The company reported non-GAAP (generally accepted accounting principles) earnings per share (EPS) for the first quarter of $0.83, which excludes purchase accounting adjustments, merger-related expenses and restructuring costs, as well as a tax charge related to the recently enacted health care reform legislation. First-quarter GAAP EPS was $0.09.
"The first full quarter of results for the new Merck reflect our strong focus on driving revenue growth, maintaining the momentum of the business and reducing our cost structure," said Richard T. Clark, chairman and chief executive officer. "At the same time, we made excellent progress on achieving our integration goals.
"Merck colleagues around the world are committed to satisfying our customers' needs by providing them with innovative, distinctive products and services that save and improve lives," he added. "And our expanded worldwide presence and broader product portfolio now provides many more individuals with access to the valuable and diverse set of health care solutions Merck provides than they did just a few months ago."
Select Business Highlights
- The company has been moving rapidly to complete integration actions and remains on track to achieve its synergy target of $3.5 billion of annual savings in 2012.
- Eight of Merck's top 10 product families saw growth during the quarter, carrying forward the momentum seen in the fourth quarter of 2009 performance. International sales of Merck's pharmaceutical and vaccine products reported overall strong growth of 10 percent for the first quarter of 2010, including the favorable impact of foreign exchange. For example, JANUVIA reported growth outside the United States of 60 percent for the first quarter compared to the 13 percent reported by the U.S. market.
- sanofi-aventis exercised its option to combine Merial with Intervet/Schering-Plough in a new equally-owned joint venture with Merck during the quarter. Subject to antitrust reviews and other customary closing conditions, this new joint venture will offer a broader portfolio of animal health products and services in pharmaceuticals and biologics, as well as the ability to capitalize on growth opportunities in all fields and countries around the world. Merck expects the transaction to close in the first quarter of 2011.
- The passage of health care reform in March will result in greater access to coverage and important market reforms that begin this year with more significant changes and improvements beginning in 2014. Merck, like many companies, will begin to incur costs related to the health care reform legislation starting in 2010. These costs include increased Medicaid rebates and a one-time charge related to taxes on retiree medical benefits. In addition, the company estimates that the net unfavorable sales impact related to the passage of this legislation will be approximately $170 million in 2010 and approximately $300 million to $350 million in 2011.
- Merck will hold its R & D Day and Business Briefing on Tuesday, May 11.
Today's Merck is working to help the world be well. Through our medicines, vaccines, biologic therapies, and consumer and animal products, we work with customers and operate in more than 140 countries to deliver innovative health solutions. We also demonstrate our commitment to increasing access to health care through far-reaching programs that donate and deliver our products to the people who need them. Merck. Be Well. For more information, visit www.merck.com.