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| MRK > SEC Filings for MRK > Form 10-Q on 2-Nov-2009 | All Recent SEC Filings |
2-Nov-2009
Quarterly Report
* Cozaar and Hyzaar are registered trademarks of E.I. duPont de Nemours & Company, Wilmington, Delaware.
Sales of the Company's products were as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
($ in millions) 2009 2008 2009 2008
Pharmaceutical:
Singulair $ 1,085.0 $ 1,029.3 $ 3,399.7 $ 3,214.6
Cozaar/Hyzaar 860.9 888.3 2,605.7 2,676.3
Januvia 491.1 378.5 1,364.3 984.4
Fosamax 276.1 353.9 814.9 1,234.8
Janumet 173.0 100.7 456.1 231.5
Zocor 141.2 157.2 419.3 513.1
Maxalt 144.3 136.4 418.3 388.3
Cosopt/Trusopt 123.4 208.6 369.5 627.4
Propecia 109.0 107.9 317.8 320.6
Arcoxia 90.5 96.8 259.7 294.1
Emend 82.0 68.2 228.0 193.3
Vasotec/Vaseretic 72.5 82.1 225.8 271.5
Proscar 67.2 80.9 218.5 251.9
Other pharmaceutical (1) 476.5 519.1 1,446.5 1,734.2
Vaccine and infectious disease product
sales included in the Pharmaceutical
segment (2) 600.7 596.7 1,664.9 1,686.1
Pharmaceutical segment revenues 4,793.4 4,804.6 14,209.0 14,622.1
Vaccines(3) and Infectious Diseases:
ProQuad/M-M-R II/Varivax 461.5 430.4 1,035.9 973.8
Gardasil 311.3 401.0 841.5 1,117.1
RotaTeq 126.8 134.5 386.7 502.4
Zostavax 84.2 11.2 201.7 150.8
Hepatitis vaccines 45.7 36.2 109.0 107.9
Other vaccines 138.0 80.6 246.3 222.8
Primaxin 168.3 187.6 492.8 591.5
Isentress 197.2 107.3 517.6 231.1
Cancidas 154.7 147.9 442.2 457.4
Invanz 72.9 71.1 205.2 197.0
Crixivan/Stocrin 49.4 68.5 154.0 222.8
Other infectious disease 7.0 6.3 22.9 9.6
Vaccine and infectious disease product
sales included in the Pharmaceutical
segment (2) (600.7 ) (596.7 ) (1,664.9 ) (1,686.1 )
Vaccines and Infectious Diseases segment
revenues 1,216.3 1,085.9 2,990.9 3,098.1
Other segment revenues(4) 21.6 21.2 47.2 65.3
Total segment revenues 6,031.3 5,911.7 17,247.1 17,785.5
Other (5) 18.4 32.2 87.7 32.4
$ 6,049.7 $ 5,943.9 $ 17,334.8 $ 17,817.9
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(1) Other pharmaceutical primarily includes sales of other human pharmaceutical products and revenue from the Company's relationship with AZLP primarily relating to sales of Nexium, as well as Prilosec. Revenue from AZLP was $339.8 million and $375.2 million for the third quarter of 2009 and 2008, respectively, and was $1,081.9 million and $1,235.7 million for the first nine months of 2009 and 2008, respectively.
(2) Sales of vaccine and infectious disease products by non-U.S. subsidiaries are included in the Pharmaceutical segment.
(3) These amounts do not reflect sales of vaccines sold in most major European markets through the Company's joint venture, Sanofi Pasteur MSD, the results of which are reflected in Equity income from affiliates. These amounts do, however, reflect supply sales to Sanofi Pasteur MSD.
(4) Includes other non-reportable human and animal health segments.
(5) Other revenues are primarily comprised of miscellaneous corporate revenues, sales related to divested products or businesses and other supply sales not included in segment results.
