Merck Announces First-Quarter 2015 Financial Results

  • First-Quarter 2015 Non-GAAP EPS of $0.85, Excluding Certain Items; GAAP EPS of $0.33
  • Company Narrows and Raises 2015 Full-Year Non-GAAP EPS Target to $3.35 to $3.48, Excluding Certain Items; Lowers 2015 Full-Year GAAP EPS Target to $1.58 to $1.85
  • First-Quarter 2015 Worldwide Sales Were $9.4 Billion, a Decrease of 8 Percent, Reflecting Net Unfavorable Impact of Acquisitions and Divestitures and a 5 Percent Negative Impact from Foreign Exchange
  • First-Quarter Results Reflect Sales Growth in Diabetes, Vaccines, Hospital Acute Care, Oncology and Animal Health and Sales Decline in Hepatitis C
  • Company Submitted sBLA for KEYTRUDA for Advanced Non-Small Cell Lung Cancer and Expects to Submit sBLA for First-Line Indication in Advanced Melanoma in Mid-2015
  • Multiple Data Sets Evaluating Chronic Hepatitis C Combination Regimen Grazoprevir/Elbasvir Were Presented at EASL; Company Reiterated Plans for NDA Submission in the First Half of 2015
Tuesday, April 28, 2015 7:00 am EDT

Dateline:

KENILWORTH, N.J.

Public Company Information:

NYSE:
MRK
"We remain focused on bringing forward the best scientific and medical innovations."

KENILWORTH, N.J.--(BUSINESS WIRE)--Merck (NYSE:MRK), known as MSD outside the United States and Canada, today announced financial results for the first quarter of 2015.

   
First Quarter
$ in millions, except EPS amounts   2015   2014
Sales   $9,425   $10,264
GAAP EPS   0.33   0.57

Non-GAAP EPS that excludes items listed below1

  0.85   0.88

GAAP Net Income2

  953   1,705

Non-GAAP Net Income that excludes items listed below1,2

 

2,426

 

2,601

 

Non-GAAP (generally accepted accounting principles) earnings per share (EPS) of $0.85 for the first quarter exclude acquisition- and divestiture-related costs and restructuring costs.

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

   
$ in millions, except EPS amounts First Quarter
2015   2014
EPS        
GAAP EPS   $0.33   $0.57

Difference3

 

0.52

 

0.31

Non-GAAP EPS that excludes items listed below1

 

$0.85

 

$0.88

 
Net Income        
GAAP net income2   $953   $1,705
Difference   1,473   896
Non-GAAP net income that excludes items listed below1,2   $2,426   $2,601
 
Decrease (Increase) in Net Income Due to Excluded Items:        
Acquisition- and divestiture-related costs4   $1,526   $1,137
Restructuring costs   225   326
Net decrease (increase) in income before taxes   1,751   1,463
Income tax (benefit) expense5   (278)   (567)
Decrease (increase) in net income   $1,473   $896
 

Commentary from Chairman and Chief Executive Officer Kenneth C. Frazier

“Our strong performance this quarter demonstrates that our scientific and business strategies, together with our focused investments, are paying off.”

“We remain focused on bringing forward the best scientific and medical innovations.”

“By capitalizing on the exciting scientific and clinical opportunities that lie ahead, Merck is poised to play a major role in transforming health care for patients, as well as payers and shareholders.”

Select Business Highlights

Worldwide sales were $9.4 billion for the first quarter of 2015, a decrease of 8 percent compared with the first quarter of 2014, including a 5 percent negative impact from foreign exchange and a 9 percent net unfavorable impact resulting from the divestiture of the Consumer Care business and select products, partially offset by the acquisition of Cubist Pharmaceuticals, Inc. (Cubist).

The following table reflects sales of the company’s top pharmaceutical products, as well as total sales of Animal Health and Consumer Care products.

