RAHWAY, N.J.--(BUSINESS WIRE)--Oct 27, 2022--
Merck (NYSE: MRK), known as MSD outside the United States and Canada, today announced financial results for the third quarter of 2022.
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“We continue to execute on our strategy, invest in leading-edge science and drive innovation as our colleagues deliver meaningful value for patients – which in turn provides value for our shareholders,” said Robert M. Davis, chief executive officer and president, Merck. “Our third quarter results demonstrate exceptional revenue and underlying earnings growth and sustained performance across our key growth drivers. Inspired by our purpose of saving and improving lives around the world, I am confident we are well-positioned to continue to deliver strong operational performance.”
Financial Summary
$ in millions, except EPS amounts | Third Quarter | |||
2022 | 2021 | Change | Change | |
Sales | $14,959 | $13,154 | 14% | 18% |
GAAP net income 1 | 3,248 | 4,567 | -29% | -25% |
Non-GAAP net income that excludes certain items 1,2* | 4,703 | 4,525 | 4% | 7% |
GAAP EPS | 1.28 | 1.80 | -29% | -25% |
Non-GAAP EPS that excludes certain items 2* | 1.85 | 1.78 | 4% | 7% |
*Refer to table on page 11. |
Generally accepted accounting principles (GAAP) earnings per share (EPS) assuming dilution was $1.28 for the third quarter of 2022. Non-GAAP EPS of $1.85 for the third quarter of 2022 excludes acquisition- and divestiture-related costs and restructuring costs, as well as income and losses from investments in equity securities. In 2022, the company changed the treatment of certain items for purposes of its non-GAAP reporting. Results for 2021 have been recast to conform to the new presentation. For more information, refer to the Form 8-K filed by the company on April 21, 2022.
Year-to-date results can be found in the attached tables.
Cardiovascular pipeline highlights
Oncology program highlights
Vaccines program highlights
Infectious diseases pipeline highlights
Business development highlights
Environmental, Social and Governance (ESG) highlights
Third-quarter revenue performance
The following table reflects sales of the company’s top pharmaceutical products, as well as sales of Animal Health products.
| Third Quarter | |||
$ in millions | 2022 | 2021 | Change | Change |
Total Sales | $14,959 | $13,154 | 14% | 18% |
Pharmaceutical | 12,963 | 11,496 | 13% | 19% |
KEYTRUDA | 5,426 | 4,534 | 20% | 26% |
GARDASIL / GARDASIL 9 | 2,294 | 1,993 | 15% | 20% |
JANUVIA / JANUMET | 1,133 | 1,339 | -15% | -9% |
PROQUAD, M-M-R II and VARIVAX | 668 | 661 | 1% | 3% |
LAGEVRIO | 436 | 0 | - | - |
BRIDION Lynparza* | 423 284 | 369 246 | 15% 16% | 22% 23% |
ROTATEQ | 256 | 227 | 12% | 16% |
Lenvima* | 202 | 188 | 7% | 11% |
SIMPONI | 173 | 203 | -15% | -2% |
Animal Health | 1,371 | 1,417 | -3% | 4% |
Livestock | 829 | 864 | -4% | 4% |
Companion Animals | 542 | 553 | -2% | 4% |
Other Revenues** | 625 | 241 | *** | 41% |
*Alliance revenue for this product represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs. | ||||
**Other revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities. | ||||
***>100% |
Pharmaceutical revenue
Third-quarter pharmaceutical sales increased 13% to $13.0 billion. Pharmaceutical sales growth in the third quarter was 9% excluding LAGEVRIO sales and 15% excluding LAGEVRIO sales and the impact of foreign exchange, primarily driven by oncology, vaccines and hospital acute care products. The COVID-19 pandemic unfavorably affected sales in the third quarter of 2021 by approximately $350 million, which favorably impacted the growth rate in the third quarter of 2022.
Growth in oncology was largely driven by higher sales of KEYTRUDA, which rose 20% to $5.4 billion in the quarter. Global sales growth of KEYTRUDA reflects continued strong momentum from metastatic indications including certain types of NSCLC, renal cell carcinoma, head and neck squamous cell carcinoma, triple-negative breast cancer (TNBC) and MSI-H cancers, and increased uptake across recent earlier-stage launches including certain types of neoadjuvant/adjuvant TNBC in the U.S.