Sales are presented net of discounts and returns. The provision for discounts includes indirect customer discounts that occur when a contracted customer purchases directly through an intermediary wholesale purchaser, known as chargebacks, as well as indirectly in
the form of rebates owed based upon definitive contractual agreements or legal
requirements with private sector and public sector (Medicaid and Medicare
Part D) benefit providers, after the final dispensing of the product by a
pharmacy to a benefit plan participant. These discounts, in the aggregate,
reduced revenues by $600.4 million and $529.7 million for the three months ended
September 30, 2009 and 2008, respectively, and by $1,679.0 million and
$1,581.7 million for the nine months ended September 30, 2009 and 2008,
respectively. Inventory levels at key wholesalers for each of the Company's
major pharmaceutical products are generally two weeks.
Pharmaceutical Segment Revenues
Sales of the Pharmaceutical segment for the third quarter of 2009 were
$4.79 billion, comparable to the third quarter of 2008. Sales of the
Pharmaceutical segment declined 3% for the first nine months of 2009 to
$14.21 billion compared with the corresponding period of 2008. These results
reflect declines in Fosamax, Cosopt/Trusopt, lower supply sales to AZLP, and
lower sales of Zocor,partially offset by growth in Januvia, Janumet and
Singulair. In addition, foreign exchange negatively impacted sales in 2009 as
compared with 2008.
Worldwide sales for Singulair were $1.09 billion for the third quarter of 2009,
representing an increase of 5% over the third quarter of 2008. Sales for the
first nine months of 2009 were $3.40 billion, an increase of 6% compared with
the first nine months of 2008. Sales growth in both periods was driven by price
increases and strong performance in Japan. Singulair continues to be the number
one prescribed branded product in the U.S. respiratory market.
Global sales of Cozaar and Hyzaar were $860.9 million for the third quarter of
2009, a decrease of 3% compared with the third quarter of 2008. Sales for the
first nine months of 2009 were $2.61 billion, a decline of 3% compared with the
first nine months of 2008. The decline in both periods was driven in part by the
unfavorable effect of foreign exchange, partially offset by the strong
performance of Hyzaar in Japan (marketed as Preminent). Cozaar and Hyzaar are
among the leading medicines in the angiotensin receptor blocker class.
Global sales of Januvia, Merck's dipeptidyl peptidase-4 ("DPP-4") inhibitor for
the treatment of type 2 diabetes, were $491.1 million in the third quarter of
2009, an increase of 30% compared with the third quarter of 2008. Sales for the
first nine months of 2009 were $1.36 billion, an increase of 39% compared with
the first nine months of 2008. DPP-4 inhibitors represent a class of
prescription medications that improve blood sugar control in patients with type
2 diabetes by enhancing a natural body system called the incretin system, which
helps to regulate glucose by affecting the beta cells and alpha cells in the
pancreas. In the vast majority of markets where more than one DPP-4 inhibitor
exists, sitagliptin is the market leader. Januvia recently received regulatory
approval in Japan and China.
In June 2009, Merck received a positive opinion from the European Medicines
Agency's Committee for Medicinal Products for Human Use ("CHMP") recommending
restricted first line use of Januvia for the treatment of type 2 diabetes. With
this positive opinion, the CHMP recommends that sitagliptin be indicated to
improve glycemic control when diet and exercise alone do not provide adequate
glycemic control and when metformin is inappropriate due to contraindications or
intolerance. If this opinion is accepted by the European Commission ("EC"),
sitagliptin will be the only diabetes treatment in the DPP-4 inhibitor class to
have a restricted first line indication.
Worldwide sales of Janumet, Merck's oral antihyperglycemic agent that combines
sitagliptin (Merck's DPP-4 inhibitor, Januvia) with metformin in a single tablet
to target all three key defects of type 2 diabetes, were $173.0 million for the
third quarter of 2009 compared with $100.7 million for the third quarter of
2008. Sales for the first nine months of 2009 were $456.1 million compared with
$231.5 million for the same period of 2008. Janumet was initially approved as an
adjunct to diet and exercise, to improve blood sugar control in adult patients
with type 2 diabetes who are not adequately controlled on metformin or
sitagliptin alone, or in patients already being treated with the combination of
sitagliptin and metformin. In February 2008, Merck received U.S. Food and Drug
Administration ("FDA") approval to market Janumet as an initial treatment for
type 2 diabetes. In July 2008, Janumet was approved for marketing in the
European Union ("EU"), Iceland and Norway.
