Summary
Merck & Co., Inc. reported its first-quarter 2018 financial results, showing a significant increase in sales to $10.0 billion, up 6% from the prior year, driven by strong performance in oncology, particularly Keytruda, and growth in hospital acute care and animal health segments. Despite a notable increase in R&D expenses to $3.2 billion, largely due to a substantial collaboration charge with Eisai, the company's net income attributable to Merck & Co., Inc. decreased to $736 million ($0.27 EPS) from $1.55 billion ($0.56 EPS) in the prior year. This decline was primarily influenced by a significant R&D charge related to the Eisai collaboration and a higher effective tax rate. Operationally, the company is recovering from a 2017 cyber-attack, which is expected to impact full-year sales by approximately $200 million. Merck also announced a strategic collaboration with Eisai for the co-development and co-commercialization of Lenvima, and the pending acquisition of Viralytics, signaling continued investment in pipeline expansion and strategic growth areas.
Financial Highlights
52 data points| Revenue | $10.04B |
| Cost of Revenue | $3.18B |
| Gross Profit | $6.85B |
| R&D Expenses | $3.20B |
| SG&A Expenses | $2.51B |
| Interest Expense | $185.00M |
| Net Income | $736.00M |
| EPS (Basic) | $0.27 |
| EPS (Diluted) | $0.27 |
| Shares Outstanding (Basic) | 2.69B |
| Shares Outstanding (Diluted) | 2.71B |
Key Highlights
- 1Worldwide sales increased by 6% to $10.0 billion, primarily driven by strong Keytruda sales in oncology and growth in hospital acute care and animal health.
- 2Research and Development (R&D) expenses surged by 78% to $3.2 billion, largely due to a $1.4 billion charge related to the oncology collaboration with Eisai.
- 3Net income attributable to Merck & Co., Inc. decreased to $736 million from $1.55 billion in the prior year, impacted by the Eisai collaboration charge and a higher effective tax rate.
- 4Earnings per share (EPS) diluted decreased to $0.27 from $0.56 in the prior year.
- 5The company announced a significant strategic collaboration with Eisai for Lenvima and a pending acquisition of Viralytics, indicating continued investment in pipeline expansion.
- 6Merck is still experiencing residual effects from a 2017 cyber-attack, which is expected to unfavorably impact sales by approximately $200 million for the full year 2018.
- 7The Animal Health segment was identified as a reportable segment for the first time in Q1 2018, showing sales growth of 13% to $1.1 billion.