldwide sales of Merck's antihypertensive medicines COZAAR (losartan potassium)
and HYZAAR3 (losartan potassium and hydrochlorothiazide) were $888 million for the third


                                                         - more -


2
    Source: IMS NPA
3
    COZAAR and HYZAAR are registered trademarks of E.I. duPont de Nemours and Company, Wilmington, Del.
8


quarter of 2008, a 9 percent increase compared with the third quarter of 2007. COZAAR and
HYZAAR are among the leading medicines in the angiotensin receptor blocker class.
       Worldwide sales of FOSAMAX (alendronate sodium) and FOSAMAX PLUS D
(alendronate sodium/cholecalciferol), which is marketed as FOSAVANCE throughout the
European Union, were $354 million for the third quarter of 2008, representing a decrease of 51
percent compared with the third quarter of 2007. Since most formulations of these medicines
have lost U.S. marketing exclusivity, the Company is experiencing a significant decline in sales
in the United States within the FOSAMAX franchise.
       Worldwide sales of the Company's cervical cancer vaccine GARDASIL (human
papillomavirus (HPV) quadrivalent (types 6, 11, 16, 18) vaccine, recombinant) as recorded by
Merck, were $401 million for the third quarter of 2008, a decrease of 4 percent from the third
quarter of 2007. Vaccines in most major European markets are sold through the Company’s
joint venture, Sanofi Pasteur-MSD, and the results from its interest in the joint venture are
recorded in equity income from affiliates.
       ZOSTAVAX, the Company’s vaccine to help prevent shingles (herpes zoster), recorded
sales of $11 million for the third quarter of 2008 as compared to $61 million for the third quarter
of 2007. Sales in the quarter were impacted by bulk vaccine supply issues that caused delays
in the fulfillment of customer orders. Merck expects to fill the current customer back orders by
the end of the year.
       Worldwide sales of ROTATEQ (rotavirus vaccine, live, oral, pentavalent), Merck's
vaccine to help protect children against rotavirus gastroenteritis and one of the world's leading
rotavirus vaccines, as recorded by Merck, were $134 million in the third quarter of 2008, a
decrease of 21 percent from the third quarter of 2007. In third quarter 2007, the Company
recognized $51 million in revenue as a result of a government purchase for the Center for
Disease Control and Prevention's Strategic National Stockpile.
       Worldwide sales of Merck's other viral vaccines, which include VARIVAX (varicella virus
vaccine live), M-M-R II (measles, mumps and rubella virus vaccine live) and PROQUAD
(measles, mumps, rubella and varicella virus vaccine live), as recorded by Merck, were $430
million for the third quarter of 2008, comparable with the same period a year earlier. In addition,
Merck now anticipates that the Company's HIB-containing vaccines, PedvaxHIB and COMVAX,
will return to the U.S. market in mid-2009.
       Merck records ongoing revenue based on sales of products that are associated with
alliances, the most significant of which is AstraZeneca LP. Revenue from AstraZeneca LP
recorded by Merck was $375 million in the third quarter of 2008.

                                              - more -
9


TREDAPTIVE/CORDAPTIVE Update
       The launch of TREDAPTIVE/CORDAPTIVE in Europe and other markets will be delayed
due to a manufacturing-related issue. Merck is committed to quickly resolving the issue and to
making TREDAPTIVE/CORDAPTIVE available as soon as possible.
       Last week, Oxford University issued a press release announcing that it expects to enroll
an additional 5,000 patients in the HPS2-THRIVE study to increase the total study population
size to 25,000 patients. The study was initially expected to be complete in 2013; the addition of
the 5,000 patients may allow the study to be completed earlier.

Earnings Conference Call
       Investors are invited to a live audio webcast of Merck's third-quarter sales and earnings
conference call today at 9:00 a.m. EDT by visiting the Newsroom section of Merck's Web site,
www.merck.com/newsroom/webcast/. Institutional investors and analysts can participate in the
call by dialing (706) 758-9927 or (877) 381-5782. Journalists are invited to listen in on the call
by dialing (706) 758-9928 or (800) 399-7917. A replay of the webcast will be available starting
at 12 p.m. EDT today through 5 p.m. EDT on Oct. 29. To listen to the replay, dial (706) 645-
9291 or (800) 642-1687 and enter ID No. 65968968.

About Merck
       Merck & Co., Inc. is a global research-driven pharmaceutical company dedicated to
putting patients first. Established in 1891, Merck discovers, develops, manufactures and
markets vaccines and medicines to address unmet medical needs. The Company devotes
extensive efforts to increase access to medicines through far-reaching programs that not only
donate Merck medicines but help deliver them to the people who need them. Merck also
publishes unbiased health information as a not-for-profit service. For more information, visit
www.merck.com.

Forward-Looking Statement
       This news release, including the financial information that follows, contains quot;forward-
looking statementsquot; as that term is defined in the Private Securities Litigation Reform Act of
1995. These statements are based on management's current expectations and involve risks
and uncertainties, which may cause results to differ materially from those set forth in the
statements. The forward-looking statements may include statements regarding product
development, product potential or financial performance. No forward-looking statement can be
guaranteed, and actual results may differ materially from those projected. Merck undertakes no


                                              - more -
10


obligation to publicly update any forward-looking statement, whether as a result of new
information, future events or otherwise. Forward-looking statements in this press release
should be evaluated together with the many uncertainties that affect Merck's business,
particularly those mentioned in the risk factors and cautionary statements in Item 1A of Merck's
Form 10-K for the year ended Dec. 31, 2007 and in any risk factors or cautionary statements
contained in the Company's periodic reports on Form 10-Q or current reports on Form 8-K,
which the Company incorporates by reference.

                                           ###
11


                               Merck Financial Guidance for 2008

       Worldwide sales will be driven by the Company’s major products, including the impact of
new studies and indications. Sales forecasts for those products for 2008 are as follows:

                                                                               WORLDWIDE
PRODUCT                                                                         2008 SALES
SINGULAIR (Respiratory)                                                      $4.3 to $4.5 billion
COZAAR/HYZAAR (Hypertension)                                                 $3.5 to $3.7 billion
GARDASIL (as recorded by Merck & Co., Inc.)                                  $1.4 to $1.6 billion
Other Vaccines (as recorded by Merck & Co., Inc.)                            $2.6 to $2.8 billion
FOSAMAX (Osteoporosis)                                                       $1.4 to $1.7 billion
Other reported products*                                                     $7.8 to $8.2 billion

* Other reported products comprise: ARCOXIA, CANCIDAS, COSOPT, CRIXIVAN, EMEND,
INVANZ, ISENTRESS, JANUVIA, JANUMET, MAXALT, PRIMAXIN, PROPECIA, PROSCAR,
STOCRIN, TIMOPTIC/TIMOPTIC XE, TRUSOPT, VASOTEC/VASERETIC, ZOCOR and
ZOLINZA.

•   Under an agreement with AstraZeneca (AZN), Merck receives revenue at predetermined
    percentages of the U.S. sales of certain products by AZN, most notably NEXIUM. In 2008,
    Merck anticipates that these revenues will be approximately $1.5 billion to $1.7 billion.

•   Equity income from affiliates includes the results of the Merck and Schering-Plough
    collaboration and Sanofi-Pasteur MSD combined with the results of Merck’s other joint venture
    relationships. Equity income from affiliates is expected to be approximately $2.3 billion to $2.5
    billion for 2008.

•   Product gross margin (PGM) percentage is estimated to be approximately 77 percent to 78
    percent for the full-year 2008. This guidance excludes the portion of the restructuring costs that
    will be included in product costs and will affect reported PGM in 2008.

•   Marketing and administrative expense is anticipated to be approximately $7.4 billion to $7.6
    billion.

•   Research and development expense (which excludes joint ventures) is anticipated to be
    approximately $4.7 billion to $4.9 billion.

•   As part of the Company’s restructuring of its operations, additional costs related to site
    closings, position eliminations and related costs will be incurred in 2008. The aggregate 2008
    pretax expense related to these activities is estimated to be in the range of $1.3 billion to $1.5
    billion.

•   The consolidated 2008 tax rate is estimated to be approximately 18 percent to 21 percent.
    This guidance does not reflect the tax rate impact of the gain on distribution from AstraZeneca
    or restructuring costs. The effective tax rate to be applied to the AstraZeneca gain and the
    Company’s restructuring costs is at a higher level than the underlying effective tax rate
    guidance.

