-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NWaM+sIj15nHKl+lHLzcJTVkX7YIfHG7uySlHda7DtOO745yaTRhC1iw6KvZ+kgG QVkcps9LxHLdyqZvEbQUAw== 0000950123-02-009793.txt : 20021018 0000950123-02-009793.hdr.sgml : 20021018 20021018161409 ACCESSION NUMBER: 0000950123-02-009793 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20021018 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: FILED AS OF DATE: 20021018 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERCK & CO INC CENTRAL INDEX KEY: 0000064978 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 221109110 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03305 FILM NUMBER: 02792763 BUSINESS ADDRESS: STREET 1: ONE MERCK DR STREET 2: P O BOX 100 CITY: WHITEHOUSE STATION STATE: NJ ZIP: 08889-0100 BUSINESS PHONE: 9084234044 MAIL ADDRESS: STREET 1: ONE MERCK DR STREET 2: PO BOX 100 WS3AB-05 CITY: WHITEHOUSE STATION STATE: NJ ZIP: 08889-0100 8-K 1 y64598e8vk.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) October 18, 2002 MERCK & CO., Inc. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) New Jersey - -------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 1-3305 22-1109110 - ------------------------------------- ------------------------------------ (Commission File Number) (I.R.S. Employer Identification No.) One Merck Drive, PO Box 100, Whitehouse Station, NJ 08889-0100 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (908) 423-1000 Item 7. Financial Statements and Exhibits (c) Exhibits Exhibit 99(a) Press release issued Filed with October 18, 2002 regarding this document earnings for third quarter Exhibit 99(b) Certain supplemental information Filed with not included in the press release this document Item 9. Regulation FD Disclosure Incorporated by reference is a press release issued by the Registrant on October 18, 2002, attached as Exhibit 99(a), regarding earnings for third quarter. Also incorporated by reference is certain supplemental information not included in the press release, attached as Exhibit 99(b). This information is not "filed" pursuant to the Securities Exchange Act and is not incorporated by reference into any Securities Act registration statements. Additionally, the submission of this report on Form 8-K is not an admission as to the materiality of any information in this report that is required to be disclosed solely by Regulation FD. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. MERCK & CO., Inc. Date: October 18, 2002 By: /s/ Debra A. Bollwage -------------------------------- DEBRA A. BOLLWAGE Assistant Secretary EXHIBIT INDEX Exhibit Number Description - ------- ----------- 99(a) Press release issued October 18, 2002 regarding earnings for third quarter 99(b) Certain supplemental information not included in the press release EX-99.A 3 y64598exv99wa.txt PRESS RELEASE Exhibit 99(a) Press Contacts: Janet Skidmore Investor Contact: Mark Stejbach (908) 423-3046 (908) 423-5185 Chris Loder (908) 423-3786 MERCK ANNOUNCES THIRD-QUARTER 2002 EARNINGS PER SHARE OF 83 CENTS - MERCK'S FIVE LARGEST PRODUCTS DRIVE HUMAN HEALTH SALES, ACHIEVE SALES INCREASE OF 8% OVER THIRD QUARTER 2001 - COMPANY AFFIRMS 2002 EARNINGS PER SHARE ESTIMATES WHITEHOUSE STATION, N.J., Oct. 18, 2002 - Merck & Co., Inc. today announced that earnings per share for the third quarter of 2002 were $0.83, compared to $0.84 in the third quarter of 2001. Consolidated net income was $1,884.0 million, compared to $1,948.2 million in the third quarter of last year. Consolidated sales were $12.9 billion for the quarter, an increase of 8% compared to the same period last year. For the first nine months of 2002, earnings per share were $2.31, compared to $2.33 in the first nine months of 2001. Consolidated net income was $5,259.7 million, compared to $5,420.9 million for the first nine months of 2001. Consolidated sales grew 8% for the first nine months of 2002 to $37.9 billion. Merck's five key growth drivers - ZOCOR, VIOXX, COZAAR and HYZAAR*, FOSAMAX and SINGULAIR - collectively had increased sales of 8% for the quarter and drove Merck's human health sales performance. Overall, Merck's human health sales in its core pharmaceuticals business were in line with 2001 for the third quarter and first nine months, excluding a 1% benefit and a 1% unfavorable effect from foreign exchange for the third quarter and first nine months, respectively. The human health sales performance includes the unfavorable effect from products affected by patent