Summary
Merck & Co., Inc. reported total sales of $40.122 billion for the fiscal year ending December 30, 2017. The Pharmaceutical segment remains the primary revenue driver, with significant contributions from Keytruda, Januvia/Janumet, and Gardasil/Gardasil 9. However, the company experienced sales declines in established products like Zetia/Vytorin and Remicade due to generic and biosimilar competition. The company also faced challenges from a cyber-attack in June 2017, which impacted sales and incurred additional expenses, and a hurricane that affected operations in Puerto Rico. Despite these headwinds, Merck continued to invest heavily in research and development, with significant progress noted in expanding Keytruda's indications and advancing its pipeline for HIV and diabetes. Merck's financial performance in 2017 was impacted by a provisional net tax charge related to the enactment of the U.S. Tax Cuts and Jobs Act, as well as charges related to collaborations. The company actively returned capital to shareholders through dividends and share repurchases, signaling confidence in its ongoing operations and future growth prospects. Investors should monitor the impact of ongoing patent expirations and the success of new product launches and pipeline developments, particularly in the oncology and infectious disease areas.
Financial Highlights
54 data points| Revenue | $40.12B |
| Cost of Revenue | $12.78B |
| Gross Profit | $27.35B |
| R&D Expenses | $10.34B |
| SG&A Expenses | $10.07B |
| Interest Expense | $754.00M |
| Net Income | $2.39B |
| EPS (Basic) | $0.88 |
| EPS (Diluted) | $0.87 |
| Shares Outstanding (Basic) | 2.73B |
| Shares Outstanding (Diluted) | 2.75B |
Key Highlights
- 1Total sales reached $40.122 billion in 2017, a slight increase of 1% from 2016, driven by strong performance in Keytruda, Zepatier, and Bridion, as well as the Animal Health business.
- 2Keytruda sales surged to $3.809 billion, up significantly from $1.402 billion in 2016, highlighting its growing importance in Merck's oncology portfolio.
- 3Generic and biosimilar competition led to substantial sales declines for Zetia/Vytorin ($2.3 billion, down 40%) and Remicade (partially owned by Merck, down 34%), impacting overall revenue growth.
- 4Merck experienced a cyber-attack in June 2017, resulting in an estimated $260 million sales impact and $285 million in related expenses, with residual effects anticipated in 2018.
- 5Research and Development expenses remained high at $10.208 billion, reflecting continued investment in pipeline development, especially in oncology and infectious diseases.
- 6The company returned $9.2 billion to shareholders in 2017 through dividends and share repurchases, demonstrating a commitment to shareholder value.
- 7Zepatier, a Hepatitis C treatment, showed strong growth with sales of $1.660 billion in 2017, up from $555 million in 2016, though future growth may be affected by increasing competition.