•   Merck plans to continue its stock buyback program in 2008. As of Sept. 30, 2008, $2.6 billion
    remains under the current buyback authorizations approved by Merck’s Board of Directors.

       Given these guidance elements, Merck anticipates full-year 2008 non-GAAP EPS of
$3.28 to $3.32, excluding certain items, and 2008 GAAP EPS in the range of $3.45 to $3.55.
                                               ###
12



The following table shows the financial results for Merck & Co., Inc. and subsidiaries for the quarter ended
September 30, 2008, compared with the corresponding period of the prior year.

                                                                                           Merck & Co., Inc.
                                                                                          Consolidated Results
                                                                           (In Millions Except Earnings per Common Share)
                                                                                      Quarter Ended September 30
                                                                                              (Unaudited)

                                                                                                                                 %
                                                                             2008                      2007                    Change
Sales                                                                       $5,943.9                  $6,074.1                   (2)%

Costs, Expenses and Other
  Materials and production (1)                                                1,477.9                   1,517.7                    (3)
  Marketing and administrative (2)                                            1,730.3                   1,951.4                   (11)
  Research and development (3)                                                1,171.1                   1,440.5                   (19)
  Restructuring costs (4)                                                       757.5                      49.3                     *
  Equity income from affiliates                                                (665.6)                   (768.5)                  (13)
  Other (income) expense, net (5)                                                61.8                    (180.9)                    *

Income Before Taxes                                                           1,410.9                   2,064.6                   (32)

Taxes on Income (6)                                                             318.2                      539.1

Net Income                                                                  $1,092.7                  $1,525.5                    (28)

Average Shares Outstanding
 Assuming Dilution                                                            2,135.6                   2,192.8

Earnings per Common Share
 Assuming Dilution                                                              $0.51                      $0.70                  (27)


* > 100%


     (1) Includes restructuring costs of $59 million in the third quarter of 2008 and $129 million in the third quarter of 2007 primarily
     related to accelerated depreciation associated with Merck’s global restructuring programs.
     (2) Includes the impact of reserving an additional $70 million in the third quarter of 2007 solely for future legal defense costs for
     VIOXX litigation.
     (3) Includes restructuring costs of $31 million in the third quarter of 2008. Includes acquired research expense of $325 million
     related to the acquisition of NovaCardia, Inc. in the third quarter of 2007.
     (4) Restructuring costs represent separation and other related costs associated with the global restructuring programs.
     (5) Includes $88 million of recognized losses in the Company’s investment portfolio in the third quarter of 2008. Includes a net gain
     of approximately $100 million in the third quarter of 2007 related to the settlements of certain patent disputes.
     (6) The third quarter 2008 effective tax rate was 22.6%. The effective tax rate excluding the impact of restructuring charges was
     24.5%.
      
13




The following table shows the financial results for Merck & Co., Inc. and subsidiaries for the nine months
ended September 30, 2008, compared with the corresponding period of the prior year.

                                                                                          Merck & Co., Inc.
                                                                                         Consolidated Results
                                                                          (In Millions Except Earnings per Common Share)
                                                                                  Nine Months Ended September 30
                                                                                             (Unaudited)

                                                                                                                               %
                                                                           2008                      2007                    Change
Sales                                                                    $17,817.9                 $17,954.8                   (1)%

Costs, Expenses and Other
  Materials and production (1)                                               4,112.5                   4,595.9                  (11)
  Marketing and administrative (2)                                           5,515.0                   5,837.2                   (6)
  Research and development (3)                                               3,418.7                   3,501.0                   (2)
  Restructuring costs (4)                                                      929.4                     170.9                    *
  Equity income from affiliates                                             (1,840.7)                 (2,180.2)                 (16)
  Other (income) expense, net (5)                                           (2,197.4)                   (521.2)                   *

Income Before Taxes                                                          7,880.4                   6,551.2                    20

Taxes on Income (6)                                                          1,716.8                   1,644.9

Net Income                                                                 $6,163.6                  $4,906.3                     26

Average Shares Outstanding
 Assuming Dilution                                                           2,156.8                   2,187.4

Earnings per Common Share
 Assuming Dilution                                                             $2.86                      $2.24                   28


* > 100%

     (1) Includes restructuring costs of $90 million in the first nine months of 2008 and $366 million in the first nine months of 2007
     primarily related to accelerated depreciation associated with Merck’s global restructuring programs.
     (2) Includes the impact of reserving an additional $40 million in 2008 solely for future legal defense costs for FOSAMAX litigation
     and $280 million in 2007 solely for future legal defense costs for VIOXX litigation.
     (3) Includes restructuring costs of $31 million in 2008 and acquired research expense of $325 million related to the acquisition of
     NovaCardia, Inc. in 2007.
     (4) Restructuring costs represent separation and other related costs, as well as gains on sales of facilities and related assets in
     2008, associated with the global restructuring programs.
     (5) Other (income) expense, net in the first nine months of 2008 reflects a $2.2 billion gain related to a distribution from AstraZeneca
     LP, a $300 million expense for a contribution to The Merck Company Foundation, a $249 million gain on the sale of the Company's
     remaining worldwide rights to AGGRASTAT, $108 million of recognized losses in the Company’s investment portfolio and a $58
     million charge in connection with the resolution of an investigation into whether the Company violated state consumer protection
     laws with respect to the sales and marketing of VIOXX. Other (income) expense, net in the first nine months of 2007 primarily
     reflects the favorable impact of gains on sales of assets and product divestitures, as well as a net gain on the settlements of certain
     patent disputes.
     (6) The effective tax rate was 21.8% for the first nine months of 2008. The effective tax rate excluding the impacts of the gain on
     distribution from AstraZeneca LP and restructuring charges was 18.1% reflecting a net benefit of approximately six percentage
     points primarily relating to the favorable impact of tax settlements and the realization of foreign tax credits.

Más contenido relacionado

La actualidad más candente

hess 7/30/2008 Estimated Results for the Second Quarter of 2008
hess 7/30/2008	Estimated Results for the Second Quarter of 2008hess 7/30/2008	Estimated Results for the Second Quarter of 2008
hess 7/30/2008 Estimated Results for the Second Quarter of 2008finance8
 
AES 2Q 08 Review
AES 2Q 08 ReviewAES 2Q 08 Review
AES 2Q 08 Reviewfinance19
 
Pfizer Quarterly Corporate Performance
Pfizer Quarterly Corporate PerformancePfizer Quarterly Corporate Performance
Pfizer Quarterly Corporate Performancefinance5
 
caterpillar Cat Inc. Q4 2008
caterpillar Cat Inc. Q4 2008caterpillar Cat Inc. Q4 2008
caterpillar Cat Inc. Q4 2008finance5
 
raytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentationraytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentationfinance12
 
caterpillar Cat Financial Services Corp. Q1 2008
caterpillar 	Cat Financial Services Corp. Q1 2008caterpillar 	Cat Financial Services Corp. Q1 2008
caterpillar Cat Financial Services Corp. Q1 2008finance5
 
raytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentationraytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentationfinance12
 
q2_2008_presentation
q2_2008_presentationq2_2008_presentation
q2_2008_presentationfinance44
 
AES 4Q 07 Review
AES 4Q 07 ReviewAES 4Q 07 Review
AES 4Q 07 Reviewfinance19
 
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results finance40
 
ConAgra QAFY07Q1
ConAgra QAFY07Q1ConAgra QAFY07Q1
ConAgra QAFY07Q1finance21
 
pepsi bottling Non Gaap Investor Day121307
  	 pepsi bottling  Non Gaap Investor Day121307  	 pepsi bottling  Non Gaap Investor Day121307
pepsi bottling Non Gaap Investor Day121307finance19
 
raytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentationraytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentationfinance12
 

La actualidad más candente (13)

hess 7/30/2008 Estimated Results for the Second Quarter of 2008
hess 7/30/2008	Estimated Results for the Second Quarter of 2008hess 7/30/2008	Estimated Results for the Second Quarter of 2008
hess 7/30/2008 Estimated Results for the Second Quarter of 2008
 
AES 2Q 08 Review
AES 2Q 08 ReviewAES 2Q 08 Review
AES 2Q 08 Review
 
Pfizer Quarterly Corporate Performance
Pfizer Quarterly Corporate PerformancePfizer Quarterly Corporate Performance
Pfizer Quarterly Corporate Performance
 
caterpillar Cat Inc. Q4 2008
caterpillar Cat Inc. Q4 2008caterpillar Cat Inc. Q4 2008
caterpillar Cat Inc. Q4 2008
 
raytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentationraytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentation
 
caterpillar Cat Financial Services Corp. Q1 2008
caterpillar 	Cat Financial Services Corp. Q1 2008caterpillar 	Cat Financial Services Corp. Q1 2008
caterpillar Cat Financial Services Corp. Q1 2008
 
raytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentationraytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentation
 
q2_2008_presentation
q2_2008_presentationq2_2008_presentation
q2_2008_presentation
 
