Merck & Co has suffered a setback during the second quarter ended June 2010 due to adjustments in respect of merger of Schering-Plough and restructuring program. The net profit declined by 52 per cent to US$752 million from $1,556 million in the corresponding period of last year. Its sales, however, went up sharply by 92 per cent to $11,346 million from $5,900 million. During the second quarter of 2010, Merck's cost of materials & production went up sharply to $4,549 million from $1,354 million and marketing & administrative expenditure to $3,203 from $1,730 million. Further taxation provision went up to $461 million from 379 million.
For the first half ended June 2010, Merck's sales increased to $22,769 million from $11,285 million, representing a growth of 102 per cent. Its net earnings declined by 65 per cent to $1,051 million from $2,981 million in the similar period of last year.
"Our strong bottom-line performance in the second quarter demonstrates Merck's continued success in executing our post-merger strategy," said Richard T. Clark, chairman and chief executive officer. "We're now halfway through our first full year as a combined company. Already we're seeing positive signs of what can be achieved - despite patent expires and a challenging economy. I'm very pleased with what our team has accomplished.
"Key brands, including Januvia, Janumet, Remicade, Isentress, and Temodar were again standouts this quarter. In addition, animal health and Merck Consumer Care, produced strong global sales," he added. "With our strong performance for the first half of the year, we continue to have confidence in delivering on our long-term financial targets."
In June, Merck's newest asthma medication, Dulera (mometasone furoate and formoterol fumarate dehydrate) Inhalation Aerosol, a new fixed-dose combination, was approved by the US Food and Drug Administration (FDA) for patients 12 years of age and older.
Also, in June, the Committee for Medicinal Products for Human Use (CHMP) recommended marketing approval for Brinavess (vernakalant) in the European Union (EU) for the conversion of recent onset atrial fibrillation to sinus rhythm and issued a positive opinion to extend the indication for Gardasil to include women up to the age of 45 years. The group also recommended the marketing of Sycrest (asenapine) for the treatment of moderate to severe manic episodes associated with bipolar I disorder in adults, but did not recommend marketing for the treatment of schizophrenia.
The company has been moving rapidly to complete integration actions and achieve its synergy target of $3.5 billion of annual savings in 2012. The recently restructured research network will be comprised of 16 major R&D facilities worldwide, and planned actions announced since the merger will reduce Merck's manufacturing network from 91 to 77 facilities, including 29 Animal Health locations. The company will continue to pursue productivity efficiencies and evaluate its manufacturing supply chain capabilities on an ongoing basis.
Merck broke ground on a new manufacturing site in Hangzhou, China on July 12 as part of its expansion plans for China. The 37,000 square meter site is expected to start production in 2012. It will package solid dosage pharmaceuticals and sterile products for the Chinese market and manufacture clinical/commercial supplies to support future new product introductions.