|Wednesday, 01 May 2013 01:08|
Non-GAAP (generally accepted accounting principles) earnings per share (EPS) for the first quarter of $0.85 exclude acquisition-related costs, restructuring costs and how to get cialis no prescription certain other items. First quarter non-GAAP EPS included unanticipated net tax benefits of approximately $0.06 per share.
A reconciliation of GAAP to non-GAAP net income and order cialis EPS is provided in the tables that follow.
“Our first quarter performance reflects the challenges of major patent expiries coupled with the impact of currency and cialis brand other headwinds,” said Kenneth C. Frazier, chairman and fda approved viagra chief executive officer, Merck. “During the quarter, we took focused actions to reach our EPS target while at the same time advancing Merck’s pipeline in our laboratories and canadian pharmacy cialis pfizer through strategic deals and pfizer viagra canada partnerships. I remain confident in the future opportunities for our strong and viagra australia diverse business and buy pfizer viagra committed to delivering long-term value to our shareholders.”
Select Revenue Highlights
Worldwide sales were $10.7 billion for the first quarter of 2013, a decrease of 9 percent compared with the first quarter of 2012, including a 2 percent negative effect from foreign exchange.
The following table reflects sales of the company's top pharmaceutical products, as well as total sales of animal health and cialis on sale consumer care products.
Pharmaceutical Revenue Performance
First-quarter pharmaceutical sales declined 12 percent to $8.9 billion, including a 2 percent negative impact due to foreign exchange. Declines of SINGULAIR (montelukast sodium), MAXALT (rizatriptan benzoate) and CLARINEX (desloratadine) following loss of market exclusivity were partially offset by strong growth for GARDASIL [Human Papillomavirus Quadrivalent (Types 6, 11, 16 and 18) Vaccine, Recombinant], ZOSTAVAX (zoster vaccine live), REMICADE (infliximab), SIMPONI (golimumab) and ISENTRESS (raltegravir).
Sales from emerging markets grew 6 percent, including a 2 percent negative impact from foreign exchange. Emerging market sales accounted for approximately 21 percent of pharmaceutical sales in the first quarter of 2013. China continues to be a key driver of growth in the emerging markets with sales increasing 23 percent for the first quarter, including a 2 percent benefit from foreign exchange.
Worldwide sales of the combined diabetes franchise of JANUVIA (sitagliptin)/JANUMET (sitagliptin/metformin HCI) declined 1 percent to $1.3 billion in the first quarter, including a 2 percent negative impact from foreign exchange. The decline reflects lower sales in the United States of 5 percent, primarily driven by reduced customer inventory levels, which were partially offset by growth in the rest of the world.
Sales of ZETIA (ezetimibe) and VYTORIN (ezetimibe/simvastatin), medicines for lowering LDL cholesterol, declined 3 percent to $1.0 billion in the first quarter driven by lower sales of VYTORIN, partially offset by growth of ZETIA in the United States.
Combined sales of REMICADE and SIMPONI, treatments for inflammatory diseases, increased 11 percent to $657 million in the first quarter of 2013.
Merck’s sales of GARDASIL, a vaccine to help prevent certain diseases caused by four types of human papillomavirus (HPV), were $390 million, an increase of 37 percent for the quarter. The increase was driven by higher sales in the United States, reflecting continued strong uptake in males and viagra seizures higher public sector purchases, as well as favorable performance in the emerging markets.
ISENTRESS, an HIV integrase inhibitor for use in combination with other antiretroviral agents for the treatment of HIV-1 infection, grew 8 percent to $362 million in the first quarter driven by strong growth in the emerging markets and viagra sample Europe.
Worldwide sales of SINGULAIR, a once-a-day oral medicine for the chronic treatment of asthma and online order viagra overnight delivery the relief of symptoms of allergic rhinitis, declined 75 percent to $337 million in the first quarter. The patents for SINGULAIR expired in the United States in August 2012 and expired in major European markets in February 2013. The company experienced a significant and buy discount viagra rapid reduction in sales in the United States and is now also experiencing a substantial decline in Europe.
Sales of VICTRELIS (boceprevir), the company's oral hepatitis C virus protease inhibitor, declined 1 percent in the first quarter to $110 million, including a 2 percent negative impact from foreign exchange. Lower sales in the United States were partially offset by continued growth in international markets.
Sales of ZOSTAVAX, a vaccine for the prevention of herpes zoster, were $168 million in the first quarter of 2013, up from $76 million in the first quarter of 2012, driven by strong demand in the United States.
Animal Health Revenue Performance
Animal Health sales totaled $840 million for the first quarter of 2013, a 2 percent increase compared with the first quarter of 2012, including a 2 percent negative impact due to foreign exchange. The increase was driven by strong performance in companion animal products, including sales of ACTIVYL, a new product for the treatment and prevention of fleas and ticks in dogs and cats, as well as continued growth in poultry products. Animal Health products include pharmaceutical and vaccine products for the prevention, treatment and control of disease in all major farm and companion animal species.
Consumer Care Revenue Performance
First-quarter global sales of Consumer Care were $571 million, an increase of 3 percent compared to the first quarter of 2012, including a 1 percent negative impact due to foreign exchange. The sales increase was primarily due to COPPERTONE suncare products and CLARITIN.