AES 4Q 07 Review
AES 4Q 07 ReviewAES 4Q 07 Review
AES 4Q 07 Review
 
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
 
ConAgra QAFY07Q1
ConAgra QAFY07Q1ConAgra QAFY07Q1
ConAgra QAFY07Q1
 
pepsi bottling Non Gaap Investor Day121307
  	 pepsi bottling  Non Gaap Investor Day121307  	 pepsi bottling  Non Gaap Investor Day121307
pepsi bottling Non Gaap Investor Day121307
 
raytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentationraytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentation
 

Destacado

Lambert Iclp2005 Slides
Lambert Iclp2005 SlidesLambert Iclp2005 Slides
Lambert Iclp2005 Slideslamberttony
 
Information of the Greatest Use
Information of the Greatest UseInformation of the Greatest Use
Information of the Greatest UseKen Fischer
 
STL Form processing
STL Form processingSTL Form processing
STL Form processingguesta9112a0
 
Ser Maestro 7
Ser Maestro 7Ser Maestro 7
Ser Maestro 7darckelin
 
AMR Merrill Lynch Pres.
AMR Merrill Lynch Pres.AMR Merrill Lynch Pres.
AMR Merrill Lynch Pres.finance11
 
Customer Driven Knowledge and Information Services
Customer Driven Knowledge and Information ServicesCustomer Driven Knowledge and Information Services
Customer Driven Knowledge and Information ServicesEric Schnell
 
Merck - Vioxx Controversy
Merck - Vioxx ControversyMerck - Vioxx Controversy
Merck - Vioxx ControversyTyler2191
 
An assessment of attitude towards selling livestock among the pastoralists in...
An assessment of attitude towards selling livestock among the pastoralists in...An assessment of attitude towards selling livestock among the pastoralists in...
An assessment of attitude towards selling livestock among the pastoralists in...ESAP
 

Destacado (11)

Lambert Iclp2005 Slides
Lambert Iclp2005 SlidesLambert Iclp2005 Slides
Lambert Iclp2005 Slides
 
Information of the Greatest Use
Information of the Greatest UseInformation of the Greatest Use
Information of the Greatest Use
 
STL Form processing
STL Form processingSTL Form processing
STL Form processing
 
Ser Maestro 7
Ser Maestro 7Ser Maestro 7
Ser Maestro 7
 
L'orso in casa n.9 - 13 dicembre 2013
L'orso in casa n.9 - 13 dicembre 2013L'orso in casa n.9 - 13 dicembre 2013
L'orso in casa n.9 - 13 dicembre 2013
 
Web 2
Web 2Web 2
Web 2
 
AMR Merrill Lynch Pres.
AMR Merrill Lynch Pres.AMR Merrill Lynch Pres.
AMR Merrill Lynch Pres.
 
Customer Driven Knowledge and Information Services
Customer Driven Knowledge and Information ServicesCustomer Driven Knowledge and Information Services
Customer Driven Knowledge and Information Services
 
Merck - Vioxx Controversy
Merck - Vioxx ControversyMerck - Vioxx Controversy
Merck - Vioxx Controversy
 
L'Orso in casa n.16 2014/2015
L'Orso in casa n.16 2014/2015L'Orso in casa n.16 2014/2015
L'Orso in casa n.16 2014/2015
 
An assessment of attitude towards selling livestock among the pastoralists in...
An assessment of attitude towards selling livestock among the pastoralists in...An assessment of attitude towards selling livestock among the pastoralists in...
An assessment of attitude towards selling livestock among the pastoralists in...
 

Similar a merck 3Q08 Earnings Release

merck 2Q08 Earnings Announcement
merck 2Q08 Earnings Announcementmerck 2Q08 Earnings Announcement
merck 2Q08 Earnings Announcementfinance11
 
merck 4Q08 Earnings Announcemen
merck 4Q08 Earnings Announcemenmerck 4Q08 Earnings Announcemen
merck 4Q08 Earnings Announcemenfinance11
 
merck 1Q08 Earnings Release
merck 1Q08 Earnings Releasemerck 1Q08 Earnings Release
merck 1Q08 Earnings Releasefinance11
 
merck 1Q08 Earnings Announcement
merck 1Q08 Earnings Announcementmerck 1Q08 Earnings Announcement
merck 1Q08 Earnings Announcementfinance11
 
raytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentationraytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentationfinance12
 
spectra energy Q308EarningsRelease
spectra energy Q308EarningsReleasespectra energy Q308EarningsRelease
spectra energy Q308EarningsReleasefinance49
 
raytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentationraytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentationfinance12
 
Pfizer Quarterly Corporate Performance - Second Quarter 2008
Pfizer Quarterly Corporate Performance - Second Quarter 2008Pfizer Quarterly Corporate Performance - Second Quarter 2008
Pfizer Quarterly Corporate Performance - Second Quarter 2008finance5
 
pepsi bottling library.corporate
  	 pepsi bottling library.corporate  	 pepsi bottling library.corporate
pepsi bottling library.corporatefinance19
 
public serviceenterprise group 3Q 2008 slides
public serviceenterprise group 3Q 2008 slidespublic serviceenterprise group 3Q 2008 slides
public serviceenterprise group 3Q 2008 slidesfinance20
 
public serviceenterprise group 3Q 2008 slides
public serviceenterprise group 3Q 2008 slidespublic serviceenterprise group 3Q 2008 slides
public serviceenterprise group 3Q 2008 slidesfinance20
 
goodrich 1Q08slides
goodrich  1Q08slidesgoodrich  1Q08slides
goodrich 1Q08slidesfinance44
 
caterpillar Quarterly Releases » • 3Q08 Cat Financial Results
caterpillar Quarterly Releases » • 3Q08 Cat Financial Resultscaterpillar Quarterly Releases » • 3Q08 Cat Financial Results
caterpillar Quarterly Releases » • 3Q08 Cat Financial Resultsfinance5
 
caterpillar Cat Financial Services Corp. Q3 2008
caterpillar  	Cat Financial Services Corp. Q3 2008caterpillar  	Cat Financial Services Corp. Q3 2008
caterpillar Cat Financial Services Corp. Q3 2008finance5
 
Caterpillar Financial Services Corp. Q3 2008
Caterpillar Financial Services Corp. Q3 2008Caterpillar Financial Services Corp. Q3 2008
Caterpillar Financial Services Corp. Q3 2008earningsreport
 
u.s.bancorp2Q 2008 Earnings Release
u.s.bancorp2Q 2008 Earnings Release u.s.bancorp2Q 2008 Earnings Release
u.s.bancorp2Q 2008 Earnings Release finance13
 
caterpillar Quarterly Releases1Q08 Cat Financial Results
caterpillar Quarterly Releases1Q08 Cat Financial Resultscaterpillar Quarterly Releases1Q08 Cat Financial Results
caterpillar Quarterly Releases1Q08 Cat Financial Resultsfinance5
 
COCA-COLA ENTERPRISES Q3 2008 RESULTS
COCA-COLA ENTERPRISES Q3 2008 RESULTSCOCA-COLA ENTERPRISES Q3 2008 RESULTS
COCA-COLA ENTERPRISES Q3 2008 RESULTSearningsreport
 
metlife Investor Day 2008 Finance
metlife 	Investor Day 2008 Financemetlife 	Investor Day 2008 Finance
metlife Investor Day 2008 Financefinance5
 
air products & chemicals fy 08 q2 earnings
air products & chemicals fy 08 q2 earningsair products & chemicals fy 08 q2 earnings
air products & chemicals fy 08 q2 earningsfinance26
 

Similar a merck 3Q08 Earnings Release (20)

merck 2Q08 Earnings Announcement
merck 2Q08 Earnings Announcementmerck 2Q08 Earnings Announcement
merck 2Q08 Earnings Announcement
 
merck 4Q08 Earnings Announcemen
merck 4Q08 Earnings Announcemenmerck 4Q08 Earnings Announcemen
merck 4Q08 Earnings Announcemen
 
merck 1Q08 Earnings Release
merck 1Q08 Earnings Releasemerck 1Q08 Earnings Release
merck 1Q08 Earnings Release
 
merck 1Q08 Earnings Announcement
merck 1Q08 Earnings Announcementmerck 1Q08 Earnings Announcement
merck 1Q08 Earnings Announcement
 
raytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentationraytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentation
 
spectra energy Q308EarningsRelease
spectra energy Q308EarningsReleasespectra energy Q308EarningsRelease
spectra energy Q308EarningsRelease
 
raytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentationraytheon Q4 Earnings Presentation
raytheon Q4 Earnings Presentation
 