In September 2009, Merck announced it received a positive opinion from the CHMP
for Januvia tablets and Janumet tablets recommending their use as add-on to
insulin for the treatment of type 2 diabetes. If adopted by the EC, sitagliptin
will be the only diabetes treatment in the DPP-4 inhibitor class to have an
indication for use as add-on to insulin in the EU. The labeling for both Januvia
and Janumet state that they have not been studied in combination with insulin.
In the United States, a supplemental New Drug Application that is similar to the
European proposal concerning the use of Januvia and Janumet in combination with
insulin has been accepted by the FDA and is currently under review. The use of
Januvia and Janumet in combination with insulin is investigational in the United
States.
Global sales for Fosamax and Fosamax Plus D (marketed as Fosavance throughout
the EU and as Fosamacin Japan) were $276.1 million for the third quarter of 2009
and were $814.9 million for the first nine months of 2009, representing declines
of 22% and 34%, respectively, over the comparable periods of 2008. Since
substantially all formulations of these medicines have lost U.S. market
exclusivity, the Company is experiencing a significant decline in sales in the
United States within the Fosamax franchise and the
Company expects such declines to continue. The Company has also lost market
exclusivity for certain formulations in several major European markets.
Sales of Cosopt and Trusopt declined 41% in both the third quarter and first
nine months of 2009 compared with the corresponding periods of 2008. The patent
that provided U.S. market exclusivity for Cosopt and Trusopt expired in
October 2008. Cosopt has also lost market exclusivity in a number of major
European markets. Trusopt will lose market exclusivity in a number of major
European markets in April 2012.
Worldwide sales of Zocor declined 10% and 18% in the third quarter and first
nine months of 2009, respectively, compared with the corresponding periods of
2008. Zocor lost U.S. market exclusivity in June 2006 and has also lost market
exclusivity in all major international markets.
The patents that provide U.S. marketing exclusivity for Cozaar and Hyzaar expire
in April 2010 and the patent that provides U.S. marketing exclusivity for
Singulair expires in August 2012. The Company expects that within the two years
following each product's respective patent expiration, it will lose
substantially all U.S. sales of that product, with most of those declines coming
in the first full year following patent expiration. Full year 2008 U.S. sales of
Cozaar/Hyzaar were $1.2 billion and full year 2008 U.S. sales of Singulair were
$2.8 billion. In addition, the Company anticipates that the patents for Cozaar,
Hyzaar and Singulair will expire in a number of major European markets in
March 2010, February 2010, and August 2012, respectively, and the Company
expects sales of these products in those markets will decline significantly
thereafter.
During the first quarter of 2009, Merck divested its U.S. marketing rights to
the Timopticfranchise to Aton Pharma, Inc. The Timoptic franchise includes
ophthalmic products to treat elevated intraocular pressure in patients with
ocular hypertension or open-angle glaucoma.
In September 2009, Merck launched Saflutan (tafluprost) in the United Kingdom
and Spain, and additional launches in other countries are expected over the next
several months, pending regulatory approvals. Saflutan is a preservative free,
synthetic analogue of the prostaglandin F2†for the reduction of elevated
intraocular pressure in appropriate patients with primary open-angle glaucoma
and ocular hypertension. Tafluprost is in Phase III development in the United
States. In April 2009, Merck and Santen Pharmaceutical Co., Ltd. ("Santen")
announced a worldwide licensing agreement for tafluprost (see "Research and
Development Update" below).
