Merck & Co., Inc. Quarterly Report for Q3 Ended Sep 30, 2017

Summary

Merck & Co., Inc. reported a net loss of $56 million for the third quarter of 2017, translating to a basic loss per share of $(0.02). This contrasts with a net income of $2.18 billion ($0.78 EPS) in the same period last year. The significant year-over-year decrease in profitability was largely driven by a substantial $2.35 billion charge related to the formation of an oncology collaboration with AstraZeneca, in addition to ongoing restructuring costs and other expenses. Despite the quarterly net loss, total sales for the third quarter remained relatively stable at $10.3 billion, a slight decrease of 2% year-over-year, impacted by generic competition for key products like Zetia and Vytorin, as well as the cyber-attack in June 2017. However, strong performance from Keytruda, Zepatier, Bridion, and Animal Health products, along with incremental vaccine sales following the termination of the SPMSD joint venture, provided some offset. The company remains focused on its strategic pipeline, particularly the growth of its oncology franchise.

Key Highlights

• 1Third-quarter net loss of $56 million ($0.02/share) compared to a net income of $2.18 billion ($0.78/share) in Q3 2016.
• 2Total sales for Q3 2017 were $10.3 billion, a 2% decrease year-over-year, impacted by generic competition and a cyber-attack.
• 3Keytruda sales showed significant growth, reaching $1.0 billion in Q3 2017.
• 4A substantial charge of $2.35 billion for the formation of an oncology collaboration with AstraZeneca heavily impacted Q3 2017 results.
• 5The company experienced a cyber-attack in June 2017, leading to approximately $135 million in lost sales and $175 million in related expenses.
• 6Sales of key older products such as Zetia and Vytorin continued to decline due to generic competition.
• 7The termination of the SPMSD joint venture led to incremental vaccine sales in 2017.

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