Pfizer Quarterly Corporate Performance - Second Quarter 2008
Pfizer Quarterly Corporate Performance - Second Quarter 2008Pfizer Quarterly Corporate Performance - Second Quarter 2008
Pfizer Quarterly Corporate Performance - Second Quarter 2008
 
pepsi bottling library.corporate
  	 pepsi bottling library.corporate  	 pepsi bottling library.corporate
pepsi bottling library.corporate
 
public serviceenterprise group 3Q 2008 slides
public serviceenterprise group 3Q 2008 slidespublic serviceenterprise group 3Q 2008 slides
public serviceenterprise group 3Q 2008 slides
 
public serviceenterprise group 3Q 2008 slides
public serviceenterprise group 3Q 2008 slidespublic serviceenterprise group 3Q 2008 slides
public serviceenterprise group 3Q 2008 slides
 
goodrich 1Q08slides
goodrich  1Q08slidesgoodrich  1Q08slides
goodrich 1Q08slides
 
caterpillar Quarterly Releases » • 3Q08 Cat Financial Results
caterpillar Quarterly Releases » • 3Q08 Cat Financial Resultscaterpillar Quarterly Releases » • 3Q08 Cat Financial Results
caterpillar Quarterly Releases » • 3Q08 Cat Financial Results
 
caterpillar Cat Financial Services Corp. Q3 2008
caterpillar  	Cat Financial Services Corp. Q3 2008caterpillar  	Cat Financial Services Corp. Q3 2008
caterpillar Cat Financial Services Corp. Q3 2008
 
Caterpillar Financial Services Corp. Q3 2008
Caterpillar Financial Services Corp. Q3 2008Caterpillar Financial Services Corp. Q3 2008
Caterpillar Financial Services Corp. Q3 2008
 
u.s.bancorp2Q 2008 Earnings Release
u.s.bancorp2Q 2008 Earnings Release u.s.bancorp2Q 2008 Earnings Release
u.s.bancorp2Q 2008 Earnings Release
 
caterpillar Quarterly Releases1Q08 Cat Financial Results
caterpillar Quarterly Releases1Q08 Cat Financial Resultscaterpillar Quarterly Releases1Q08 Cat Financial Results
caterpillar Quarterly Releases1Q08 Cat Financial Results
 
COCA-COLA ENTERPRISES Q3 2008 RESULTS
COCA-COLA ENTERPRISES Q3 2008 RESULTSCOCA-COLA ENTERPRISES Q3 2008 RESULTS
COCA-COLA ENTERPRISES Q3 2008 RESULTS
 
metlife Investor Day 2008 Finance
metlife 	Investor Day 2008 Financemetlife 	Investor Day 2008 Finance
metlife Investor Day 2008 Finance
 
air products & chemicals fy 08 q2 earnings
air products & chemicals fy 08 q2 earningsair products & chemicals fy 08 q2 earnings
air products & chemicals fy 08 q2 earnings
 

Más de finance11

Calyon Conference Slides
	Calyon Conference Slides	Calyon Conference Slides
Calyon Conference Slidesfinance11
 
Credit Suisse Group Global Airline Conference Presentation
	Credit Suisse Group Global Airline Conference Presentation	Credit Suisse Group Global Airline Conference Presentation
Credit Suisse Group Global Airline Conference Presentationfinance11
 
AMR 2004 Proxy Statement
AMR 2004 Proxy StatementAMR 2004 Proxy Statement
AMR 2004 Proxy Statementfinance11
 
AMR 2005 Proxy Statement
AMR 	2005 Proxy StatementAMR 	2005 Proxy Statement
AMR 2005 Proxy Statementfinance11
 
AMR 2006 Proxy Statement
AMR 	2006 Proxy StatementAMR 	2006 Proxy Statement
AMR 2006 Proxy Statementfinance11
 
AMR 2006 Shareholders’ Meeting Voting Results
AMR 	2006 Shareholders’ Meeting Voting ResultsAMR 	2006 Shareholders’ Meeting Voting Results
AMR 2006 Shareholders’ Meeting Voting Resultsfinance11
 
AMR 2007 Proxy Statement
AMR 	2007 Proxy StatementAMR 	2007 Proxy Statement
AMR 2007 Proxy Statementfinance11
 
AMR 2007 Shareholders’ Meeting Voting Results
AMR 2007 Shareholders’ Meeting Voting ResultsAMR 2007 Shareholders’ Meeting Voting Results
AMR 2007 Shareholders’ Meeting Voting Resultsfinance11
 
AMR 2008 Proxy Statement
AMR 	2008 Proxy StatementAMR 	2008 Proxy Statement
AMR 2008 Proxy Statementfinance11
 
AMR 2008 Shareholders’ Meeting Voting Results
AMR 2008 Shareholders’ Meeting Voting ResultsAMR 2008 Shareholders’ Meeting Voting Results
AMR 2008 Shareholders’ Meeting Voting Resultsfinance11
 
AMR Annual Report 1997
AMR Annual Report 1997AMR Annual Report 1997
AMR Annual Report 1997finance11
 
AMR Annual Report 1998
AMR Annual Report 1998AMR Annual Report 1998
AMR Annual Report 1998finance11
 
AMR Annual Report 1999
AMR Annual Report 1999AMR Annual Report 1999
AMR Annual Report 1999finance11
 
AMR Annual Report 2000
AMR Annual Report 2000AMR Annual Report 2000
AMR Annual Report 2000finance11
 
AMR Annual Report 2001
AMR Annual Report 2001AMR Annual Report 2001
AMR Annual Report 2001finance11
 
AMR Annual Report 2002
AMR Annual Report 2002AMR Annual Report 2002
AMR Annual Report 2002finance11
 
AMR Annual Report 2003
AMR Annual Report 2003AMR Annual Report 2003
AMR Annual Report 2003finance11
 
AMR Annual Report 2004
AMR Annual Report 2004AMR Annual Report 2004
AMR Annual Report 2004finance11
 
AMR Annual Report 2005
AMR Annual Report 2005AMR Annual Report 2005
AMR Annual Report 2005finance11
 
AMR Annual Report 2006
AMR Annual Report 2006AMR Annual Report 2006
AMR Annual Report 2006finance11
 

Más de finance11 (20)

Calyon Conference Slides
	Calyon Conference Slides	Calyon Conference Slides
Calyon Conference Slides
 
Credit Suisse Group Global Airline Conference Presentation
	Credit Suisse Group Global Airline Conference Presentation	Credit Suisse Group Global Airline Conference Presentation
Credit Suisse Group Global Airline Conference Presentation
 
AMR 2004 Proxy Statement
AMR 2004 Proxy StatementAMR 2004 Proxy Statement
AMR 2004 Proxy Statement
 
AMR 2005 Proxy Statement
AMR 	2005 Proxy StatementAMR 	2005 Proxy Statement
AMR 2005 Proxy Statement
 
AMR 2006 Proxy Statement
AMR 	2006 Proxy StatementAMR 	2006 Proxy Statement
AMR 2006 Proxy Statement
 
AMR 2006 Shareholders’ Meeting Voting Results
AMR 	2006 Shareholders’ Meeting Voting ResultsAMR 	2006 Shareholders’ Meeting Voting Results
AMR 2006 Shareholders’ Meeting Voting Results
 
AMR 2007 Proxy Statement
AMR 	2007 Proxy StatementAMR 	2007 Proxy Statement
AMR 2007 Proxy Statement
 
AMR 2007 Shareholders’ Meeting Voting Results
AMR 2007 Shareholders’ Meeting Voting ResultsAMR 2007 Shareholders’ Meeting Voting Results
AMR 2007 Shareholders’ Meeting Voting Results
 
AMR 2008 Proxy Statement
AMR 	2008 Proxy StatementAMR 	2008 Proxy Statement
AMR 2008 Proxy Statement
 
AMR 2008 Shareholders’ Meeting Voting Results
AMR 2008 Shareholders’ Meeting Voting ResultsAMR 2008 Shareholders’ Meeting Voting Results
AMR 2008 Shareholders’ Meeting Voting Results
 