expirations, including VASOTEC, VASERETIC, PEPCID, MEVACOR, PRINIVIL and PRINZIDE. Sales outside of the United States accounted for 38% of the company's first nine months of 2002 human health sales. Merck's consolidated sales growth also benefited from Medco Health Solutions, Inc.'s (Medco Health) sales, which increased this quarter by 13% over the third quarter of 2001 and 14% over the first nine months of 2002. - more - *COZAAR and HYZAAR are registered trademarks of E.I. DuPont de Nemours & Company, Wilmington, DE, USA 2 Marketing and Administrative expenses increased 2% for the quarter and decreased 4% for the first nine months of 2002. The increase for the quarter reflects the impact of additional sales forces in support of new product introductions and new indications. Underlying the growth in the third quarter and reflected in the decrease for the nine months are operational-efficiency and work redesign initiatives, which reduced the company's overall cost structure. Merck also announced today that it is increasing the level of detail it provides to investors by reporting sales for its major individual products on a net basis. FIVE KEY GROWTH DRIVERS REMAIN SOLID "We focus on translating cutting-edge science into breakthrough medicine," said Raymond V. Gilmartin, chairman, president and chief executive officer. "The potential of our five largest medicines continues to be demonstrated by results of key clinical outcomes studies. By focusing on what we do best - discovering and developing important new medicines that improve and save people's lives - Merck's growth potential remains strong." ZOCOR, Merck's cholesterol-modifying medicine, continued its solid performance with third quarter worldwide sales rising to $1.5 billion. ZOCOR remains a therapy of choice for many physicians as studies confirm the demonstrated ability of ZOCOR to act favorably on all three key lipid parameters - - LDL-C (so-called "bad" cholesterol), HDL-C (so-called "good" cholesterol) and triglycerides. Results from the landmark Heart Protection Study (HPS), the largest-ever study using a cholesterol-modifying medicine, were published in July in The Lancet. In the third quarter, a supplemental New Drug Application (NDA) was filed with the U.S. Food and Drug Administration (FDA) to incorporate data from HPS into the ZOCOR label. HPS showed that ZOCOR 40 mg was the first and only cholesterol-lowering medicine proven to save lives by reducing the risk of heart attack and stroke in high-risk patients, including people with diabetes, regardless of cholesterol levels. New federal guidelines, which now report that people with diabetes are at increased risk for cardiovascular disease, have increased the number of people in the United States who are eligible for statin therapy by an additional 10 million. VIOXX, the company's second-largest selling medicine, achieved $755 million in worldwide sales in the third quarter. Gastrointestinal (GI) safety remains an important consideration when physicians are choosing a medication for the treatment of arthritis. Since the GI outcomes data from the landmark 8,000-patient VIOXX Gastrointestinal Outcomes Research (VIGOR) study were added to the labeling for VIOXX, the number of key managed care accounts with VIOXX in an advantaged position among coxibs continues to grow. More than 20 million people now have exclusive or preferred access to VIOXX through their managed care plans. - more - 3 In clinical studies in acute pain, VIOXX has demonstrated superior efficacy to codeine with acetaminophen as well as oxycodone with acetaminophen. Outside the United States, VIOXX maintains its leadership position as the most widely prescribed COX-2 inhibitor in Latin America, Canada and Europe, where it is the coxib with the broadest range of indications, including acute pain (VIOXXACUTE). COZAAR and HYZAAR, Merck's high blood pressure medicines, are together the No. 1 prescribed angiotensin II antagonists (AIIAs) worldwide. In the third quarter, global sales for the two products reached $550 million. In September, the FDA approved COZAAR to reduce the rate of progression of nephropathy (kidney disease) in Type 2 diabetic patients with hypertension and nephropathy. The new indication is based on the Reduction of Endpoint in Non-Insulin Dependent Diabetes Mellitus with the Angiotensin II Antagonist Losartan (RENAAL) study, which showed that while COZAAR had no effect on overall mortality, it significantly delayed