           
$ in millions First Quarter   Change   Change

Ex-Exchange

    2015   2014    
Total Sales   $9,425   $10,264   -8%   -3%
Pharmaceutical   8,266   8,451   -2%   5%
JANUVIA / JANUMET   1,393   1,334   4%   10%
ZETIA / VYTORIN   887   972   -9%   -2%
REMICADE   501   604   -17%   -3%
ISENTRESS   385   390   -1%   6%
GARDASIL / GARDASIL 9   359   383   -6%   -5%
PROQUAD, M-M-R II and VARIVAX   348   280   24%   25%
NASONEX   289   312   -7%   0%
Animal Health   829   813   2%   13%
Consumer Care*   2   546   **   **
Other Revenues   328   454   -28%   -65%
*divested on Oct. 1, 2014

**≥100%

 

Commercial and Pipeline Highlights

The company focused on important launches in the first quarter of 2015, including KEYTRUDA (pembrolizumab) for the treatment of advanced melanoma in patients whose disease has progressed after other therapies, BELSOMRA (suvorexant) for the treatment of insomnia and ZERBAXA (ceftolozane/tazobactam), a combination product for the treatment of certain serious bacterial infections in adults. ZERBAXA was acquired through the acquisition of Cubist, which was completed in late January.

  • Merck continued to accelerate its KEYTRUDA clinical development program.
    • The company has submitted a supplemental Biologics License Application (sBLA) to the U.S. Food and Drug Administration (FDA) for KEYTRUDA for the treatment of patients with advanced non-small cell lung cancer (NSCLC) whose disease has progressed on or after platinum-containing chemotherapy and an FDA-approved therapy for EGFR or ALK genomic tumor aberrations, if present. Under PDUFA, the FDA has 60 days from submission of the sBLA to determine if the application will be accepted for review. Data used to form the basis for the sBLA submission, presented last week at the American Association for Cancer Research (AACR) Annual Meeting and simultaneously published in the New England Journal of Medicine, demonstrated robust response rates and durable clinical benefit in naïve and previously treated patients with NSCLC.
    • Additionally, the company expects to file a sBLA in mid-2015 for KEYTRUDA for the first-line treatment of advanced melanoma based on data from the Phase 3 KEYNOTE-006 study, presented last week at AACR and simultaneously published in the New England Journal of Medicine. These data demonstrated KEYTRUDA was statistically superior to ipilimumab, the current standard of care, for overall survival, progression-free survival and overall response rate in patients with advanced melanoma. In March, the company announced the study would be stopped early based on the recommendation of the study’s independent Data Monitoring Committee.
    • The company also recently submitted data from the KEYNOTE-002 study in ipilimumab-refractory melanoma as part of a supplemental application to the FDA.
    • Early findings with KEYTRUDA in patients with malignant pleural mesothelioma presented last week at AACR demonstrated encouraging overall response and disease control rates in the difficult-to-treat cancer of the lining of the lungs, abdomen and other organs.
    • Merck announced collaborations with Eli Lilly and Company, Eisai Co., Ltd., Syndax Pharmaceuticals, Inc. and TetraLogic Pharmaceuticals Corporation to evaluate KEYTRUDA in combination settings. Merck is advancing a broad and fast-growing clinical development program for KEYTRUDA with more than 85 clinical trials – across more than 30 tumor types and more than 14,000 patients – both as a monotherapy and in combination with other therapies.
    • In March, KEYTRUDA became the first treatment to be accepted under the U.K.’s new Early Access to Medicines Scheme for the treatment of advanced melanoma.
  • The company also advanced its clinical development program for the treatment of chronic hepatitis C virus (HCV) infection.
    • The first data presentations of the pivotal Phase 3 C-EDGE program evaluating grazoprevir/elbasvir, an investigational oral once-daily regimen for the treatment of chronic HCV infection, presented last week at The International Liver Congress 2015 – the 50th annual congress of the European Association for the Study of the Liver (EASL), showed high rates of sustained virologic response 12 weeks after completion of treatment (SVR12) across a broad range of patients with genotypes 1, 4 and 6 infection in a number of trials.
    • Additional Phase 2/3 data for grazoprevir/elbasvir presented last week at EASL showed a high rate of SVR12 in treatment-naïve and treatment-experienced patients with advanced chronic kidney disease infected with chronic HCV genotype 1.
    • The company reiterated its plans to submit a New Drug Application (NDA) to the FDA for grazoprevir/elbasvir in the first half of 2015.
    • The company received two Breakthrough Therapy Designations from the FDA for grazoprevir/elbasvir for the treatment of patients with chronic HCV genotype 4 infection, and for the treatment of chronic HCV genotype 1 infection in patients with end stage renal disease on hemodialysis.
  • At this week’s European Congress of Clinical Microbiology and Infectious Diseases, more than 30 abstracts are being presented on the company’s portfolio of marketed and investigational anti-infective medicines.
  • The company announced the Trial Evaluating Cardiovascular Outcomes with Sitagliptin (TECOS) of JANUVIA (sitagliptin), a medicine that helps lower blood sugar levels in adults with type 2 diabetes, achieved its primary endpoint of non-inferiority for the composite cardiovascular endpoint. Among secondary endpoints, there was no increase in hospitalization for heart failure in the sitagliptin group versus placebo.
  • The company received a Complete Response Letter (CRL) from the FDA for sugammadex injection, an investigational medicine for the reversal of neuromuscular blockade induced by rocuronium or vecuronium. Merck is evaluating the information provided in the CRL. Sugammadex injection is marketed as BRIDION in more than 60 countries.
  • The company submitted data from the IMPROVE-IT study to the FDA to support a new indication for reduction of cardiovascular events for ZETIA (ezetimibe) and VYTORIN (ezetimibe/simvastatin), medicines for lowering LDL cholesterol.