AMR Annual Report 1997
AMR Annual Report 1997AMR Annual Report 1997
AMR Annual Report 1997
 
AMR Annual Report 1998
AMR Annual Report 1998AMR Annual Report 1998
AMR Annual Report 1998
 
AMR Annual Report 1999
AMR Annual Report 1999AMR Annual Report 1999
AMR Annual Report 1999
 
AMR Annual Report 2000
AMR Annual Report 2000AMR Annual Report 2000
AMR Annual Report 2000
 
AMR Annual Report 2001
AMR Annual Report 2001AMR Annual Report 2001
AMR Annual Report 2001
 
AMR Annual Report 2002
AMR Annual Report 2002AMR Annual Report 2002
AMR Annual Report 2002
 
AMR Annual Report 2003
AMR Annual Report 2003AMR Annual Report 2003
AMR Annual Report 2003
 
AMR Annual Report 2004
AMR Annual Report 2004AMR Annual Report 2004
AMR Annual Report 2004
 
AMR Annual Report 2005
AMR Annual Report 2005AMR Annual Report 2005
AMR Annual Report 2005
 
AMR Annual Report 2006
AMR Annual Report 2006AMR Annual Report 2006
AMR Annual Report 2006
 

Último

Stock Market Brief Deck for March 19 2024.pdf
Stock Market Brief Deck for March 19 2024.pdfStock Market Brief Deck for March 19 2024.pdf
Stock Market Brief Deck for March 19 2024.pdfMichael Silva
 
Slideshare - ONS Economic Forum Slidepack - 18 March 2024.pptx
Slideshare - ONS Economic Forum Slidepack - 18 March 2024.pptxSlideshare - ONS Economic Forum Slidepack - 18 March 2024.pptx
Slideshare - ONS Economic Forum Slidepack - 18 March 2024.pptxOffice for National Statistics
 
2024.03 Strategic Resources Presentation
2024.03 Strategic Resources Presentation2024.03 Strategic Resources Presentation
2024.03 Strategic Resources PresentationAdnet Communications
 
Buy and Sell Urban Tots unlisted shares.pptx
Buy and Sell Urban Tots unlisted shares.pptxBuy and Sell Urban Tots unlisted shares.pptx
Buy and Sell Urban Tots unlisted shares.pptxPrecize Formely Leadoff
 
Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]Commonwealth
 
India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023SkillCircle
 
Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024Guillaume Ⓥ Sarlat
 
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdfAdnet Communications
 
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTESACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTESKumarJayaraman3
 
20240315 _E-Invoicing Digiteal. .pptx
20240315 _E-Invoicing Digiteal.    .pptx20240315 _E-Invoicing Digiteal.    .pptx
20240315 _E-Invoicing Digiteal. .pptxFinTech Belgium
 
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfLundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfAdnet Communications
 
The unequal battle of inflation and the appropriate sustainable solution | Eu...
The unequal battle of inflation and the appropriate sustainable solution | Eu...The unequal battle of inflation and the appropriate sustainable solution | Eu...
The unequal battle of inflation and the appropriate sustainable solution | Eu...Antonis Zairis
 
Taipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for TourismTaipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for TourismBrian Lin
 
Introduction to Entrepreneurship and Characteristics of an Entrepreneur
Introduction to Entrepreneurship and Characteristics of an EntrepreneurIntroduction to Entrepreneurship and Characteristics of an Entrepreneur
Introduction to Entrepreneurship and Characteristics of an Entrepreneurabcisahunter
 
Stock Market Brief Deck for 3/22/2024.pdf
Stock Market Brief Deck for 3/22/2024.pdfStock Market Brief Deck for 3/22/2024.pdf
Stock Market Brief Deck for 3/22/2024.pdfMichael Silva
 
Hungarys economy made by Robert Miklos
Hungarys economy   made by Robert MiklosHungarys economy   made by Robert Miklos
Hungarys economy made by Robert Miklosbeduinpower135
 
What Key Factors Should Risk Officers Consider When Using Generative AI
What Key Factors Should Risk Officers Consider When Using Generative AIWhat Key Factors Should Risk Officers Consider When Using Generative AI
What Key Factors Should Risk Officers Consider When Using Generative AI360factors
 
Work and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB fundingWork and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB fundingHenry Tapper
 

Último (20)

Stock Market Brief Deck for March 19 2024.pdf
Stock Market Brief Deck for March 19 2024.pdfStock Market Brief Deck for March 19 2024.pdf
Stock Market Brief Deck for March 19 2024.pdf
 
Slideshare - ONS Economic Forum Slidepack - 18 March 2024.pptx
Slideshare - ONS Economic Forum Slidepack - 18 March 2024.pptxSlideshare - ONS Economic Forum Slidepack - 18 March 2024.pptx
Slideshare - ONS Economic Forum Slidepack - 18 March 2024.pptx
 
2024.03 Strategic Resources Presentation
2024.03 Strategic Resources Presentation2024.03 Strategic Resources Presentation
2024.03 Strategic Resources Presentation
 
Buy and Sell Urban Tots unlisted shares.pptx
Buy and Sell Urban Tots unlisted shares.pptxBuy and Sell Urban Tots unlisted shares.pptx
Buy and Sell Urban Tots unlisted shares.pptx
 
Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]
 
India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023
 
Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024Sarlat Advisory - Corporate Brochure - 2024
Sarlat Advisory - Corporate Brochure - 2024
 
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
20240314 Calibre March 2024 Investor Presentation (FINAL).pdf
 
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTESACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
 
20240315 _E-Invoicing Digiteal. .pptx
20240315 _E-Invoicing Digiteal.    .pptx20240315 _E-Invoicing Digiteal.    .pptx
20240315 _E-Invoicing Digiteal. .pptx
 
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfLundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
 
The unequal battle of inflation and the appropriate sustainable solution | Eu...
The unequal battle of inflation and the appropriate sustainable solution | Eu...The unequal battle of inflation and the appropriate sustainable solution | Eu...
The unequal battle of inflation and the appropriate sustainable solution | Eu...
 
New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...
New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...
New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...
 
Taipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for TourismTaipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
 
Introduction to Entrepreneurship and Characteristics of an Entrepreneur
Introduction to Entrepreneurship and Characteristics of an EntrepreneurIntroduction to Entrepreneurship and Characteristics of an Entrepreneur
Introduction to Entrepreneurship and Characteristics of an Entrepreneur
 
Stock Market Brief Deck for 3/22/2024.pdf
Stock Market Brief Deck for 3/22/2024.pdfStock Market Brief Deck for 3/22/2024.pdf
Stock Market Brief Deck for 3/22/2024.pdf
 
Hungarys economy made by Robert Miklos
Hungarys economy   made by Robert MiklosHungarys economy   made by Robert Miklos
Hungarys economy made by Robert Miklos
 
What Key Factors Should Risk Officers Consider When Using Generative AI
What Key Factors Should Risk Officers Consider When Using Generative AIWhat Key Factors Should Risk Officers Consider When Using Generative AI
What Key Factors Should Risk Officers Consider When Using Generative AI
 
Work and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB fundingWork and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB funding
 
Monthly Economic Monitoring of Ukraine No.230, March 2024
Monthly Economic Monitoring of Ukraine No.230, March 2024Monthly Economic Monitoring of Ukraine No.230, March 2024
Monthly Economic Monitoring of Ukraine No.230, March 2024
 