Growth in vaccines was primarily driven by higher combined sales of GARDASIL (Human Papillomavirus Quadrivalent [Types 6, 11, 16 and 18] Vaccine, Recombinant) and GARDASIL 9 vaccines to prevent certain cancers and other diseases caused by HPV. Third-quarter GARDASIL/GARDASIL 9 sales grew 15% to $2.3 billion, primarily driven by strong demand outside of the U.S., particularly in China, which also benefited from increased supply. Additionally, higher sales in the U.S. reflect public sector buying patterns. Growth in vaccines was partially offset by lower sales of PNEUMOVAX 23 (pneumococcal vaccine polyvalent), a vaccine to help prevent pneumococcal disease, which declined 53% to $131 million primarily reflecting lower U.S. demand as the market continues to shift toward newer adult pneumococcal conjugate vaccines.
Growth in hospital acute care reflects higher demand globally for BRIDION (sugammadex) injection 100 mg/mL, a medicine for the reversal of neuromuscular blockade induced by rocuronium bromide or vecuronium bromide in adults and pediatric patients ages 2 years and older undergoing surgery. Sales increased 15% to $423 million, primarily due to an increase in its share among neuromuscular blockade reversal agents and an increase in surgical procedures. Growth in hospital acute care also reflects higher sales of ZERBAXA (ceftolozane and tazobactam), a combination cephalosporin antibacterial and beta-lactamase inhibitor for the treatment of adults with certain bacterial infections. Sales of $43 million resulted from the phased resupply initiated in the fourth quarter of 2021, which has been completed in 2022.
Pharmaceutical sales growth was partially offset by lower combined sales of JANUVIA (sitagliptin) and JANUMET (sitagliptin and metformin HCI), which declined 15% to $1.1 billion, primarily reflecting lower demand and pricing in certain international markets as a result of generic competition, particularly in Europe, and lower demand in the U.S. The company lost market exclusivity for JANUVIA and JANUMET in China in July and in the EU in September, although JANUMET currently continues to have exclusivity in certain European markets.
Animal Health revenue
Animal Health sales totaled $1.4 billion for the third quarter of 2022, a decline of 3% compared with the third quarter of 2021. Excluding the unfavorable effect from foreign exchange, Animal Health sales grew 4% primarily reflecting higher pricing. Sales of livestock products also reflect higher demand for poultry products. Sales of companion animal products also reflect higher demand for the BRAVECTO (fluralaner) parasiticide line of products, partially offset by supply constraints for certain vaccines.
Third-quarter expense information
The tables below present selected expense information.
$ in millions Third Quarter 2022 | GAAP | Acquisition- | Restructuring | (Income) | Non- |
Cost of sales | $3,934 | $446 | $54 | $- | $3,434 |
Selling, general and administrative | 2,520 | 22 | 26 | - | 2,472 |
Research and development | 4,399 | 902 | 1 | - | 3,496 |
Restructuring costs | 94 | - | 94 | - | - |
Other (income) expense, net | 429 | (26) | - | 350 | 105 |
Third Quarter 2021 |
|
|
|
|
|
Cost of sales | $3,450 | $346 | $48 | $- | $3,056 |
Selling, general and administrative | 2,336 | 61 | 5 | - | 2,270 |
Research and development | 2,445 | 48 | 8 | - | 2,389 |
Restructuring costs | 107 | - | 107 | - | - |
Other (income) expense, net | (450) | (10) | - | (684) | 244 |
GAAP expense, EPS and related information
Gross margin was 73.7% for the third quarter of 2022 compared to 73.8% for the third quarter of 2021. The decrease primarily reflects the impacts of higher revenue from third-party manufacturing arrangements and sales of LAGEVRIO, both of which have lower gross margins, as well as higher acquisition- and divestiture-related costs. The gross margin decline was largely offset by the favorable effects of product mix and foreign exchange.
Selling, general and administrative (SG&A) expenses were $2.5 billion in the third quarter of 2022, an increase of 8% compared to the third quarter of 2021. The increase primarily reflects higher administrative costs, including compensation and benefit costs, as well as higher promotional spending, partially offset by the favorable impact of foreign exchange.