In June 2009, Merck began launching Tredaptive (extended-release
niacin/laropiprant) in international markets and as of the third quarter the
Company has launched in 13 countries including Mexico, the United Kingdom, Spain
and Germany. Tredaptive is a lipid-modifying therapy for patients with mixed
dyslipidemia and primary hypercholesterolemia. Tredaptive, also known by the
trademark of Cordaptive in some places, is now approved in 44 countries outside
the United States. In the United States, it remains investigational.
Vaccines and Infectious Diseases Segment Revenues
Sales of the Vaccines and Infectious Diseases segment grew 12% to $1.22 billion
in the third quarter of 2009 primarily driven by higher sales of Zostavax,
Pneumovax, Isentress and the pediatric formulation of Vaqta, partially offset by
lower sales of Gardasil. Sales of the Vaccines and Infectious Diseases segment
declined 3% to $2.99 billion in the first nine months of 2009 compared with the
same periods of 2008 primarily due to lower sales of Gardasil and RotaTeq,
partially offset by higher sales of Isentress, Pneumovax, Varivax, and the
pediatric formulation of Vaqta.
The following discussion of vaccine and infectious disease product sales
includes total vaccine and infectious disease product sales, the majority of
which are included in the Vaccines and Infectious Diseases segment and the
remainder, representing sales of these products by non-U.S. subsidiaries, are
included in the Pharmaceutical segment. These amounts do not reflect sales of
vaccines sold in most major European markets through Sanofi Pasteur MSD
("SPMSD"), the Company's joint venture with Sanofi Pasteur, the results of which
are reflected in Equity income from affiliates (see "Selected Joint Venture and
Affiliate Information" below). Supply sales to SPMSD, however, are reflected in
Vaccines and Infectious Diseases segment revenues.
Worldwide sales of Gardasil, as recorded by Merck, were $311.3 million for the
third quarter of 2009, a decline of 22% compared with the third quarter of 2008
and were $841.5 million for the first nine months of 2009, a decline of 25% over
the comparable period of 2008. Gardasil, the world's top-selling human
papillomavirus ("HPV") vaccine is indicated for girls and women nine through
26 years of age for the prevention of cervical, vulvar and vaginal cancers,
precancerous or dysplastic lesions, and genital warts caused by HPV types 6, 11,
16 and 18. Sales performance was driven largely by declines in the United States
which continues to be affected by the saturation of the 13 to 18 year-old female
cohort due to rapid early uptake, and ongoing challenges to vaccinating the 19
to 26 female age group.
In October 2009, Merck announced that the FDA approved Gardasil for use in boys
and men 9 through 26 years of age for the prevention of genital warts caused by
HPV types 6 and 11, making Gardasilthe only HPV vaccine approved for use in
males. Later
in October 2009, the Company announced that the U.S. Centers for Disease Control
and Prevention's ("CDC's") Advisory Committee on Immunization Practices ("ACIP")
supports the permissive use of Gardasil for boys and young men ages 9 to 26,
which means that Gardasil may be given to males ages 9 to 26 to reduce the
likelihood of acquiring genital warts at the discretion of the patient's health
care provider. The ACIP also voted to recommend that funding be provided for
the use of Gardasil in males through the Vaccines for Children ("VFC")
program. For females, the ACIP also voted to recommend vaccination with either
the bivalent or the quadrivalent HPV vaccine for the prevention of HPV 16 and 18
related cervical cancers, precancers and dysplastic lesions, and recommended
vaccination with the quadrivalent HPV vaccine, Gardasil, for the prevention of
cervical, vulvar and vaginal cancers, precancers and dysplastic lesions due to
HPV types 16 or 18, and for prevention of genital warts due to HPV types 6 or
11.
In January 2009, the FDA issued a second complete response letter regarding the
sBLA for the use of Gardasil in women ages 27 though 45. The agency completed
its review of the response that Merck provided in July 2008 to the FDA's first
complete response letter issued in June 2008 and has recommended that Merck
submit additional data when the 48 month study has been completed. The initial
sBLA included data collected through an average of 24 months from enrollment
into the study, which is when the number of pre-specified endpoints had been
met. Following a review of the final results of the study, Merck anticipates
providing a response to the FDA in the fourth quarter of 2009. The complete
response letter does not affect current indications for Gardasil in females ages
9 through 26.