Pharmaceutical Revenue Performance

First-quarter pharmaceutical sales declined 2 percent to $8.3 billion, including a 7 percent negative impact from foreign exchange. Excluding the impact of exchange, growth was driven by the four core therapeutic areas – diabetes, vaccines, hospital acute care and oncology. The increase in hospital acute care was driven by strong sales growth of inline brands, as well as the addition of $208 million of Cubist product sales following Merck’s acquisition of Cubist in late January, including $182 million in sales of CUBICIN (daptomycin for injection), an I.V. antibiotic. Sales of CUBICIN in 2015 prior to Merck’s acquisition of Cubist were $74 million. Oncology growth was due to $83 million in sales from the continued launch of KEYTRUDA. Pharmaceutical sales also reflect the continued decline in the HCV portfolio of VICTRELIS (boceprevir) and PEGINTRON (peginterferon alfa-2b).

Animal Health Revenue Performance

Animal Health sales totaled $829 million for the first quarter of 2015, an increase of 2 percent compared with the first quarter of 2014, including an 11 percent negative impact from foreign exchange. Growth was primarily driven by an increase in sales of companion animal products mainly from the continued launch of BRAVECTO (fluralaner), a chewable tablet that kills fleas and ticks in dogs for up to 12 weeks.

Other Revenue Performance

Other revenues – primarily comprising alliance revenue, miscellaneous corporate revenues and third-party manufacturing sales – decreased 28 percent to $328 million compared to the first quarter of 2014. The decrease was driven primarily by $232 million in proceeds from the sale of marketing rights for SAPHRIS (asenapine) in the United States recognized in the first quarter of 2014, as well as the loss of revenue from AstraZeneca recorded by Merck, which was $147 million in the first quarter of 2014.

First-Quarter 2015 Expense and Other Information

The costs detailed below totaled $8.0 billion on a GAAP basis during the first quarter of 2015 and include $1.8 billion of acquisition- and divestiture-related costs and restructuring costs.

   
$ in millions   Included in expenses for the period

First Quarter

2015

 

 

GAAP

 

Acquisition-
and
Divestiture-
Related Costs4

 

Restructuring
Costs

 

 

Non-GAAP1

Materials and production   $3,569   $1,250   $105   $2,214
Marketing and administrative   2,601   227   36   2,338
Research and development   1,737   63   2   1,672
Restructuring costs   82   –-   82   –-
     
First Quarter

2014

               
Materials and production   $3,903   $1,126   $119   $2,658
Marketing and administrative   2,734   11   31   2,692
Research and development   1,574   –-   51   1,523
Restructuring costs   125   –-   125   –-
 

The gross margin was 62.1 percent for the first quarter of 2015 compared to 62.0 percent for the first quarter of 2014, reflecting 14.4 and 12.1 unfavorable percentage point impacts, respectively, from the acquisition- and divestiture-related costs and restructuring costs noted above. The increase in non-GAAP gross margin was driven by product mix, including the impact of acquisitions and divestitures, and foreign exchange.