merck 3Q08 Earnings Release

  • 1. News Release ______________________________________________________________________________ Media Contacts: David Caouette Investor Contacts: Eva Boratto (908) 423-3461 (908) 423-5185 Amy Rose Michael Nally (908) 423-6537 (908) 423-4465 Merck Reports Third-Quarter 2008 Financial Results • Company Announces Third-Quarter 2008 Non-GAAP EPS of $0.80, Excluding 29 Cents of Restructuring Charges; Third-Quarter GAAP EPS of $0.51 • 2008 Global Restructuring Efforts Expected to Reduce Workforce by 12 Percent; Cumulative Savings of $3.8 to $4.2 Billion Expected from 2008 to 2013 and Pretax Costs of $1.6 Billion to $2.0 Billion Through 2011 • JANUVIA and JANUMET, Treatments for Type 2 Diabetes, and ISENTRESS, Merck's HIV Medicine, Deliver Strong Growth as Worldwide Launches Continue • Merck Anticipates Full-Year 2008 EPS Range of $3.28 to $3.32, Excluding Certain Items, and GAAP 2008 EPS Range of $3.45 to $3.55 • Merck Anticipates 2005 to 2010 Compound Annual Non-GAAP EPS Growth in Mid-to- High Single-Digits, Excluding Certain Items; GAAP EPS Compound Annual Growth Rate Expected to Increase by Double-Digits Over Same Period WHITEHOUSE STATION, N.J., Oct. 22, 2008 – Merck & Co., Inc. today announced financial results for the third quarter of 2008, provided financial guidance for 2008 and 2010, and outlined additional steps in its continuing efforts to position the Company for success in a rapidly evolving industry. Merck reported non-GAAP (generally accepted accounting principles) earnings per share (EPS) of $0.80 for the third quarter of 2008, excluding $0.29 of restructuring charges. GAAP EPS for the third quarter were $0.51. Third quarter worldwide sales were $5.9 billion, a decrease of 2 percent from the third quarter of 2007. Foreign exchange for the third quarter favorably affected global sales performance by 4 percent. Net income for the third quarter of 2008 was $1,092.7 million compared with $1,525.5 million in the third quarter of 2007, which include aftertax restructuring charges of $612 million and $117 million, respectively. For the first - more -
  • 2. 2 nine months of 2008, worldwide sales were $17.8 billion and net income was $6,163.6 million. A reconciliation of EPS as reported in accordance with GAAP to EPS that excludes certain items is provided in the table that follows: Quarter Ended Sept. 30 Nine Months Ended Sept. 30 2008 2007 2008 2007 $ 0.51 $ 0.70 $ 2.86 $ 2.24 GAAP EPS 0.29 0.05 (0.31) 0.16 EPS impact of items* Non-GAAP EPS that excludes certain items listed below1 $ 0.80 $ 0.75 $ 2.55 $ 2.40 Third- Third- Nine Months Nine Months Quarter Quarter Ended Ended * Amount calculated as follows (in millions 2008 2007 Sept. 30, 2008 Sept. 30, 2007 except per share amounts) $- $- $(2,223) $- Gain on distribution from AstraZeneca Costs related to 2008 global restructuring 720 -- 720 -- program Costs related to 2005 global restructuring 127 178 330 536 program 847 178 (1,173) 536 Net decrease (increase) before income taxes (235) (61) 503 (185) Income tax (benefit) expense impact on above items $ 612 $117 $ (670) $ 351 Decrease (increase) in net income $ 0.29 $ 0.05 $ (0.31) $ 0.16 EPS impact of items quot;Merck's third quarter results show continued strong growth in a number of our recently launched products and the efficiencies we have realized throughout the business,quot; said Richard T. Clark, chairman, president and chief executive officer. quot;Since 2005, Merck has anticipated - more - 1 Merck is providing information on 2008 and 2007 non-GAAP earnings per share 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, earnings per share prepared in accordance with GAAP.
  • 3. 3 and aggressively prepared for the changing industry environment by restructuring our business and transforming the way in which we discover, manufacture and provide our products. quot;Our focus remains on increasing revenue from our new and in-line products, fully funding innovative R&D, investing in growth opportunities, such as emerging markets, and becoming the most trusted partner in delivering value to our customers. With the right long-term strategy and our efforts to reshape Merck's business, including today's actions, I am confident we are building a solid foundation for achieving industry-leading performance in the future,quot; Clark added. quot;However, our current sales trends for key products, compounded by known industry and emerging economic factors, have led us to reassess the environment in which we expect to be operating between now and 2010,quot; he said. quot;In light of these considerations, we have revised our financial guidance over this time period.quot; Quarterly Financial Highlights Materials and production costs were $1.5 billion for the quarter, a decrease of 3 percent from the third quarter of 2007. The third-quarter costs for 2008 and 2007 include $59 million and $129 million, respectively, for expenses associated with the Company's global restructuring programs. The gross margin was 75.1 percent for the third quarter of 2008 and includes a 1 percentage point unfavorable impact from restructuring costs. For the third quarter of 2007, gross margin was 75.0 percent and reflected a 2.1 percentage point unfavorable impact due to restructuring costs. Marketing and administrative expenses were $1.7 billion for the third quarter of 2008, a decrease of 11 percent from the third quarter of 2007. Included in marketing and administrative expenses in the third quarter of 2007 was a $70 million reserve solely for future legal defense costs for VIOXX litigation. Research and development expenses were $1.2 billion for the quarter, a decrease of 19 percent from the third quarter of 2007. Expenses for the third quarter include $31 million for costs associated with the Company's global restructuring programs. For the third quarter of 2007, research and development expenses included a $325 million acquired research charge associated with the purchase of NovaCardia, Inc. Research and development expenses grew 2 percent for the quarter adjusting for the NovaCardia charge in 2007 and restructuring in 2008. Restructuring costs, primarily related to employee separation costs associated with the Company's global restructuring programs, were $757 million for the third quarter of 2008 and - more -
  • 4. 4 $49 million for the third quarter of 2007. Of that third quarter 2008 total, $102 million were from the 2005 program and $655 million were from the 2008 program announced today. Total overall costs associated with the Company's global restructuring programs included in materials and production, research and development, and restructuring costs were $847 million and $178 million for the third quarter of 2008 and 2007, respectively, primarily comprised of employee separations and accelerated depreciation. Equity income from affiliates was $666 million in the third quarter of 2008, a decrease of 13 percent from the third quarter of 2007 as a result of lower contributions from the Merck/Schering-Plough joint venture and AstraZeneca LP. Other (income) expense, net, for the third quarter was $62 million and includes the impact of $88 million of recognized losses in the Company’s investment portfolio. During the quarter, Merck maintained a balance of approximately $19 billion in cash and investments, which includes nearly $6 billion that has been pledged as collateral for certain items, including the VIOXX settlement. Merck's third-quarter 2008 effective tax rate was 22.6 percent. The effective tax rate excluding the impact of restructuring charges was 24.5 percent. Global Restructuring Efforts Merck remains confident in the progress it is making in creating a new business model that is more customer-centric, more agile and has a variable cost structure that enables investment in key growth areas such as research and development and new products and markets. Merck today outlined the next steps in the Company's ongoing efforts to reduce its cost structure, increase efficiency and enhance competitiveness. As part of the 2008 restructuring plan, Merck expects to eliminate approximately 7,200 positions — 6,800 active employees and 400 vacancies — across all areas of the Company worldwide by the end of 2011. About 40 percent of the total reductions will occur in the United States. To streamline management layers across the Company, Merck will reduce its total number of senior and mid-level executives by approximately 25 percent. These positions are in addition to the 10,400 positions eliminated as part of the 2005 restructuring program, which was substantially complete at the end of September 2008. As of Sept. 30, Merck has approximately 56,700 employees. The restructuring effort will involve all areas of the Company. For example, Merck will accelerate the rollout of a new, more customer-centric selling model designed to provide Merck with a meaningful competitive advantage and help physicians, patients and payers, improve - more -