In May 2009, the Company announced Gardasil had been awarded World Health
Organization ("WHO") pre-qualification. Gardasil is the first cervical cancer
vaccine to receive WHO pre-qualification. WHO pre-qualification means that
Gardasil is now eligible for procurement by the United Nations Children's Fund
and other United Nations agencies, including the Pan American Health
Organization, for use in national immunization programs.
The Company has received regulatory approvals in the United States and certain
other markets to increase its manufacturing capacity for varicella zoster virus
("VZV")-containing vaccines. The Company is manufacturing bulk varicella and is
producing doses of Varivax and Zostavax consistent with product demand. ProQuad,
the Company's combination vaccine that helps protect against measles, mumps,
rubella and chickenpox, one of the VZV-containing vaccines, is currently not
available for ordering; however, orders have been transitioned, as appropriate,
to M-M-R II and Varivax. Total sales as recorded by Merck for ProQuad were
$9.5 million for the first nine months of 2008.
Merck's sales of Varivax, the Company's vaccine for the prevention of chickenpox
(varicella), were $356.3 million for the third quarter of 2009 compared with
$336.7 million for the third quarter of 2008 and were $777.3 million for the
first nine months of 2009 compared with $710.6 million for the first nine months
of 2008. Varivax is currently the only vaccine available in the United States to
help protect against chickenpox due to the unavailability of ProQuad. Merck's
sales of M-M-R II, a vaccine to help protect against measles, mumps, and
rubella, were $105.5 million for the third quarter of 2009 compared with
$93.9 million for the third quarter of 2008 and were $260.8 million for the
first nine months of 2009 compared with $253.7 million for the first nine months
of 2008. Combined sales of ProQuad, M-M-R II and Varivax increased 7% in the
third quarter of 2009 and increased 6% for the first nine months of 2009
compared with the same periods of 2008.
RotaTeq achieved worldwide sales as recorded by Merck of $126.8 million for the
third quarter of 2009, a decline of 6% compared with the third quarter of 2008
and were $386.7 million for the first nine months of 2009, a decrease of 23%
compared with the same period in 2008. During the nine months ended
September 30, 2008, the Company recorded $54 million in revenue as a result of
government purchases for the CDC's Strategic National Stockpile. RotaTeq is
experiencing moderate impact from competition in the United States, with a
greater impact in the public sector.
Sales of Zostavax, as recorded by Merck, were $84.2 million for the third
quarter of 2009 as compared with $11.2 million in the third quarter of 2008.
Sales for the first nine months of 2009 were $201.7 million compared with
$150.8 million for the comparable period of 2008. Sales performance in 2009 and
2008 was affected by supply issues. In early June 2009, the Company returned to
normal shipping schedules for Zostavax.
Sales of Pneumovax, included in Other vaccines, were $129.7 million for the
third quarter of 2009 compared with $57.6 million for the third quarter of 2008
and were $217.7 million for the first nine months of 2009 compared with $137.0
million for the same period of 2008 due to increased demand.
Sales of Primaxin were $168.3 million in the third quarter of 2009, a decline of
10% compared with the third quarter of 2008 and were $492.8 million for the
first nine months of 2009, a decline of 17% compared with the same period of
2008. These results reflect competitive pressures, and for the nine month period
also reflect limited supply constraints. Patents on Primaxin have expired
worldwide. Accordingly, the Company is experiencing a significant decline in
sales of this product and the Company expects the decline to continue.
Worldwide sales for Isentress were $197.2 million in the third quarter of 2009
compared with $107.3 million for the third quarter of 2008 and were
$517.6 million for the first nine months of 2009 compared with $231.1 million
for the first nine months of 2008.
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