progression to end-stage renal disease (ESRD), a condition requiring dialysis or kidney transplantation for survival. Merck has submitted a supplemental NDA for COZAAR based on the results of the Losartan Intervention for Endpoint Reduction in Hypertension (LIFE) study announced earlier this year. The study found that use of COZAAR significantly reduced the combined risk of cardiovascular death, heart attack and stroke in patients with hypertension and left ventricular hypertrophy (LVH) compared to the beta-blocker atenolol. An analysis of the treatment effect by ethnicity suggested that black patients treated with atenolol were at lower risk of experiencing cardiovascular death, heart attack and stroke compared to patients treated with COZAAR, even though both drugs lowered blood pressure to a similar degree. A subanalysis of the LIFE study in patients with isolated systolic hypertension (ISH) was published in a September edition of the Journal of the American Medical Association (JAMA). This study showed that COZAAR significantly reduced the risk of stroke by 41 percent and cardiovascular death by 46 percent in this patient population compared to atenolol, although COZAAR did not demonstrate a statistically significant reduction in the overall combined risk of cardiovascular death, heart attack and stroke. Global sales of FOSAMAX, the leading product worldwide for the treatment of postmenopausal, male and glucocorticoid-induced osteoporosis, were solid in the third quarter of 2002, reaching $455 million. Two new studies on FOSAMAX were presented at the annual meeting of the American Society of Bone Mineral Research (ASBMR) in September. The first showed that over a 10-year period FOSAMAX provided continuous increases in lumbar spine bone mass. A second study, the first head-to-head study of bisphosphonates, showed that in - more - 4 European patients FOSAMAX 70 mg once weekly increased lumbar spine and hip bone mineral density (BMD) more than risedronate 5 mg once daily using a European dosing regimen. SINGULAIR, Merck's once-a-day leukotriene receptor antagonist, continued its strong performance in the third quarter, with global sales of $350 million. The FDA is currently reviewing SINGULAIR, the No. 1 prescribed asthma controller in the United States, for a possible new indication as treatment of seasonal allergic rhinitis (hay fever). Positive results from a major trial involving SINGULAIR were presented at the European Respiratory Society meeting in Stockholm in September. The study showed SINGULAIR dosed once-a-day, taken with the inhaled corticosteroid (ICS) budesonide dosed at 800 mg/day, was at least as effective in controlling asthma as budesonide alone at double the dose (1600 mg/day), as measured by morning peak flow rate (a measure of lung function). ARCOXIA AND ZETIA FUEL PIPELINE ARCOXIA and ZETIA are two investigational medicines currently under regulatory review for approval in many countries of the world. With the completion of the European Union's Mutual Recognition Procedure, which excluded France and Germany, ARCOXIA has received medical clearance in the remaining European countries as a once-daily treatment for osteoarthritis, rheumatoid arthritis and acute gouty arthritis. To date, ARCOXIA has been launched in the United Kingdom, Mexico, Brazil and several other countries in Latin America. Results from a study of ARCOXIA in patients with rheumatoid arthritis were published in the August issue of the Journal of Rheumatology. The study showed that ARCOXIA 90 mg once daily provided superior improvements in pain and inflammation compared to both placebo and naproxen 500 mg twice daily, a widely prescribed nonsteroidal anti-inflammatory drug (NSAID) for patients with rheumatoid arthritis. In a similarly designed study, ARCOXIA provided comparable efficacy to naproxen. Another study of ARCOXIA was presented in August at the World Congress on Pain in San Diego. That study showed that ARCOXIA 120 mg provided significantly greater pain relief following dental surgery compared to oxycodone 10 mg combined with acetaminophen 650 mg. In addition to the pain relief seen with ARCOXIA, significantly fewer patients taking ARCOXIA experienced nausea and vomiting, common side effects of narcotic pain relievers. Yesterday, Merck and Schering-Plough Corp. announced that ezetimibe received marketing approval in Germany for use alone and with all marketed statins for the treatment of elevated cholesterol