Merck & Co's financial performance has remained under pressure during the third quarter ended September 2012 and its sales declined by 4 per cent to $11,488 million from $12,022 million. Its net profit improved only by 2.2 per cent to $1,729 million from $1,692 million.
Third-quarter pharmaceutical sales declined 5 per cent to $9.9 billion, including a 5 per cent negative impact due to foreign exchange. Strong sales growth for Gardasil, Januvia, Victrelis, Zostavax, Isentress and Janumet offset the expected declines in sales of Singulair, Cozaar and Hyzaar.
Sales from emerging markets accounted for approximately 20 per cent of pharmaceutical sales in the third quarter. Sales growth in the emerging markets is being driven by primary care and women’s health, vaccines, hospital and specialty, and diversified brands. China continues to be a key driver with 19 per cent growth for the third quarter, including a 1 percent benefit from foreign exchange.
Worldwide sales of the combined diabetes franchise of Januvia/Janumet, medicines that help lower blood sugar levels in adults with type 2 diabetes, grew 15 per cent to $1.4 billion in the third quarter of 2012 primarily driven by growth in the United States and Japan.
Sales of Zetia and Vytorin, medicines for lowering LDL cholesterol, declined 1 per cent to $1.1 billion in the third quarter driven by lower sales of Vytorin, partially offset by growth of Zetia in the United States.
Worldwide sales of Singulair, a once-a-day oral medicine for the chronic treatment of asthma and the relief of symptoms of allergic rhinitis, declined $734 million, or 55 per cent, to $602 million in the third quarter of 2012. The patent for Singulair expired in the United States on August 3, 2012 and will expire in major European markets in February 2013. The company is experiencing a significant and rapid reduction in sales in the United States and expects a similar decline in Europe following patent expiry there. Singulair will retain marketing exclusivity in Japan until 2016.
Research and development (R&D) expenses, on a non-GAAP basis, were $1.9 billion in the third quarter of 2012, which is in line with the third quarter of 2011.
Kenneth C. Frazier, chairman and chief executive officer of Merck, said, "Our strong global sales this quarter offset the impact of the Singulair patent expiry in the US. We will continue to drive value for our customers and shareholders through Merck’s four-part strategy of executing on our core business, expanding geographically in high-growth markets, extending our complementary businesses and excelling at managing our costs while investing for growth. With our robust pipeline, we remain on target to submit multiple new products for marketing approval between now and the end of 2013, including suvorexant for insomnia, odanacatib for osteoporosis and tredaptive for multiple lipid parameters."
For the nine months period ended September 2012, Merck's sales remained almost stagnant at $35,530 million as compared to $35,753 million. However, its net profit improved by 12 per cent to $5,261 million from $4,760 million in the similar period of last year.