Research and development (R&D) expenses were $4.4 billion in the third quarter of 2022 compared to $2.4 billion in the third quarter of 2021. The increase primarily reflects $887 million of intangible asset impairment charges related to the ArQule, Inc. acquisition, charges related to collaboration and licensing agreements with Moderna, Orna and Orion and higher clinical development spending.
Other (income) expense, net, was $429 million of expense in the third quarter of 2022 compared to $450 million of income in the third quarter of 2021, primarily due to net unrealized losses from investments in equity securities in the third quarter of 2022, compared to net unrealized income from investments in equity securities in the third quarter of 2021. Other (income) expense, net, in the third quarter of 2022 also reflects lower pension costs compared to the third quarter of 2021.
The effective income tax rate was 9.2% for the third quarter of 2022 compared to 13.2% in the third quarter of 2021.
GAAP EPS was $1.28 for the third quarter of 2022 compared to $1.80 for the third quarter of 2021.
Non-GAAP expense, EPS and related information
Non-GAAP gross margin was 77.0% for the third quarter of 2022 compared to 76.8% for the third quarter of 2021. The increase in non-GAAP gross margin primarily reflects the favorable effects of product mix and foreign exchange, largely offset by the impacts of higher revenue from third-party manufacturing arrangements and sales of LAGEVRIO, both of which have lower gross margins.
Non-GAAP SG&A expenses were $2.5 billion in the third quarter of 2022, an increase of 9% compared to the third quarter of 2021. The increase primarily reflects higher administrative costs, including compensation and benefit costs, as well as higher promotional spending, partially offset by the favorable impact of foreign exchange.
Non-GAAP R&D expenses were $3.5 billion in the third quarter of 2022 compared to $2.4 billion in the third quarter of 2021. The increase primarily reflects charges related to collaboration and licensing agreements with Moderna, Orna and Orion and higher clinical development spending.
Non-GAAP other (income) expense, net, was $105 million of expense in the third quarter of 2022 compared to $244 million of expense in the third quarter of 2021, reflecting lower pension costs.
The non-GAAP effective income tax rate was 13.6% for the third quarter of 2022 compared to 12.8% in the third quarter of 2021.
Non-GAAP EPS was $1.85 for the third quarter of 2022 compared to $1.78 for the third quarter of 2021.
A reconciliation of GAAP to non-GAAP net income and EPS is provided in the table that follows.
| Third Quarter | |
$ in millions, except EPS amounts | 2022 | 2021 |
EPS |
|
|
GAAP EPS | $1.28 | $1.80 |
Difference | 0.57 | (0.02) |
Non-GAAP EPS that excludes items listed below 2 | $1.85 | $1.78 |
|
|
|
Net Income |
|
|
GAAP net income 1 | $3,248 | $4,567 |
Difference | 1,455 | (42) |
Non-GAAP net income that excludes items listed below 1,2 | $4,703 | $4,525 |
|
|
|
Decrease (Increase) in Net Income Due to Excluded Items: |
|
|
Acquisition- and divestiture-related costs 3 | $1,344 | $445 |
Restructuring costs | 175 | 168 |
Loss (income) from investments in equity securities | 350 | (684) |
Net decrease (increase) in income before taxes | 1,869 | (71) |
Estimated income tax (benefit) expense | (414) | 29 |
Decrease (increase) in net income | $1,455 | $(42) |
Financial outlook
Beginning in 2022, Merck no longer excludes expenses for upfront and milestone payments related to collaboration and licensing agreements, or charges related to pre-approval assets obtained in transactions accounted for as asset acquisitions from its non-GAAP results. Historically, the company excluded these charges to the extent they were considered by the company to be significant to the results of a particular period. These changes were made to align with views expressed by the U.S. Securities and Exchange Commission. Prior periods have been recast to reflect this change. For 2021, non-GAAP results have been recast to include $1.7 billion of incremental R&D expense, resulting in revised full-year 2021 EPS of $5.37.
Full-year 2022 GAAP and non-GAAP results include $690 million of incremental R&D expense, recorded in the third quarter of 2022, for collaboration and licensing agreements with Moderna, Orna and Orion which negatively impacts expected full-year EPS by $0.22.
As an on-going practice, the financial outlook will not include significant potential business development transactions.
Merck continues to experience strong global momentum across its key pillars of growth, particularly in oncology and vaccines. As a result, Merck is raising and narrowing its full-year outlook for sales and non-GAAP EPS, despite a negative impact from foreign exchange.