levels. Ezetimibe will be marketed as EZETROL in Germany. If approved in the United States, ezetimibe will be marketed under the tradename ZETIA. - more - 5 At the European Society of Cardiology meeting in September, Merck/Schering-Plough Pharmaceuticals reported two analyses from two Phase III clinical trials that showed ZETIA 10 mg provided consistent reductions in LDL-C when co-administered with any dose of any statin. In the first analysis, which involved the Add-On study, ZETIA reduced LDL-C by an additional 25 percent when combined with simvastatin, atorvastatin and all marketed statins compared to a 4 percent reduction seen with the addition of placebo to ongoing statin therapy. In the second analysis, which involved four previously presented co-administration studies, ZETIA provided significant additional reductions in LDL-C at every dose of atorvastatin, simvastatin, pravastatin and lovastatin. MEDCO HEALTH SOLUTIONS, INC. DELIVERS STRONG RESULTS Medco Health continued to deliver strong sales growth in the third quarter, increasing 13% over the third quarter of 2001. Medco Health continued to expand its pre-eminent home delivery business in the third quarter. Medco Health's home delivery prescriptions grew by 9 percent over the third quarter 2001 to 20.2 million, and now represent 16 percent of Medco Health's total prescription volume. Medco Health has the largest and most highly automated home delivery pharmacy service in the pharmacy benefit manager (PBM) industry. Medco Health managed 130.3 million prescriptions in total during the quarter. Medco Health processed through its comprehensive member website, www.medcohealth.com, 2.9 million prescriptions in the third quarter, an approximately 52 percent increase over the third quarter 2001. Merck remains fully committed to the establishment of Medco Health as a separate, publicly traded company and intends to complete the separation by July 2003, subject to market conditions. The Internal Revenue Service has issued a favorable ruling recently regarding the initial public offering (IPO) and spin-off of Medco Health Solutions, Inc. Supplemental disclosures for Merck & Co., Inc. on a stand-alone basis (excluding the results of Medco Health's operations) and for Medco Health Solutions, Inc. on a stand-alone basis are on pages 9-12 of this news release. MERCK REMAINS COMFORTABLE WITH 2002 EARNINGS PER SHARE ESTIMATES Merck also announced today that it continues to anticipate earnings per share (EPS) for 2002, on an as-reported basis, to be at the same level as 2001 results. The 2002 as-reported EPS will be affected by the benefit from the implementation of FAS 142 regarding goodwill amortization, most of which relates to Merck's 1993 acquisition of Medco Health. Please see page 13 of this news release for a breakdown of Merck's full-year 2002 financial guidance. - more - 6 Merck also confirmed that it expects its core pharmaceutical business to deliver double-digit earnings-per-share growth in 2003. Investors are invited to listen to a live webcast of Merck's third-quarter earnings conference call today at 9 a.m., Eastern Time, by visiting Merck's corporate website at www.merck.com. The call will be available for replay on the Merck website until Oct. 25, 2002. This quarter, gross and net sales for key products are available on the Merck website. Merck & Co., Inc. is a leading research-driven pharmaceutical products and services company. Merck discovers, develops, manufactures and markets a broad range of innovative products to improve human and animal health, directly and through its joint ventures. Medco Health Solutions, Inc., the nation's largest pharmacy benefits manager, managed over $29 billion in drug spend for its clients in 2001, helping them to control the cost and enhance the quality of prescription drug benefits they offer their 65 million members. This press release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements in this document should be evaluated together with the many uncertainties that affect our businesses, particularly those mentioned in the cautionary statements in Item 1 of our Form 10-K for the year ended Dec. 31, 2001, and in our periodic reports on Form 10-Q and Form 8-K (if any) which we incorporate by reference. - more - 7 The following tables show the financial results for Merck & Co., Inc. and subsidiaries for the quarter and nine months ended Sept. 30, 2002, compared with the corresponding periods of the prior year.