Marketing and administrative expenses, on a non-GAAP basis, were $2.3 billion in the first quarter of 2015, a decrease from $2.7 billion in the same period of 2014, which was primarily driven by the sale of the Consumer Care business and declines in direct selling costs.

R&D expenses, on a non-GAAP basis, were $1.7 billion in the first quarter of 2015, a 10 percent increase compared to the first quarter of 2014, largely driven by an increase in licensing expenses.

Other (income) expense, net, was $55 million of expense in the first quarter of 2015 compared to $163 million of income in the first quarter of 2014. The first quarter of 2014 included a $182 million gain on the divestiture of the company’s Sirna Therapeutics, Inc. subsidiary.

The GAAP effective tax rate of 30.6 percent for the first quarter of 2015 reflects the impacts of acquisition- and divestiture-related costs and restructuring costs. The non-GAAP effective tax rate, which excludes these items, was 22.4 percent for the first quarter of 2015.

Financial Outlook

Merck has narrowed and raised its full-year 2015 non-GAAP EPS range to be between $3.35 and $3.48, including a $0.27 negative impact from foreign exchange. The range excludes acquisition- and divestiture-related costs and costs related to restructuring programs. The company has lowered its full-year 2015 GAAP EPS range to be between $1.58 and $1.85. The change in the GAAP EPS range primarily reflects the incorporation of updated estimated Cubist intangible amortization expense.

At current exchange rates, the company continues to anticipate full-year 2015 revenues to be between $38.3 billion and $39.8 billion, including a $2.8 billion negative impact from foreign exchange and approximately $1 billion of net lost sales from acquisitions and divestitures.

In addition, the company continues to expect full-year 2015 non-GAAP marketing and administrative expenses to be below 2014 levels and R&D expenses to be modestly above 2014 levels.

The company continues to anticipate its full-year 2015 non-GAAP tax rate will be in the range of 22 to 23 percent, not including a 2015 R&D tax credit.

A reconciliation of anticipated 2015 EPS, as reported in accordance with GAAP to non-GAAP EPS that excludes certain items, is provided in the table below.

   

$ in millions, except EPS amounts

  Full-Year

2015

GAAP EPS   $1.58 to $1.85
Difference3   1.77 to 1.63
Non-GAAP EPS that excludes items listed below   $3.35 to $3.48
 
 

Acquisition- and divestiture-related costs

 

$5,400 to $5,100

Restructuring costs

 

950 to 750

Net decrease (increase) in income before taxes

 

6,350 to 5,850

Estimated income tax (benefit) expense

 

(1,300) to (1,200)

Decrease (increase) in net income

 

$5,050 to $4,650

 

Total Employees

As of March 31, 2015, Merck had approximately 70,000 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 96680253. Members of the media are invited to monitor the call by dialing (706) 758-9928 or (800) 399-7917 and using ID code number 96680253. Journalists who wish to ask questions are requested to contact a member of Merck’s Media Relations team at the conclusion of the call.

About Merck

Today’s Merck is a global health care 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 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 health care through far-reaching policies, programs and partnerships. For more information, visit www.merck.com and connect with us on Twitter, Facebook and YouTube. You can also follow our Twitter conversation at $MRK.

Forward-Looking Statement

This news release includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. 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 2014 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 2015 and 2014 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 and purchase accounting adjustments to inventories recognized as a result of acquisitions, intangible asset impairment charges and expense or income related to changes in the fair value measurement of contingent consideration. Also includes integration, transaction and certain other costs related to business acquisitions and divestitures.

5 Includes the estimated tax impact on the reconciling items. In addition, amount for the first quarter of 2014 includes a benefit of approximately $300 million associated with a capital loss generated in the quarter.