At mid-October 2022 exchange rates, Merck expects sales growth of 20% to 21% in 2022, with full-year sales estimated to be between $58.5 billion and $59.0 billion, including a negative impact from foreign exchange of approximately 4%, including a less than 1% incremental negative impact from prior sales outlook. Excluding LAGEVRIO, Merck expects sales growth of approximately 12% for full-year 2022.
Merck expects its full-year non-GAAP effective income tax rate to be approximately 14%.
Merck is lowering its expected full-year 2022 GAAP EPS to be between $5.68 and $5.73.
Merck is raising and narrowing its expected full-year 2022 non-GAAP EPS to be between $7.32 and $7.37, including a negative impact from foreign exchange of approximately 4% at mid-October exchange rates. Operational strength of approximately $0.20 is partially offset by the following negative impacts, which were not reflected previously in the outlook:
The non-GAAP range excludes acquisition- and divestiture-related costs and costs related to restructuring programs as well as income and losses from investments in equity securities.
The company is narrowing its expected full year sales range of LAGEVRIO to be between $5.2 billion and $5.4 billion. Merck shares profits equally with its partner, Ridgeback, which is reflected in cost of sales.
The following table summarizes the company’s full-year 2022 financial outlook.
GAAP | Non-GAAP 2 | ||
Sales | $58.5 to $59.0 billion | $58.5 to $59.0. billion* | |
Operating expenses | $22.5 to $22.9 billion | $21.3 to $21.7 billion | |
Effective tax rate | Approximately 11% | Approximately 14% | |
EPS** | $5.68 to $5.73 | $7.32 to $7.37 | |
*The company does not have any non-GAAP adjustments to sales. **EPS outlook for 2022 assumes a share count (assuming dilution) of approximately 2.54 billion shares. |
|
A reconciliation of anticipated full-year 2022 GAAP EPS to non-GAAP EPS and the items excluded from non-GAAP EPS are provided in the table below.
$ in millions, except EPS amounts | Full-Year 2022 |
GAAP EPS | $5.68 to $5.73 |
Difference | $1.64 |
Non-GAAP EPS that excludes items listed below 2 | $7.32 to $7.37 |
|
|
Acquisition- and divestiture-related costs Restructuring costs (Income) loss from investments in equity securities | $3,400 600 1,350 |
Net decrease (increase) in income before taxes | 5,350 |
Estimated income tax (benefit) expense | (1,175) |
Decrease (increase) in net income | $4,175 |
Earnings conference call
Investors, journalists and the general public may access a live audio webcast of the call Thursday, Oct. 27, at 8:00 a.m. ET via this weblink. A replay of the webcast, along with the sales and earnings news release, supplemental financial disclosures and slides highlighting the results, will be available at www.merck.com.
Participants may join the call by dialing (877) 692-8955 (USA Toll-Free) or (243) 720-6979 (USA Caller Paid). If you are calling from other countries, visit this weblink. All dial-in participants can use the access code 9646315. Journalists who wish to ask questions are requested to contact a member of Merck’s Media Relations team.
About Merck
At Merck, known as MSD outside of the United States and Canada, we are unified around our purpose: We use the power of leading-edge science to save and improve lives around the world. For more than 130 years, we have brought hope to humanity through the development of important medicines and vaccines. We aspire to be the premier research-intensive biopharmaceutical company in the world – and today, we are at the forefront of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. We foster a diverse and inclusive global workforce and operate responsibly every day to enable a safe, sustainable and healthy future for all people and communities. For more information, visit www.merck.com and connect with us on Twitter, Facebook, Instagram, YouTube and LinkedIn.
Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J., USA
This news release of Merck & Co., Inc., Rahway, N.J., USA (the “company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to pipeline candidates that the candidates will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.
Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of the global outbreak of novel coronavirus disease (COVID-19); the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.
The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2021 and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site ( www.sec.gov ).