(In Millions Except Earnings per Common Share) Quarter Ended September 30 --------------------------------------------- % 2002 2001 Change ---------- ---------- ------ Sales $ 12,892.9 $ 11,919.6 8% Costs, Expenses and Other Materials and production 8,080.1 7,082.8 14* Marketing and administrative 1,562.7 1,525.3 2 Research and development 676.9 590.3 15 Equity income from affiliates (188.7) (164.1) 15 Other (income) expense, net 70.6 102.2 -31 Income Before Taxes 2,691.3 2,783.1 -3 Taxes on Income 807.3 834.9 Net Income 1,884.0 1,948.2 -3 Basic Earnings per Common Share $0.84 $0.85 -1 Earnings per Common Share Assuming Dilution $0.83 $0.84 -1 Average Shares Outstanding 2,249.9 2,282.9 Average Shares Outstanding Assuming Dilution 2,265.9 2,312.4
*The increase in materials and production costs for the three months ended Sept. 30, 2002, is primarily driven by growth in the Medco Health business. - more - 8
(In Millions Except Earnings per Common Share) 9 Months Ended September 30 --------------------------------------------- % 2002 2001 Change ---------- ---------- ------ Sales $ 37,871.9 $ 35,157.8 8% Costs, Expenses and Other Materials and production 24,353.5 21,334.1 14* Marketing and administrative 4,505.3 4,669.0 -4 Research and development 1,838.4 1,740.0 6 Equity income from affiliates (550.7) (557.8) -1 Other (income) expense, net 211.6 228.4 -7 Income Before Taxes 7,513.8 7,744.1 -3 Taxes on Income 2,254.1 2,323.2 Net Income 5,259.7 5,420.9 -3 Basic Earnings per Common Share $2.33 $2.36 -1 Earnings per Common Share Assuming Dilution $2.31 $2.33 -1 Average Shares Outstanding 2,261.1 2,292.7 Average Shares Outstanding Assuming Dilution 2,281.0 2,329.1
* The increase in materials and production costs for the nine months ended Sept. 30, 2002, is primarily driven by growth in the Medco Health business. - more - 9 SUPPLEMENTAL DISCLOSURE The following tables reflect the stand-alone operating results of Merck & Co., Inc. ("Merck") excluding Medco Health Solutions, Inc. ("Medco Health"), and the stand-alone operating results of Medco Health. The combination of the historical stand-alone operating results of Merck and Medco Health will not equal Merck's consolidated operating results. Certain consolidating adjustments are necessary in the preparation of such consolidated operating results, associated primarily with sales of Merck products by Medco Health and related rebates received by Medco Health from Merck.
Merck & Co., Inc. On a Stand-alone Basis (In Millions) Quarter Ended September 30 ------------------------------------------ % 2002 2001 Change ---- ---- ------ Sales $5,426.1 $5,443.7 --% Costs, Expenses and Other Materials and production 973.2 917.3 6 Marketing and administrative 1,407.6 1,391.1 1 Research and development 676.9 590.3 15 Equity income from affiliates (188.7) (164.1) 15 Other (income) expense, net 46.8 55.1 -15 Income Before Taxes 2,510.3 2,654.0 -5 Taxes on Income 743.0 772.3 Net Income 1,767.3 1,881.7 -6
- more - 10
Merck & Co., Inc. On a Stand-alone Basis (In Millions) 9 Months Ended September 30 ------------------------------------------ % 2002 2001 Change ---- ---- ------ Sales $15,388.1 $15,627.3 -2% Costs, Expenses and Other Materials and production 2,779.5 2,666.1 4 Marketing and administrative 4,113.8 4,279.5 -4 Research and development 1,838.4 1,740.0 6 Equity income from affiliates (550.7) (557.8) -1 Other (income) expense, net 132.0 88.5 49 Income Before Taxes 7,075.1 7,411.0 -5 Taxes on Income 2,094.2 2,156.6 Net Income 4,980.9 5,254.4 -5
- more - 11
Medco Health Solutions, Inc. On a Stand-alone Basis (In Millions) Fiscal Quarter Ended September 28 ------------------------------------------- Sept. 28 Sept. 29 % 2002 2001 Change -------- -------- -------- Product net revenues $7,937.3 $7,045.5 13% Service revenues 102.0 78.8 29 -------- -------- Total net revenues 8,039.3 7,124.3 13 Cost of operations Cost of product net revenues 7,650.7 6,733.3 14 Cost of service revenues 45.5 37.9 20 -------- -------- Total cost of revenues 7,696.2 6,771.2 14 Selling, general and administrative expenses 166.9 146.5 14 Amortization of goodwill -- 26.7 * Amortization of intangibles 21.2 21.2 -- Other (income) expense, net -- (0.7) * -------- -------- Total cost of operations 7,884.3 6,964.9 13 Income before provision for income taxes 155.0 159.4 -3 Provision for income taxes 64.8 80.5 Net income 90.2 78.9 14