 
MERCK & CO., INC.
CONSOLIDATED STATEMENT OF INCOME - GAAP
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)
(UNAUDITED)
Table 1
         
GAAP % Change
1Q15 1Q14  
     
Sales $ 9,425 $ 10,264 -8%
 
Costs, Expenses and Other
Materials and production (1) 3,569 3,903 -9%
Marketing and administrative (1) 2,601 2,734 -5%
Research and development (1) 1,737 1,574 10%
Restructuring costs (2) 82 125 -34%
Other (income) expense, net (1) (3) 55 (163 ) *
Income Before Taxes 1,381 2,091 -34%
Income Tax Provision 423 360
Net Income 958 1,731 -45%
Less: Net Income Attributable to Noncontrolling Interests 5 26
Net Income Attributable to Merck & Co., Inc. $ 953 $ 1,705 -44%
Earnings per Common Share Assuming Dilution $ 0.33   $ 0.57   -42%
   
Average Shares Outstanding Assuming Dilution 2,865 2,971
Tax Rate (4)   30.6 %   17.2 %
 
* 100% or greater

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

(2) Represents separation and other related costs associated with restructuring activities under the company's formal restructuring programs.

(3) Other (income) expense, net in the first quarter of 2014 includes a gain of $182 million on the divestiture of the company's Sirna Therapeutics, Inc. subsidiary. Other (income) expense, net includes equity income from affiliates. Prior period amounts have been reclassified to conform to the current presentation.

(4) The effective income tax rate for the first quarter of 2014 includes a benefit of approximately $300 million associated with a capital loss generated in the quarter.

 
MERCK & CO., INC.
CONSOLIDATED STATEMENT OF INCOME
GAAP TO NON-GAAP RECONCILIATION
FIRST QUARTER 2015
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)
(UNAUDITED)
Table 2a
                     
GAAP

Acquisition and
Divestiture-
Related Costs (1)

Restructuring
Costs (2)

Adjustment
Subtotal

Non-GAAP
           
     
Sales $ 9,425 $ 9,425
 
Costs, Expenses and Other
Materials and production 3,569 1,250 105 1,355 2,214
Marketing and administrative 2,601 227 36 263 2,338
Research and development 1,737 63 2 65 1,672
Restructuring costs 82 82 82 -
Other (income) expense, net (4) 55 (14 ) (14 ) 69
Income Before Taxes 1,381 (1,526 ) (225 ) (1,751 ) 3,132
Taxes on Income 423 (278

) (3)

 

 

701
Net Income 958 (1,473 ) 2,431
Less: Net Income Attributable to Noncontrolling Interests 5 5
Net Income Attributable to Merck & Co., Inc. $ 953 (1,473 ) $ 2,426
Earnings per Common Share Assuming Dilution $ 0.33   $ 0.85  
     
Average Shares Outstanding Assuming Dilution 2,865 2,865
Tax Rate   30.6%   22.4%  
 

Merck is providing non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. Management believes that providing this information enhances investors' understanding of the company's performance. This information should be considered in addition to, but not in lieu of, information prepared in accordance with GAAP.

(1) Amounts included in materials and production costs reflect $1.2 billion of expenses for the amortization of intangible assets recognized as a result of acquisitions, as well as $20 million of amortization of purchase accounting adjustments to inventories as a result of the Cubist acquisition. Amounts included in marketing and administrative expenses reflect integration, transaction and certain other costs related to business acquisitions, including severance costs which are not part of the company's formal restructuring programs, as well as transaction and certain other costs related to divestitures. Amounts included in research and development expenses reflect $61 million of charges to increase the fair value of liabilities for contingent consideration, as well as $2 million of in-process research and development (“IPR&D”) impairment charges.

(2) Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to activities under the company's formal restructuring programs.

(3) Represents the estimated tax impact on the reconciling items.

(4) Other (income) expense, net includes equity income from affiliates.