1 Net income from continuing operations attributable to Merck & Co., Inc. |
2 Merck is providing certain 2022 and 2021 non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. Management believes that providing this information enhances investors’ understanding of the company’s results because management uses non-GAAP results to assess performance. Management uses non-GAAP measures internally for planning and forecasting purposes and to measure the performance of the company along with other metrics. In addition, senior management’s annual compensation is derived in part using a non-GAAP pre-tax income metric. This information should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. For a description of the non-GAAP adjustments, see Table 2a attached to this release. Non-GAAP results for 2021 have been recast to conform to presentation changes implemented in 2022. |
3 Includes expenses for the amortization of intangible assets and purchase accounting adjustments to inventories recognized as a result of acquisitions, intangible asset impairment charges and expense or income related to changes in the estimated fair value measurement of liabilities for contingent consideration. Also includes integration, transaction and certain other costs related to acquisitions and divestitures. |
MERCK & CO., INC.
CONSOLIDATED STATEMENT OF INCOME - GAAP
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)
(UNAUDITED)
Table 1
On June 2, 2021, Merck completed the spin-off of products from its women’s health, biosimilars and established brands businesses into a new, independent, publicly traded company named Organon & Co. (Organon). The historical results of the businesses that were contributed to Organon in the spin-off are excluded from sales and expenses and reflected as discontinued operations in the company’s Consolidated Statement of Income provided below.
| GAAP | % Change | GAAP | % Change | |||||||
3Q22 | 3Q21 | Sep YTD 2022 | Sep YTD 2021 | |||||||
| Sales | $ 14,959 | $ 13,154 | 14% | $ 45,453 | $ 35,183 | 29% | ||||
|
| |||||||||
| Costs, Expenses and Other |
|
| ||||||||
| Cost of sales | 3,934 | 3,450 | 14% | 13,530 | 9,752 | 39% | ||||
| Selling, general and administrative | 2,520 | 2,336 | 8% | 7,355 | 6,804 | 8% | ||||
| Research and development | 4,399 | 2,445 | 80% | 9,773 | 9,177 | 6% | ||||
| Restructuring costs | 94 | 107 | -12% | 288 | 487 | -41% | ||||
| Other (income) expense, net | 429 | (450) | * | 1,576 | (1,007) | * | ||||
| Income from Continuing Operations Before Taxes | 3,583 | 5,266 | -32% | 12,931 | 9,970 | 30% | ||||
| Income Tax Provision | 330 | 695 |
| 1,423 | 1,436 |
| ||||
| Net Income from Continuing Operations | 3,253 | 4,571 | -29% | 11,508 | 8,534 | 35% | ||||
| Less: Net Income Attributable to Noncontrolling Interests | 5 | 4 |
| 6 | 9 |
| ||||
| Net Income from Continuing Operations Attributable to Merck & Co., Inc. | 3,248 | 4,567 | -29% | 11,502 | 8,525 | 35% | ||||
| Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests | - | - | 0% | - | 766 | * | ||||
| Net Income Attributable to Merck & Co., Inc. | $ 3,248 | $ 4,567 | -29% | $ 11,502 | $ 9,291 | 24% | ||||
|
| |||||||||
| Basic Earnings per Common Share Attributable to Merck & Co., Inc. Common Shareholders: |
|
| ||||||||
| Income from Continuing Operations | $ 1.28 | $ 1.81 | -29% | $ 4.55 | $ 3.37 | 35% | ||||
| Income from Discontinued Operations | - | - | 0% | - | 0.30 | * | ||||
| Net Income | $ 1.28 | $ 1.81 | -29% | $ 4.55 | $ 3.67 | 24% | ||||
|
| |||||||||
| Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders: |
|
| ||||||||
