Going down
In the previous quarter, Merck & Co., Inc. (NYSE:MRK)’s global sales amounted to $10.7 billion, 9% below last year’s figure. Net income declined from $1.7 billion in the previous year to $1.6 billion in the quarter. As a result, earnings fell by $0.04 to $0.52 per share. The company’s numbers suffered due to expiry of a few patents, currency changes, and weak sales. In particular, Merck’s anti-diabetic drug, JANUVIA, suffered from poor sales, affecting revenue.
Asian medicine
The worst performing department at Merck & Co., Inc. (NYSE:MRK) was Pharmaceutical, which saw revenue decline 12% from the previous year to $8.9 billion in the quarter. The saving grace was performance in the the emerging markets, which are proving to be an important market for Merck. In the last quarter, the region contributed approximately 21% to total pharmaceutical sales for the company. Sales in the region witnessed 6% year-on-year growth. The most prominent driver of growth was China.
In the future, Merck & Co., Inc. (NYSE:MRK) is planning to further strengthen its presence in the China & Asia-Pacific region. The company plans to open a plant in Hangzhou, China, for manufacturing and packaging pharmaceuticals. The importance of China in Merck’s global growth as a healthcare company is underlined by the fact that the country witnessed a 23% year-on-year sales growth in the last quarter. Over the next five years, Merck & Co., Inc. (NYSE:MRK) plans to invest over $1.5 billion in the country for R&D.
Deals and stuff
In the last quarter, Merck has made headway in a variety of areas, including the announcement of a new share buyback plan. The company entered into a deal involving commercialization of biosimilars with Samsung Bioepis in February this year.
Last week, the company entered into an agreement with Pfizer Inc. (NYSE:PFE) for collaborative development of ertugliflozin, an SGLT2 inhibitor used for the treatment for Type II diabetes. According to the terms of the deal, Merck & Co., Inc. (NYSE:MRK) and (NYSE:MRK) Pfizer Inc. (NYSE:PFE) will have a 60/40 share in revenue and costs. So far, Pfizer has received $60 million from Merck as part of the deal. Merck already has a presence in Type II diabetes therapy. JANUVIA, the company’s largest selling drug, belongs to a class of medicine called DPP-4 inhibitors for diabetes.
The deal with Pfizer Inc. (NYSE:PFE) allows the companies to market ertugliflozin as a stand-alone product as well as in combination with JANUVIA. The combination of the two drugs is sure to bring in a lot of profit for the companies. While for Merck & Co., Inc. (NYSE:MRK), it will mean expansion of its JANUVIA franchise, Pfizer Inc. (NYSE:PFE) will benefit from JANUVIA’s established presence in the market. If the clinical trials go well, both the companies stand to gain a lot from the agreement.