  • 5. 5 patient outcomes. The Company also will make greater use of outside technology resources, centralize common sales and marketing activities, and consolidate and streamline its operations. Merck's manufacturing division will further focus its capabilities on core products and outsource non-core manufacturing. In addition, Merck is enhancing its research operations to expand access to worldwide external science and incorporate it as a key component of the Company's pipeline, and ensure a more sustainable pipeline by translating basic research productivity into late-stage clinical success. As a result, basic research operations will be organized to consolidate work in support of a given therapeutic area into one of four locations. This will provide a more efficient use of research facilities and result in the closure of three basic research sites in Tsukuba, Japan; Pomezia, Italy; and Seattle by the end of 2009. Merck expects the 2008 program to yield cumulative pretax savings of $3.8 billion to $4.2 billion from 2008 to 2013. These are in addition to the cumulative pretax savings of $4.5 to $5.0 billion which the Company remains on track to achieve at the end of the 2005 – 2010 period. The Company anticipates pretax restructuring costs of $250 million to $450 million will be recorded in the fourth quarter of this year. This global restructuring program is expected to be completed by the end of 2011 with the total pretax costs estimated to be $1.6 billion to $2.0 billion. The Company estimates that two-thirds of the cumulative pretax costs will result in future cash outlays, primarily from employee separation expense. Approximately one-third of the cumulative pretax costs are non-cash, relating primarily to the accelerated depreciation of facilities to be closed or divested. Financial Guidance Merck anticipates a full-year 2008 non-GAAP EPS range of $3.28 to $3.32 that adjusts for certain items and a 2008 GAAP EPS range of $3.45 to $3.55. The 2008 GAAP guidance includes: • A pretax charge of approximately $1.3 billion to $1.5 billion associated with the Company's global restructuring programs. • The $2.2 billion pretax gain from a distribution from the AstraZeneca limited partnership. - more -
  • 6. 6 A reconciliation of anticipated 2008 EPS as reported in accordance with GAAP to non- GAAP EPS that adjusts for certain items is provided in the table that follows: Full-Year 2008 GAAP EPS $3.45 to $3.55 EPS impact of items* $(0.17) to $(0.23) Non-GAAP EPS that excludes certain items $3.28 to $3.32 listed below * Amount calculated as follows (in millions except Full-Year 2008 per share amounts) Costs related to the global restructuring programs $1,500 to $1,300 Gain on distribution from AstraZeneca (2,223) Net (increase) decrease before income taxes (723) to (923) Income tax expense (benefit) on above items 367 to 427 (Increase) decrease in net income $(356) to $(496) EPS impact of items $(0.17) to $(0.23) Details on Merck's full-year 2008 financial guidance can be found on page 11 of this news release. The Company had previously provided guidance on the 2005 to 2010 time period. Merck anticipates non-GAAP revenues, including 50 percent of the revenues from our joint ventures, will have a compound annual growth rate of 2 to 4 percent from 2005 to 2010. Merck's GAAP reported sales, excluding 50 percent of the revenues from our joint ventures, is expected to have a compound annual growth rate of 1 to 3 percent from 2005 to 2010. Non-GAAP EPS compound annual growth rate from 2005 to 2010 is expected to be in the mid-to-high single-digits, excluding certain items. Merck anticipates EPS compound annual growth rate on a GAAP basis to increase by double-digits over the same period. The non-GAAP EPS guidance excludes restructuring charges and net tax charges of $0.43 per share in 2005 and charges related to the 2008 restructuring program of $100 million to $400 million in 2010. For the purpose of the 2010 guidance, the Company is excluding any one-time gains that may result from AstraZeneca exercising its option with respect to AstraZeneca LP. - more -
  • 7. 7 Product Performance Highlights JANUVIA (sitagliptin), Merck's first-in-class DPP-4 inhibitor for the treatment of type 2 diabetes, recorded worldwide sales of $379 million in the third quarter of 2008 compared with $185 million in the same quarter in 2007. JANUMET (sitagliptin/metformin hydrochloride), a single tablet that targets all three key defects of type 2 diabetes, recorded sales of $101 million during the quarter compared with $19 million in the same quarter in 2007. Worldwide sales of ISENTRESS (raltegravir), Merck's first-in-class HIV integrase inhibitor for use in combination with other antiretroviral agents for the treatment of HIV-1 infection in treatment-experienced adult patients, were $107 million in third-quarter 2008. Merck launched ISENTRESS in the United States in October 2007. Total worldwide sales of Merck's other promoted medicines, which include JANUVIA, JANUMET and ISENTRESS, were $2.0 billion for the third quarter, representing a 21 percent increase compared with the third quarter of 2007. Merck's portfolio of medicines are approved to treat a broad range of medical conditions, including glaucoma, migraine, pain, diabetes, HIV/AIDS and other infectious diseases. Worldwide sales of SINGULAIR (montelukast sodium), a once-a-day oral medicine indicated for the chronic treatment of asthma and the relief of symptoms of allergic rhinitis, were $1.0 billion for the third quarter of 2008, an increase of 1 percent compared with the third quarter of 2007. SINGULAIR continues to be the No. 1 prescribed branded product in the U.S. respiratory market2. Combined worldwide sales of ZETIA (ezetimibe) and VYTORIN (ezetimibe/simvastatin), as reported by the Merck/Schering-Plough joint venture, were $1.1 billion for the third quarter of 2008, representing a 15 percent decrease compared with the third quarter of 2007. Worldwide sales of ZETIA, marketed as EZETROL outside the United States, were $534 million in the third quarter of 2008, a decrease of 12 percent compared with the previous year's third quarter. Third-quarter 2008 worldwide sales of VYTORIN, marketed outside the United States as INEGY, were $567 million, a decrease of 18 percent compared with the third quarter of 2007. The Company records the results from its interest in the Merck/Schering-Plough joint venture in equity income from affiliates. Worldwide sales of Merck's antihypertensive medicines COZAAR (losartan potassium) and HYZAAR3 (losartan potassium and hydrochlorothiazide) were $888 million for the third - more - 2 Source: IMS NPA 3 COZAAR and HYZAAR are registered trademarks of E.I. duPont de Nemours and Company, Wilmington, Del.
  • 8. 8 quarter of 2008, a 9 percent increase compared with the third quarter of 2007. COZAAR and HYZAAR are among the leading medicines in the angiotensin receptor blocker class. Worldwide sales of FOSAMAX (alendronate sodium) and FOSAMAX PLUS D (alendronate sodium/cholecalciferol), which is marketed as FOSAVANCE throughout the European Union, were $354 million for the third quarter of 2008, representing a decrease of 51 percent compared with the third quarter of 2007. Since most formulations of these medicines have lost U.S. marketing exclusivity, the Company is experiencing a significant decline in sales in the United States within the FOSAMAX franchise. Worldwide sales of the Company's cervical cancer vaccine GARDASIL (human papillomavirus (HPV) quadrivalent (types 6, 11, 16, 18) vaccine, recombinant) as recorded by Merck, were $401 million for the third quarter of 2008, a decrease of 4 percent from the third quarter of 2007. Vaccines in most major European markets are sold through the Company’s joint venture, Sanofi Pasteur-MSD, and the results from its interest in the joint venture are recorded in equity income from affiliates. ZOSTAVAX, the Company’s vaccine to help prevent shingles (herpes zoster), recorded sales of $11 million for the third quarter of 2008 as compared to $61 million for the third quarter of 2007. Sales in the quarter were impacted by bulk vaccine supply issues that caused delays in the fulfillment of customer orders. Merck expects to fill the current customer back orders by the end of the year. Worldwide sales of ROTATEQ (rotavirus vaccine, live, oral, pentavalent), Merck's vaccine to help protect children against rotavirus gastroenteritis and one of the world's leading rotavirus vaccines, as recorded by Merck, were $134 million in the third quarter of 2008, a decrease of 21 percent from the third quarter of 2007. In third quarter 2007, the Company recognized $51 million in revenue as a result of a government purchase for the Center for Disease Control and Prevention's Strategic National Stockpile. Worldwide sales of Merck's other viral vaccines, which include VARIVAX (varicella virus vaccine live), M-M-R II (measles, mumps and rubella virus vaccine live) and PROQUAD (measles, mumps, rubella and varicella virus vaccine live), as recorded by Merck, were $430 million for the third quarter of 2008, comparable with the same period a year earlier. In addition, Merck now anticipates that the Company's HIB-containing vaccines, PedvaxHIB and COMVAX, will return to the U.S. market in mid-2009. Merck records ongoing revenue based on sales of products that are associated with alliances, the most significant of which is AstraZeneca LP. Revenue from AstraZeneca LP recorded by Merck was $375 million in the third quarter of 2008. - more -