| Income from Continuing Operations | $ 1.28 | $ 1.80 | -29% | $ 4.53 | $ 3.36 | 35% | ||||
| Income from Discontinued Operations | - | - | 0% | - | 0.30 | * | ||||
| Net Income | $ 1.28 | $ 1.80 | -29% | $ 4.53 | $ 3.66 | 24% | ||||
| Average Shares Outstanding | 2,533 | 2,530 | 2,531 | 2,531 | ||||||
| Average Shares Outstanding Assuming Dilution | 2,542 | 2,536 | 2,540 | 2,539 | ||||||
| Tax Rate from Continuing Operations | 9.2% | 13.2% | 11.0% | 14.4% | ||||||
| * 100% or greater |
| MERCK & CO., INC. | ||||||||||||
| THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2022 GAAP TO NON-GAAP RECONCILIATION - CONTINUING OPERATIONS | ||||||||||||
| (AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES) | ||||||||||||
| (UNAUDITED) | ||||||||||||
| Table 2a | ||||||||||||
| GAAP | Acquisition and Divestiture- Related Costs (1) | Restructuring Costs (2) | (Income) Loss from Investments in Equity Securities | Adjustment Subtotal | Non -GAAP | |||||||
| Third Quarter | ||||||||||||
| Cost of sales | $ 3,934 | 446 | 54 | 500 | $ 3,434 | |||||||
| Selling, general and administrative | 2,520 | 22 | 26 | 48 | 2,472 | |||||||
| Research and development | 4,399 | 902 | 1 | 903 | 3,496 | |||||||
| Restructuring costs | 94 | 94 | 94 | - | ||||||||
| Other (income) expense, net | 429 | (26) | 350 | 324 | 105 | |||||||
| Income from Continuing Operations Before Taxes | 3,583 | (1,344) | (175) | (350) | (1,869) | 5,452 | ||||||
| Income Tax Provision (Benefit) | 330 | (302) | (3) | (35) | (3) | (77) | (3) | (414) | 744 | |||
| Net Income from Continuing Operations | 3,253 | (1,042) | (140) | (273) | (1,455) | 4,708 | ||||||
| Net Income from Continuing Operations Attributable to Merck & Co., Inc. | 3,248 | (1,042) | (140) | (273) | (1,455) | 4,703 | ||||||
| Earnings per Common Share Assuming Dilution from Continuing Operations | $ 1.28 | (0.40) | (0.06) | (0.11) | (0.57) | $ 1.85 | ||||||
| Tax Rate | 9.2% | 13.6% | ||||||||||
| Sep YTD | ||||||||||||
| Cost of sales | $ 13,530 | 1,577 | 167 | 1,744 | $ 11,786 | |||||||
| Selling, general and administrative | 7,355 | 137 | 74 | 211 | 7,144 | |||||||
| Research and development | 9,773 | 936 | 30 | 966 | 8,807 | |||||||
| Restructuring costs | 288 | 288 | 288 | - | ||||||||
| Other (income) expense, net | 1,576 | (138) | 1,268 | 1,130 | 446 | |||||||
| Income from Continuing Operations Before Taxes | 12,931 | (2,512) | (559) | (1,268) | (4,339) | 17,270 | ||||||
| Income Tax Provision (Benefit) | 1,423 | (587) | (3) | (97) | (3) | (281) | (3) | (965) | 2,388 | |||
| Net Income from Continuing Operations | 11,508 | (1,925) | (462) | (987) | (3,374) | 14,882 | ||||||
| Net Income from Continuing Operations Attributable to Merck & Co., Inc. | 11,502 | - | (1,925) | (462) | (987) | (3,374) | 14,876 | |||||
| Earnings per Common Share Assuming Dilution from Continuing Operations | $ 4.53 | (0.76) | (0.18) | (0.39) | (1.33) | $ 5.86 | ||||||
| Tax Rate | 11.0% | 13.8% |
| Only the line items that are affected by non-GAAP adjustments are shown. |
| Merck is providing certain non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. Management believes that providing non-GAAP information enhances investors’ understanding of the company’s results because management uses non-GAAP measures to assess performance. Management uses non-GAAP measures internally for planning and forecasting purposes and to measure the performance of the company along with other metrics. In addition, senior management’s annual compensation is derived in part using a non-GAAP pretax income metric. The non-GAAP information presented should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. |
