Merck & Co., Inc. (MRK) 4Q Results To Reflect Patents Expiry Impact

Merck & Co., Inc. (NYSE:MRK) will announce its financial results for the fourth quarter on Wednesday morning. The company’s results are expected to come under pressure due to expiry of patents compared to the last year.

Key Factors

There are some key points that can be looked at for Merck & Co., Inc. (NYSE:MRK)’s upcoming earnings results. One of the key focus areas for the company since 2012 was cost cutting measures. The company seems to be on track to achieving $2.5 billion savings per year before the end of the current year.

The drug maker received accelerated approval for its Keytruda in September last year and investors, as well as, analysts’ would be watching the performance of the drug keenly. The drug was meant to treat patients affected by unresectable or advanced melanoma, who were not responding to any other drugs.

Merck & Co., Inc. (NYSE:MRK) has resorted to acquisitions in the past to lift its portfolio, as well as, pipeline. The company’s recent acquisitions included Cubist Pharmaceuticals and Idenix Pharmaceuticals. Investors will look for updates to see how the acquisitions were contributing.

Additionally, the company has been facing tough competition for its generic Singulair and some other products. During the third quarter, Singulair sales witnessed a drop of 22%. Other products such as Zetia/Vytorin, Gardasil, Nasonex, and consumer care were also likely to face downside pressure based on the indications of the third quarter results.

The lead product Januvia/Janumet might continue to lead pharmaceutical sales revenue. The drug sales represented 13.6% of the company’s total sales.

Earnings Expectations

Street analysts’ seemed to have taken into consideration the patent expiry issue and some of the products turning into generic. That was the reason they have chosen to look for earnings of 86 cents a share and revenue of $10.48 billion for the December quarter representing downtick of 2.3% and 7.4% respectively.

Merck & Co., Inc. (NYSE:MRK)’s 4th quarter 2013 earnings failed to meet expectations but in the company’s previous three quarter it’s earnings have topped expectations.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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