Other Revenue Performance
Other revenues – primarily comprising alliance revenue, miscellaneous corporate revenues and third-party manufacturing sales – increased 34 percent to $369 million compared to the first quarter of 2012. The increase was primarily driven by higher revenue from AstraZeneca LP (AZLP) recorded by Merck, which increased 41 percent to $262 million as compared with atypically lower first quarter 2012 AZLP revenues.
First-Quarter Expense and Other Information
The costs detailed below totaled $9.0 billion on a GAAP basis during the first quarter of 2013 and include $1.4 billion of acquisition-related costs and restructuring costs.
The gross margin was 62.9 percent for the first quarter of 2013 and 65.6 percent for the first quarter of 2012, reflecting 11.5 and 10.5 percentage point unfavorable impacts, respectively, from the acquisition-related costs and restructuring costs noted above. The gross margin decline primarily reflects the impact of the SINGULAIR patent expiries.
Marketing and administrative expenses, on a non-GAAP basis, were $2.9 billion in the first quarter of 2013, a decrease from $3.0 billion in the first quarter of 2012.
Research and development (R&D) expenses, on a non-GAAP basis, were $1.9 billion in the first quarter of 2013, an increase from $1.8 billion in the first quarter of 2012.
Equity income from affiliates was $133 million for the first quarter, primarily reflecting the performance of partnerships with AZLP and Sanofi Pasteur MSD.
Other (income) expense, net was $282 million of expense in the first quarter of 2013, compared to $142 million of expense in the first quarter of 2012. The first quarter of 2013 includes approximately $140 million of exchange losses due to a Venezuelan currency devaluation.
The GAAP effective tax rate of (4.3)% for the first quarter of 2013 reflects the impact of acquisition-related costs and restructuring costs, as well as an out-of-period tax benefit of approximately $160 million associated with the resolution of a previously disclosed legacy Schering-Plough federal income tax issue. The non-GAAP effective tax rate, which excludes these items, was 12.5% for the quarter. Both the GAAP and non-GAAP first quarter effective tax rates reflect the favorable impact of tax legislation enacted in the first quarter of 2013. The first quarter 2013 tax rates also reflect the net favorable impact of other discrete items, primarily a reduction in tax reserves upon expiration of applicable statute of limitations, which resulted in unanticipated net tax benefits of approximately $0.06 per share as noted above.
The company noted the following developments:
Merck now expects full-year 2013 non-GAAP EPS to be between $3.45 and $3.55, and 2013 GAAP EPS to be between $1.92 and $2.16. The 2013 non-GAAP range excludes acquisition-related costs, costs related to restructuring programs and certain other items. The company updated its full-year guidance due to pressures on sales that are greater than previously anticipated, including foreign exchange, as well as new R&D programs and a revised tax rate.
At current exchange rates, Merck now expects full-year 2013 sales to be approximately 3 to 4 percent below prior year levels with foreign exchange accounting for more than 2 percentage points of the decline.
In addition, the company now expects full-year 2013 non-GAAP R&D expense to be slightly higher than 2012 levels. The company now expects its full-year 2013 non-GAAP tax rate to be in the range of 22 to 23 percent.
A reconciliation of anticipated 2013 EPS, as reported in accordance with GAAP to non-GAAP EPS that excludes certain items, is provided in the table below.
As of March 31, 2013, Merck had approximately 82,000 employees worldwide.
Earnings Conference Call
Investors, journalists and the general public may access a live audio webcast of the call today at 8:00 a.m. EDT on Merck’s website at http://www.merck.com/investors/events-and-presentations/home.html. Institutional investors and analysts can participate in the call by dialing (706) 758-9927 or (877) 381-5782 and using ID code number 22104203. Members of the media are invited to monitor the call by dialing (706) 758-9928 or (800) 399-7917 and using ID code number 22104203. Journalists who wish to ask questions are requested to contact a member of Merck's Media Relations team at the conclusion of the call.
Today's Merck is a global healthcare leader working to help the world be well. Merck is known as MSD outside the United States and Canada. Through our prescription medicines, vaccines, biologic therapies, and consumer care and animal health products, we work with customers and operate in more than 140 countries to deliver innovative health solutions. We also demonstrate our commitment to increasing access to healthcare through far-reaching policies, programs and partnerships. For more information, visit www.merck.com and connect with us on Twitter, Facebook and YouTube.
This news release includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of Merck’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to pipeline products that the products will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.
Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; Merck’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of Merck’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.
Merck undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in Merck’s 2012 Annual Report on Form 10-K and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).
1 Merck is providing certain 2013 and 2012 non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. Management believes that providing this information enhances investors’ understanding of the company’s performance. This information should be considered in addition to, but not in lieu of, information prepared in accordance with GAAP. For description of the items, see Table 2a, including the related footnotes, attached to this release.
2 Net income attributable to Merck & Co., Inc.
3 Represents the difference between calculated GAAP EPS and calculated non-GAAP EPS, which may be different than the amount calculated by dividing the impact of the excluded items by the weighted-average shares for the period.
4 Includes expenses for the amortization of intangible assets recognized as a result of mergers and acquisitions, as well as intangible asset impairment charges. Also includes integration and other costs associated with mergers and acquisitions.
5 Includes the estimated tax impact on the reconciling items. In addition, amount for 2013 includes a benefit of approximately $160 million associated with the resolution of a previously disclosed legacy Schering-Plough federal income tax issue.