Merck has received major setback during the second quarter ended June 2015 due to acquisitions, divestitures and foreign exchange. Its net profit declined sharply by 66 per cent to $687 million from $2,004 million in the corresponding period of last year. Its sales also declined by 11 per cent to $9,785 million from $10,934 million on account of lower sales in cardiovascular and hepatitis C portfolios. With lower profit, its EPS declined to $0.24 from $0.68 in the last period. R&D expenditure increased slightly to $1,670 million from $1,664 million.
Kenneth C Frazier, chairman and chief executive officer, said, “We're investing resources to grow our strongest brands and to support the most promising assets in our pipeline, while at the same time lowering our cost base and delivering operation leverage. We have made significant progress this quarter in two of our most important assets, the Keytruda and hepatitis C programmes, and will be fully prepared to take advantage of these potentially breakthrough opportunities. We are witnessing the introduction of breakthrough therapies for some of the most difficult-to-treat diseases.”
Its pharmaceutical sales declined by 6 per cent to $8,564 million from $9,098 million and that of animal health by 4 per cent to $840 million from $872 million. The company divested its consumer care business. The sales of cardiovascular portfolio of Zetia and Vytorin in US declined due to loss of exclusivity and that of Remicade, a treatment for inflammatory diseases, due to loss of exclusivity in Europe. Zetia sales declined $635 million from $717 million and that of Vytorin went down to $320 million from $417 million. Remicade sales declined to $455 million from $607 million.
For the first half ended June 2015, Merck's sales declined by 9 per cent to $19,210 million from $21,198 million in the similar period of last year and its net profit moved down by 56 per cent to $1,646 million from $3,764 million. R&D expenditure increased by 5 per cent to $3,407 million from $3,238 million. Sales of major products like Zetia declined by 9 per cent to $1,202 million, Vitorin by 18 per cent to $640 million and Isentress by 10 per cent to $760 million. However, sales of Januvia improved by one per cent to $1,928 million and that Janumet by 7 per cent to $1,063 million from $995 million.