8-KEarnings & ResultsOther EventsExhibits & Filings

Merck & Co., Inc. 8-K Report, Financial Results (Apr 21, 2022)

Filed April 21, 2022For Securities:MRK

Summary

Merck & Co., Inc. (MRK) filed an 8-K on April 20, 2022, primarily announcing a change in its non-GAAP financial reporting. Starting in 2022, Merck will no longer exclude expenses related to upfront and milestone payments from collaborations and licensing agreements, as well as charges for pre-approval assets acquired through asset acquisitions, from its non-GAAP results. This adjustment aligns the company with guidance from the U.S. Securities and Exchange Commission (SEC) staff. While this change will not impact the first quarter of 2022 or previously reported first quarter 2021 non-GAAP results (due to the absence of significant charges in those periods), it will affect previously reported non-GAAP results for other periods in 2021 and for 2020. The company has provided recast historical non-GAAP financial information for these periods as an exhibit to this filing, allowing investors to analyze trends under the new reporting methodology. This is a technical accounting change that impacts how certain development-related costs are presented in adjusted earnings, rather than a change in underlying operational performance.

Key Highlights

  • 1Merck is changing its non-GAAP reporting methodology to exclude fewer items.
  • 2Expenses for upfront/milestone payments from collaborations and licensing will now be included in non-GAAP results.
  • 3Charges related to pre-approval assets from asset acquisitions will also be included in non-GAAP results.
  • 4This change is made to align with views expressed by the SEC staff.
  • 5The change impacts historical non-GAAP results for 2020 and parts of 2021, with recast financials provided.
  • 6The change does not affect reported non-GAAP results for Q1 2022 or Q1 2021.
  • 7No other significant operational or financial results were disclosed in this specific 8-K filing.

Frequently Asked Questions

Merck is changing its non-GAAP financial reporting. Starting in 2022, it will no longer exclude expenses related to upfront and milestone payments from collaborations/licensing and charges for pre-approval assets from asset acquisitions when reporting non-GAAP results.

The company is making this change to align its non-GAAP reporting practices with the views expressed by the staff of the U.S. Securities and Exchange Commission (SEC) following a consultation with pharmaceutical industry peers.

No, this change will not affect the non-GAAP results reported for the first quarter of 2022 or previously reported non-GAAP results for the first quarter of 2021. This is because Merck did not have significant charges related to these specific items during those particular periods.

This change will affect previously reported non-GAAP results for other periods in 2021 and for the full year 2020. Merck has provided recast historical non-GAAP financial information for these periods as Exhibit 99.1 to this filing, allowing investors to compare performance under the new methodology.