Note 1: Included in product net revenues and cost of product net revenues are retail co-payments of approximately $1,533.9 million and $1,362.5 million for the third quarter of 2002 and 2001, respectively. The retail co-payments are recorded as revenue because under Medco Health's contracts with its clients and affiliated retail pharmacies, Medco Health is principally responsible for managing the entire drug transaction, including the co-payment. It is also important to note that for each co-payment included in Medco Health's revenues there is a corresponding offset as a cost of revenues, so net income is not affected by this accounting. Note 2: Included in cost of operations is depreciation of $42.0 million and $32.3 million for the third quarter of 2002 and 2001, respectively. - more - 12
Medco Health Solutions, Inc. On a Stand-alone Basis (In Millions) Fiscal 9 Months Ended September 28 ------------------------------------------- Sept. 28 Sept. 29 % 2002 2001 Change ---------- ---------- ---------- Product net revenues $ 24,132.3 $ 21,129.5 14% Service revenues 286.5 266.0 8 ---------- ---------- Total net revenues 24,418.8 21,395.5 14 Cost of operations Cost of product net revenues 23,351.2 20,305.6 15 Cost of service revenues 127.6 138.8 -8 ---------- ---------- Total cost of revenues 23,478.8 20,444.4 15 Selling, general and administrative expenses 430.7 431.9 -- Amortization of goodwill -- 80.2 * Amortization of intangibles 63.7 63.7 -- Other (income) expense, net 8.4 (3.6) * ---------- ---------- Total cost of operations 23,981.6 21,016.6 14 Income before provision for income taxes 437.2 378.9 15 Provision for income taxes 182.8 191.3 Net income 254.4 187.6 36
Note 1: Included in product net revenues and cost of product net revenues are retail co-payments of approximately $4,814.0 million and $4,081.9 million for the first nine months of 2002 and 2001, respectively. The retail co-payments are recorded as revenue because under Medco Health's contracts with its clients and affiliated retail pharmacies, Medco Health is principally responsible for managing the entire drug transaction, including the co-payment. It is also important to note that for each co-payment included in Medco Health's revenues there is a corresponding offset as a cost of revenues, so net income is not affected by this accounting. Note 2: Included in cost of operations is depreciation of $116.9 million and $98.6 million for the first nine months of 2002 and 2001, respectively. - more - 13 MERCK FINANCIAL GUIDANCE Merck announced that it is increasing the level of detail it provides to investors about its results by reporting sales for its major individual products on a net basis. Therefore, the company is now providing worldwide (WW) net sales guidance for Merck's five key growth drivers. This sales guidance is as follows:
Product 2002 Net Sales ($billions) - ------- -------------------------- ZOCOR $5.6 - 5.8 COXIBS (VIOXX & ARCOXIA) $2.6 - 2.8 COZAAR & HYZAAR $2.1 - 2.3 FOSAMAX $2.0 - 2.2 SINGULAIR $1.4 - 1.6