 
MERCK & CO., INC.
FRANCHISE / KEY PRODUCT SALES
(AMOUNTS IN MILLIONS)
Table 3
                       
2015 2014 % Change
1Q 1Q   2Q   3Q   4Q   Full Year 1Q
TOTAL SALES (1) $ 9,425 $ 10,264   $ 10,934   $ 10,557   $ 10,482   $ 42,237 -8
PHARMACEUTICAL 8,266 8,451   9,087   9,134   9,370   36,042 -2
Primary Care & Women's Health
Cardiovascular
Zetia 568 611 717 660 662 2,650 -7
Vytorin 320 361 417 369 370 1,516 -11
Diabetes
Januvia 884 858 1,058 933 1,082 3,931 3
Janumet 509 476 519 505 570 2,071 7
General Medicine & Women's Health
NuvaRing 166 168 178 186 191 723 -1
Implanon / Nexplanon 137 102 119 158 123 502 35
Dulera 130 102 103 124 132 460 28
Follistim AQ 82 110 102 97 102 412 -26
Hospital and Specialty Care
Hepatitis
PegIntron 56 112 103 84 81 381 -50
HIV
Isentress 385 390 453 412 418 1,673 -1
Hospital Acute Care
Cubicin(2) 187 5 6 7 7 25 *
Cancidas 163 166 156 183 175 681 -2
Invanz 132 114 134 141 139 529 15
Noxafil 111 74 98 107 122 402 50
Bridion 85 73 82 90 95 340 17
Primaxin 65 71 81 91 86 329 -8
Immunology
Remicade 501 604 607 604 557 2,372 -17
Simponi 158 157 174 170 188 689 1
Oncology
Emend 122 122 144 136 151 553 0
Keytruda 83 0 0 4 50 55 *
Temodar 74 83 93 88 86 350 -10
Diversified Brands
Respiratory
Nasonex 289 312 258 261 268 1,099 -7
Singulair 245 271 284 218 319 1,092 -9
Clarinex 51 62 69 49 52 232 -18
Other
Cozaar / Hyzaar 185 205 214 195 192 806 -10
Arcoxia 123 128 141 132 118 519 -4
Fosamax 94 123 121 114 112 470 -24
Propecia 53 74 58 66 67 264 -28
Zocor 49 64 69 61 64 258 -24
Vaccines
Gardasil / Gardasil 9 359 383 409 590 356 1,738 -6
ProQuad, M-M-R II and Varivax 348 280 326 421 366 1,394 24
RotaTeq 192 169 147 174 169 659 14
Zostavax 175 142 156 181 285 765 23
Pneumovax 23 110 101 102 197 346 746 9
Other Pharmaceutical (3) 1,075 1,378 1,389 1,326 1,269 5,356 -22
 
Animal Health 829 813 872 885 885 3,454 2
 
Consumer Care (4) 2 546 583 401 16 1,547 *
 
Other Revenues (5)   328   454     392     137     211     1,194 -28
 

* 100% or greater

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

(1) Only select products are shown.

(2) Cubicin results for the first quarter 2015 represent sales for the two months following Merck's acquisition of Cubist. Cubicin sales for 2014 represent the previous licensing agreement in Japan prior to the acquisition.

(3) Includes Pharmaceutical products not individually shown above. Other Vaccines sales included in Other Pharmaceutical were $78 million for the first quarter of 2015. Other Vaccines sales included in Other Pharmaceutical were $98 million, $76 million, $116 million and $88 million for the first, second, third and fourth quarters of 2014, respectively.

(4) On October 1, 2014, the company divested the Consumer Care business to Bayer.

(5) Other revenues are comprised primarily of alliance revenue, third-party manufacturing sales and miscellaneous corporate revenues, including revenue hedging activities. On June 30, 2014, AstraZeneca exercised its option to buy Merck's interest in a subsidiary and through it, Merck's interest in Nexium and Prilosec. As a result, the company no longer records supply sales for these products. Other revenues in the first quarter 2014 include $232 million of revenue recognized in connection with the sale of U.S. Saphris rights.

Related Materials:

Contact:

Merck
Media:
Lainie Keller, 908-236-5036
Steven Cragle, 908-740-1801
or
Investors:
Justin Holko, 908-740-1879
Joe Romanelli, 908-740-1986

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