Merck & Co, known as MSD outside the US and Canada, has posted strong performance during second quarter ended June 2011 on account of double-digit growth from key products and successful new product launches in markets worldwide. The company's net profit went up to US$ 2,054 million from $ 780 million in the corresponding period of last year. Its sales increased by 7 per cent to $ 12,151 million from $ 11,346 million.
The company cut down its R&D expenditure by 11 per cent to $ 1,936 million from $ 2,179 million and its material and production cost reduced by 6 per cent to$ 4,284 million from $ 4,549 million in the similar quarter of last year. The company said it will more aggressively reduce its cost structure so It can continue to invest in long term profitable growth opportunities.
The company announced the next phase of its Merger Restructuring Programme. As part of this next phase, it expects to reduce its workforce, as measured at December 31, 2009 by an additional 12 to 13 per cent by the end of 2015. However, it will continue to hire new employees in strategic growth areas of the business such as emerging markets. By the end of 2015, Merck now expects the overall Merger Restructuring program to yield annual ongoing savings of 4 billion to $ 4.6 billion from the original estimate of $ 2.7 billion to $ 3.1 billion.
Kenneth C Frazier president and CEO, said “Merck is taking these difficult actions so that we can grow profitably and continue to deliver on our mission well into the future.”
The company's revenues increase largely reflects strong sales of Januvia, Janumet, Remicade, Singulair, Isentress, Gardasil and Zostavax. Pharmaceutical sales from emerging markets accounted for 18 per cent of sales in the quarter. The US launch of Victrelis is underway. Separately, the company entered into strategic agreements with Roche to market Victrelis globally to physicians as part of a triple combination therapy regimen. Japanese Ministry of Health approved Gardasil, Zolinza and Cubicin.
For the first half ended June 2011, Merck's sales increased by 4 per cent to $ 23.7 billion from 22.7 billion in the similar period of last year. Its net profit touched to $ 3.1 billion as against $ 1.1 billion in the last period.