| (1) Amounts included in cost of sales primarily reflect expenses for the amortization of intangible assets. Amounts included in selling, general and administrative expenses reflect integration, transaction and certain other costs related to acquisitions and divestitures. Amounts included in research and development expenses for the third quarter and nine month period primarily reflect $887 million of intangible asset impairment charges related to the ArQule, Inc. acquisition and expenses for the amortization of intangible assets. Amounts included in other (income) expense, net, for the third quarter and nine month period primarily reflect royalty income and a decrease in the estimated fair value measurement of liabilities for contingent consideration related to the prior termination of the Sanofi-Pasteur MSD joint venture. |
| (2) Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to activities under the company's formal restructuring programs. |
| (3) Represents the estimated tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments. |
| MERCK & CO., INC. | |||||||||||||||||
| FRANCHISE / KEY PRODUCT SALES - CONTINUING OPERATIONS | |||||||||||||||||
| (AMOUNTS IN MILLIONS) | |||||||||||||||||
| (UNAUDITED) | |||||||||||||||||
| Table 3 | |||||||||||||||||
2022 | 2021 | 3Q | September YTD | ||||||||||||||
| 1Q | 2Q | 3Q | Sep YTD | 1Q | 2Q | 3Q | Sep YTD | 4Q | Full Year | Nom % | Ex-Exch % | Nom % | Ex-Exch % | ||||
| TOTAL SALES (1) | $15,901 | $14,593 | $14,959 | $45,453 | $10,627 | $11,402 | $13,154 | $35,183 | $13,521 | $48,704 | 14 | 18 | 29 | 32 | |||
| PHARMACEUTICAL | 14,107 | 12,756 | 12,963 | 39,826 | 9,238 | 9,980 | 11,496 | 30,714 | 12,039 | 42,754 | 13 | 19 | 30 | 35 | |||
| Oncology | |||||||||||||||||
| Keytruda | 4,809 | 5,252 | 5,426 | 15,487 | 3,899 | 4,176 | 4,534 | 12,609 | 4,577 | 17,186 | 20 | 26 | 23 | 28 | |||
| Alliance Revenue – Lynparza (2) | 266 | 275 | 284 | 825 | 228 | 248 | 246 | 721 | 268 | 989 | 16 | 23 | 14 | 20 | |||
| Alliance Revenue – Lenvima (2) | 227 | 231 | 202 | 660 | 130 | 181 | 188 | 498 | 206 | 704 | 7 | 11 | 33 | 36 | |||
| Alliance Revenue – Reblozyl (3) | 52 | 33 | 39 | 124 | 17 | 17 | * | * |
| * | * | ||||||
| Vaccines (4) | |||||||||||||||||
| Gardasil / Gardasil 9 | 1,460 | 1,674 | 2,294 | 5,428 | 917 | 1,234 | 1,993 | 4,144 | 1,528 | 5,673 | 15 | 20 | 31 | 35 | |||
| ProQuad / M-M-R II / Varivax | 470 | 578 | 668 | 1,716 | 449 | 516 | 661 | 1,626 | 509 | 2,135 | 1 | 3 | 6 | 7 | |||
| RotaTeq | 216 | 173 | 256 | 644 | 158 | 208 | 227 | 593 | 213 | 807 | 12 | 16 | 9 | 11 | |||
| Pneumovax 23 | 173 | 153 | 131 | 457 | 171 | 152 | 277 | 600 | 292 | 893 | -53 | -50 | -24 | -21 | |||
| Vaqta | 36 | 35 | 64 | 134 | 34 | 56 | 48 | 138 | 41 | 179 | 33 | 34 | -3 | -2 | |||
| Hospital Acute Care | |||||||||||||||||
| Bridion | 395 | 426 | 423 | 1,244 | 340 | 387 | 369 | 1,096 | 436 | 1,532 | 15 | 22 | 13 | 19 | |||
| Prevymis | 94 | 103 | 114 | 310 | 82 | 93 | 96 | 270 | 100 | 370 | 19 | 29 | 15 | 22 | |||
| Dificid | 52 | 66 | 77 | 196 | 27 | 34 | 54 | 115 | 60 | 175 | 42 | 42 | 70 | 70 | |||
| Primaxin | 58 | 64 | 63 | 185 | 65 | 60 | 70 | 194 | 65 | 259 | -9 | -5 | -5 | -3 | |||
| Noxafil | 57 | 60 | 62 | 180 | 67 | 66 | 64 | 197 | 62 | 259 | -3 | 5 | -9 | -3 | |||
| Invanz | 52 | 46 | 50 | 148 | 57 | 48 | 53 | 157 | 45 | 202 | -7 | -1 | -6 | -1 | |||
| Cancidas | 53 | 42 | 43 | 138 | 57 | 54 | 56 | 168 | 45 | 212 | -24 | -19 | -18 | -15 | |||
| Zerbaxa | 30 | 46 | 43 | 120 | (8) | (1) | (2) | (11) | 10 | (1) | * | * | * | * | |||
