Merck's net sales for the fourth quarter ended December 2014 declined by 7.4 per cent to $10,482 million from $11,319 million due to patent expiration, unfavorable foreign exchange rates and divestment of consumer care business. Its net earnings increased to $7,327 million from $815 million due to gain of 11.2 billion on the divestiture of its consumer care business and a loss on the extinguishment of debt of $628 million. EPS worked out to $2.54 as against $0.26 in the last period. Profit before extraordinary gains and taxation declined by 13.7 per cent during the quarter under review to $1,193 million from $1,382 million in the similar quarter of last year.
Pharmaceutical sales declined by 4 per cent to $9,370 million from $9,760 million due to lower sales of products like Vitorin, Remicade, Gardasil, Isentress and Nasonex. The sales of Januvia/Janumet improved by 2 per cent to $1,652 million from $1,624 million. Its R&D expenditure increased by 24 per cent to $2,283 million from $1,836 million.
Kenneth C Frazier, chairman and CEO, said, “Our stronger focus has led to better, consistent execution, and our results in 2014 demonstrate the significant progress we've made in evolving the company to better serve health care markets around the world. As we look forward to 2015 and beyond, we will continue to focus our resources on those internal and external opportunities that can generate the most value for patients, customers and shareholders.”
“While we are transforming the way Merck operates and executes, our fundamental strategy has remained consistent. Our success and our future will continue to be predicated on innovating at the intersection of scientific opportunity and global unmet medical need,” Frazier added.
For the full year ended December 2014, Merck's sales declined by 4.1 per cent to $42,237 million from $44,033 million due to patent expiration, unfavorable foreign exchange rates and divestment of consumer care business. Its pharmaceutical sales declined by 3.7 per cent to $36,042 million from $37,437 million as the sales of major products like Zetia/Vytorin Gardasil, Nasonex and Singulair declined. The sales of Zetia/Vytorin declined by 3.1 per cent to $4,166 million and that of Gardasil moved down by 5.1 per cent to $1,738 million. The sales of Januvia/Janumet improved to $6,002 million and that of Remicade went up by 4 per cent to $2,372 million.
Merck's R&D expenditure declined by 4.3 per cent during the year ended December 2014 to $7,180 million from $7,503 million in the previous year. It received US approval for six new products in 2014 that are launching in 2015, including novel medicines Keytruda (pembrolizumab) for the treatment of advanced melanoma in patients whose disease has progressed after other therapies and Belsomra for the treatment of insomnia. After acquisition of Cubist Pharmaceuticals, Inc., it acquired Zerbaxa to treat gram-negative bacteria, a key cause of in-hospital infections. It set to launch Zerbaxa in the US. It accelerated its hepatitis C virus clinical development programme in 2014.