  • 9. 9 TREDAPTIVE/CORDAPTIVE Update The launch of TREDAPTIVE/CORDAPTIVE in Europe and other markets will be delayed due to a manufacturing-related issue. Merck is committed to quickly resolving the issue and to making TREDAPTIVE/CORDAPTIVE available as soon as possible. Last week, Oxford University issued a press release announcing that it expects to enroll an additional 5,000 patients in the HPS2-THRIVE study to increase the total study population size to 25,000 patients. The study was initially expected to be complete in 2013; the addition of the 5,000 patients may allow the study to be completed earlier. Earnings Conference Call Investors are invited to a live audio webcast of Merck's third-quarter sales and earnings conference call today at 9:00 a.m. EDT by visiting the Newsroom section of Merck's Web site, www.merck.com/newsroom/webcast/. Institutional investors and analysts can participate in the call by dialing (706) 758-9927 or (877) 381-5782. Journalists are invited to listen in on the call by dialing (706) 758-9928 or (800) 399-7917. A replay of the webcast will be available starting at 12 p.m. EDT today through 5 p.m. EDT on Oct. 29. To listen to the replay, dial (706) 645- 9291 or (800) 642-1687 and enter ID No. 65968968. About Merck Merck & Co., Inc. is a global research-driven pharmaceutical company dedicated to putting patients first. Established in 1891, Merck discovers, develops, manufactures and markets vaccines and medicines to address unmet medical needs. The Company devotes extensive efforts to increase access to medicines through far-reaching programs that not only donate Merck medicines but help deliver them to the people who need them. Merck also publishes unbiased health information as a not-for-profit service. For more information, visit www.merck.com. Forward-Looking Statement This news release, including the financial information that follows, contains quot;forward- looking statementsquot; as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and involve risks and uncertainties, which may cause results to differ materially from those set forth in the statements. The forward-looking statements may include statements regarding product development, product potential or financial performance. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. Merck undertakes no - more -
  • 10. 10 obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Forward-looking statements in this press release should be evaluated together with the many uncertainties that affect Merck's business, particularly those mentioned in the risk factors and cautionary statements in Item 1A of Merck's Form 10-K for the year ended Dec. 31, 2007 and in any risk factors or cautionary statements contained in the Company's periodic reports on Form 10-Q or current reports on Form 8-K, which the Company incorporates by reference. ###
  • 11. 11 Merck Financial Guidance for 2008 Worldwide sales will be driven by the Company’s major products, including the impact of new studies and indications. Sales forecasts for those products for 2008 are as follows: WORLDWIDE PRODUCT 2008 SALES SINGULAIR (Respiratory) $4.3 to $4.5 billion COZAAR/HYZAAR (Hypertension) $3.5 to $3.7 billion GARDASIL (as recorded by Merck & Co., Inc.) $1.4 to $1.6 billion Other Vaccines (as recorded by Merck & Co., Inc.) $2.6 to $2.8 billion FOSAMAX (Osteoporosis) $1.4 to $1.7 billion Other reported products* $7.8 to $8.2 billion * Other reported products comprise: ARCOXIA, CANCIDAS, COSOPT, CRIXIVAN, EMEND, INVANZ, ISENTRESS, JANUVIA, JANUMET, MAXALT, PRIMAXIN, PROPECIA, PROSCAR, STOCRIN, TIMOPTIC/TIMOPTIC XE, TRUSOPT, VASOTEC/VASERETIC, ZOCOR and ZOLINZA. • Under an agreement with AstraZeneca (AZN), Merck receives revenue at predetermined percentages of the U.S. sales of certain products by AZN, most notably NEXIUM. In 2008, Merck anticipates that these revenues will be approximately $1.5 billion to $1.7 billion. • Equity income from affiliates includes the results of the Merck and Schering-Plough collaboration and Sanofi-Pasteur MSD combined with the results of Merck’s other joint venture relationships. Equity income from affiliates is expected to be approximately $2.3 billion to $2.5 billion for 2008. • Product gross margin (PGM) percentage is estimated to be approximately 77 percent to 78 percent for the full-year 2008. This guidance excludes the portion of the restructuring costs that will be included in product costs and will affect reported PGM in 2008. • Marketing and administrative expense is anticipated to be approximately $7.4 billion to $7.6 billion. • Research and development expense (which excludes joint ventures) is anticipated to be approximately $4.7 billion to $4.9 billion. • As part of the Company’s restructuring of its operations, additional costs related to site closings, position eliminations and related costs will be incurred in 2008. The aggregate 2008 pretax expense related to these activities is estimated to be in the range of $1.3 billion to $1.5 billion. • The consolidated 2008 tax rate is estimated to be approximately 18 percent to 21 percent. This guidance does not reflect the tax rate impact of the gain on distribution from AstraZeneca or restructuring costs. The effective tax rate to be applied to the AstraZeneca gain and the Company’s restructuring costs is at a higher level than the underlying effective tax rate guidance. • Merck plans to continue its stock buyback program in 2008. As of Sept. 30, 2008, $2.6 billion remains under the current buyback authorizations approved by Merck’s Board of Directors. Given these guidance elements, Merck anticipates full-year 2008 non-GAAP EPS of $3.28 to $3.32, excluding certain items, and 2008 GAAP EPS in the range of $3.45 to $3.55. ###
  • 12. 12 The following table shows the financial results for Merck & Co., Inc. and subsidiaries for the quarter ended September 30, 2008, compared with the corresponding period of the prior year. Merck & Co., Inc. Consolidated Results (In Millions Except Earnings per Common Share) Quarter Ended September 30 (Unaudited) % 2008 2007 Change Sales $5,943.9 $6,074.1 (2)% Costs, Expenses and Other Materials and production (1) 1,477.9 1,517.7 (3) Marketing and administrative (2) 1,730.3 1,951.4 (11) Research and development (3) 1,171.1 1,440.5 (19) Restructuring costs (4) 757.5 49.3 * Equity income from affiliates (665.6) (768.5) (13) Other (income) expense, net (5) 61.8 (180.9) * Income Before Taxes 1,410.9 2,064.6 (32) Taxes on Income (6) 318.2 539.1 Net Income $1,092.7 $1,525.5 (28) Average Shares Outstanding Assuming Dilution 2,135.6 2,192.8 Earnings per Common Share Assuming Dilution $0.51 $0.70 (27) * > 100% (1) Includes restructuring costs of $59 million in the third quarter of 2008 and $129 million in the third quarter of 2007 primarily related to accelerated depreciation associated with Merck’s global restructuring programs. (2) Includes the impact of reserving an additional $70 million in the third quarter of 2007 solely for future legal defense costs for VIOXX litigation. (3) Includes restructuring costs of $31 million in the third quarter of 2008. Includes acquired research expense of $325 million related to the acquisition of NovaCardia, Inc. in the third quarter of 2007. (4) Restructuring costs represent separation and other related costs associated with the global restructuring programs. (5) Includes $88 million of recognized losses in the Company’s investment portfolio in the third quarter of 2008. Includes a net gain of approximately $100 million in the third quarter of 2007 related to the settlements of certain patent disputes. (6) The third quarter 2008 effective tax rate was 22.6%. The effective tax rate excluding the impact of restructuring charges was 24.5%.  
  • 13. 13 The following table shows the financial results for Merck & Co., Inc. and subsidiaries for the nine months ended September 30, 2008, compared with the corresponding period of the prior year. Merck & Co., Inc. Consolidated Results (In Millions Except Earnings per Common Share) Nine Months Ended September 30 (Unaudited) % 2008 2007 Change Sales $17,817.9 $17,954.8 (1)% Costs, Expenses and Other Materials and production (1) 4,112.5 4,595.9 (11) Marketing and administrative (2) 5,515.0 5,837.2 (6) Research and development (3) 3,418.7 3,501.0 (2) Restructuring costs (4) 929.4 170.9 * Equity income from affiliates (1,840.7) (2,180.2) (16) Other (income) expense, net (5) (2,197.4) (521.2) * Income Before Taxes 7,880.4 6,551.2 20 Taxes on Income (6) 1,716.8 1,644.9 Net Income $6,163.6 $4,906.3 26 Average Shares Outstanding Assuming Dilution 2,156.8 2,187.4 Earnings per Common Share Assuming Dilution $2.86 $2.24 28 * > 100% (1) Includes restructuring costs of $90 million in the first nine months of 2008 and $366 million in the first nine months of 2007 primarily related to accelerated depreciation associated with Merck’s global restructuring programs. (2) Includes the impact of reserving an additional $40 million in 2008 solely for future legal defense costs for FOSAMAX litigation and $280 million in 2007 solely for future legal defense costs for VIOXX litigation. (3) Includes restructuring costs of $31 million in 2008 and acquired research expense of $325 million related to the acquisition of NovaCardia, Inc. in 2007. (4) Restructuring costs represent separation and other related costs, as well as gains on sales of facilities and related assets in 2008, associated with the global restructuring programs. (5) Other (income) expense, net in the first nine months of 2008 reflects a $2.2 billion gain related to a distribution from AstraZeneca LP, a $300 million expense for a contribution to The Merck Company Foundation, a $249 million gain on the sale of the Company's remaining worldwide rights to AGGRASTAT, $108 million of recognized losses in the Company’s investment portfolio and a $58 million charge in connection with the resolution of an investigation into whether the Company violated state consumer protection laws with respect to the sales and marketing of VIOXX. Other (income) expense, net in the first nine months of 2007 primarily reflects the favorable impact of gains on sales of assets and product divestitures, as well as a net gain on the settlements of certain patent disputes. (6) The effective tax rate was 21.8% for the first nine months of 2008. The effective tax rate excluding the impacts of the gain on distribution from AstraZeneca LP and restructuring charges was 18.1% reflecting a net benefit of approximately six percentage points primarily relating to the favorable impact of tax settlements and the realization of foreign tax credits.