| Cardiovascular | |||||||||||||||||
| Alliance Revenue - Adempas/Verquvo (5) | 72 | 98 | 88 | 258 | 74 | 74 | 100 | 248 | 94 | 342 | -12 | -12 | 4 | 4 | |||
| Adempas (6) | 61 | 63 | 57 | 181 | 55 | 74 | 59 | 188 | 63 | 252 | -5 | 12 | -4 | 8 | |||
| Virology | |||||||||||||||||
| Lagevrio | 3,247 | 1,177 | 436 | 4,859 | 952 | 952 | * | * | * | * | |||||||
| Isentress / Isentress HD | 158 | 147 | 161 | 466 | 209 | 192 | 189 | 590 | 178 | 769 | -15 | -11 | -21 | -17 | |||
| Neuroscience | |||||||||||||||||
| Belsomra | 69 | 69 | 62 | 199 | 79 | 78 | 81 | 238 | 80 | 318 | -24 | -12 | -16 | -7 | |||
| Immunology | |||||||||||||||||
| Simponi | 186 | 181 | 173 | 540 | 214 | 202 | 203 | 619 | 206 | 825 | -15 | -2 | -13 | -2 | |||
| Remicade | 61 | 53 | 49 | 163 | 85 | 75 | 73 | 233 | 67 | 299 | -33 | -22 | -30 | -21 | |||
| Diabetes (7) | |||||||||||||||||
| Januvia | 779 | 756 | 717 | 2,252 | 809 | 784 | 852 | 2,445 | 878 | 3,324 | -16 | -10 | -8 | -3 | |||
| Janumet | 454 | 476 | 417 | 1,347 | 486 | 477 | 487 | 1,449 | 514 | 1,964 | -14 | -7 | -7 | -1 | |||
| Other Pharmaceutical (8) | 520 | 479 | 564 | 1,565 | 554 | 512 | 518 | 1,589 | 533 | 2,118 | 9 | 17 | -1 | 3 | |||
| ANIMAL HEALTH | 1,482 | 1,467 | 1,371 | 4,320 | 1,418 | 1,472 | 1,417 | 4,307 | 1,261 | 5,568 | -3 | 4 | - | 6 | |||
| Livestock | 832 | 826 | 829 | 2,486 | 819 | 821 | 864 | 2,503 | 791 | 3,295 | -4 | 4 | -1 | 6 | |||
| Companion Animals | 650 | 641 | 542 | 1,834 | 599 | 651 | 553 | 1,804 | 470 | 2,273 | -2 | 4 | 2 | 6 | |||
| Other Revenues (9) | 312 | 370 | 625 | 1,307 | (29) | (50) | 241 | 162 | 221 | 382 | 159 | 41 | * | * |
| * 200% or greater |
| Sum of quarterly amounts may not equal year-to-date amounts due to rounding. |
| (1) Only select products are shown. |
| (2) Alliance Revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs. |
| (3) Alliance Revenue represents royalties and a milestone payment. |
| (4) Total Vaccines sales were $2,481 million, $2,709 million and $3,552 million in the first, second and third quarter of 2022, respectively, and $1,809 million, $2,293 million, $3,315 million and $2,715 million in the first, second, third and fourth quarter of 2021, respectively. |
| (5) Alliance Revenue represents Merck's share of profits from sales in Bayer's marketing territories, which are product sales net of cost of sales and commercialization costs. |
| (6) Net product sales in Merck's marketing territories. |
| (7) Total Diabetes sales were $1,305 million, $1,300 million and $1,231 million in the first, second and third quarter of 2022, respectively, and $1,363 million, $1,330 million, $1,417 million and $1,475 million in the first, second, third and fourth quarter of 2021, respectively. |
| (8) Includes Pharmaceutical products not individually shown above. |
| (9) Other Revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities. Other Revenues related to the receipt of upfront and milestone payments for out-licensed products were $114 million, $32 million and $10 million in the first, second and third quarter of 2022, respectively, and $56 million, $135 million and $27 million in the first, third and fourth quarter of 2021, respectively. |
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KEYWORD: UNITED STATES NORTH AMERICA NEW JERSEY
INDUSTRY KEYWORD: CARDIOLOGY VETERINARY BIOTECHNOLOGY PHARMACEUTICAL ONCOLOGY HEALTH HOSPITALS CLINICAL TRIALS
SOURCE: Merck & Co., Inc.
Copyright Business Wire 2022.
PUB: 10/27/2022 06:30 AM/DISC: 10/27/2022 06:32 AM
http://www.businesswire.com/news/home/20221027005289/en