The new net sales guidance for COXIBS, COZAAR / HYZAAR, and SINGULAIR corresponds on a net basis to the same underlying business fundamentals that supported the company's gross sales guidance figures earlier this year. For ZOCOR and FOSAMAX, the guidance reflects the change to net sales as well as performance improvement seen in those products throughout the year. - - As expected, combined WW net sales of VASOTEC, PEPCID, MEVACOR and PRINIVIL, all of which had U.S. market exclusivity ending between 2000 and 2002, should decline in total to approximately $1.4 to $1.6 billion. - - Under an agreement with AstraZeneca (AZN), Merck receives supply payments at predetermined rates on the U.S. sales of certain products by AZN, most notably PRILOSEC and NEXIUM. The U.S. product patent on PRILOSEC expired in 2001. Accordingly, Merck anticipates that the total supply payments that the company receives from AZN will decline in 2002. This guidance for 2002 has not changed as a result of the recent court decision with respect to AZN's omeprazole patents. - - Marketing and administrative expense for 2002 is estimated to be at the same level as the full year 2001 expense. - - Research and development expense is estimated to be in the range of $2.7 - $2.8 billion in 2002. OTHER P&L COMPONENTS - - Merck's total company 2002 consolidated gross margin is estimated to be 36%. - - The company's 2002 consolidated tax rate is estimated to be approximately 30.0% to 30.5%, which is consistent with the full year 2001 rate of 30.0%. Merck anticipates earnings per share (EPS) for 2002, on an as-reported basis, to be at the same level as 2001 results. The 2002 as-reported EPS will be affected by the benefit from the implementation of FAS 142 regarding goodwill amortization, most of which relates to Merck's 1993 acquisition of Medco. The company expects its core pharmaceutical business to deliver double-digit earnings-per-share growth in 2003. # # # EX-99.B 4 y64598exv99wb.txt CERTAIN SUPPLEMENTAL INFORMATION Exhibit 99(b) MERCK & CO., INC. GROSS PRODUCT SALES DETAIL
3Q `02 vs. 3Q `01 -------------------------------------------------------- TOTAL TOTAL U.S. U.S. FOREIGN FOREIGN PRODUCT % CHG $ % CHG $ % CHG $ - -------------------- ----- ----- ---- ---- ------- ------- VIOXX 2% $ 810 -4% $ 600 24% $210 ARCOXIA N/M 10 N/M -- N/M 10 VASOTEC / VASERETIC -24% 185 N/M (10) -9% 195 PRINIVIL / PRINZIDE -38% 165 -43% 140 25% 25 COZAAR / HYZAAR 8% 585 -5% 260 23% 325 MEVACOR -50% 55 -56% 40 -25% 15 ZOCOR 11% 1,925 6% 1,340 24% 585 AGGRASTAT 0% 25 0% 15 N/M 10 SINGULAIR 9% 380 0% 270 38% 110 MAXALT 36% 95 25% 75 100% 20 PROPECIA 0% 55 20% 30 -17% 25 PROSCAR 18% 165 36% 95 0% 70 PRIMAXIN 11% 155 38% 55 0% 100 INVANZ N/M 5 N/M -- N/M 5 CANCIDAS N/M 30 N/M 20 N/M 10 PEPCID -57% 15 -75% 5 -33% 10 FOSAMAX 11% 500 -2% 315 42% 185 CRIXIVAN/STOCRIN -39% 70 -69% 20 0% 50 TIMOPTIC/TIMOPTIC XE -20% 40 -67% 5 0% 35 TRUSOPT/COSOPT 15% 115 22% 55 9% 60 HEPATITIS VACCINES -15% 85 -22% 70 50% 15 VIRAL VACCINES -9% 145 -7% 140 -50% 5 OTHER VACCINES N/M 55 N/M 45 N/M 10
NOTE: Product sales rounded to the nearest $5 million. N / M - Not Meaningful Exhibit 99(b) MERCK & CO., INC. GROSS PRODUCT SALES DETAIL
9 MONTHS 2002 OVER 2001 ------------------------------------------------------------------ TOTAL TOTAL U.S. U.S. FOREIGN FOREIGN PRODUCT % CHG $ % CHG $ % CHG $ - ---------------------- ----- ----- ---- ---- ------- ------- VIOXX 15% $2,305 12% $1,715 24% $ 590 ARCOXIA N/M 20 N/M -- N/M 20 VASOTEC / VASERETIC -28% 580 N/M -- -16% 580 PRINIVIL / PRINZIDE -12% 830 -12% 765 -7% 65 COZAAR / HYZAAR 12% 1,610 16% 740 9% 870 MEVACOR -51% 190 -56% 145 -25% 45 ZOCOR 12% 5,155 11% 3,555 12% 1,600 AGGRASTAT -6% 80 -27% 40 33% 40 SINGULAIR 7% 1,100 1% 805 31% 295 MAXALT 15% 235 9% 180 38% 55 PROPECIA -3% 155 -12% 75 7% 80 PROSCAR 0% 410 0% 210 0% 200 PRIMAXIN -2% 430 4% 135 -5% 295 INVANZ N/M 10 N/M 5 N/M 5 CANCIDAS N/M 70 N/M 45 N/M 25 PEPCID -86% 45 -93% 20 -50% 25 FOSAMAX 32% 1,700 30% 1,220 37% 480 CRIXIVAN/STOCRIN -33% 225 -43% 85 -24% 140 TIMOPTIC/TIMOPTIC XE -24% 125 -56% 20 -13% 105 TRUSOPT/COSOPT 8% 325 7% 155 10% 170 HEPATITIS VACCINES -17% 225 -18% 200 0% 25 VIRAL VACCINES 4% 440 8% 425 -50% 15 OTHER VACCINES N/M 95 N/M 65 N/M 30
NOTE: Product sales rounded to the nearest $5 million. N / M - Not Meaningful Exhibit 99(b) MERCK & CO., INC. NET PRODUCT SALES DETAIL
3Q `02 vs. 3Q `01 ----------------------------------------------------------------- TOTAL TOTAL U.S. U.S. FOREIGN FOREIGN PRODUCT % CHG $ % CHG $ % CHG $ - -------------------- ----- ----- ---- ---- ------- ------- VIOXX 3% $ 755 -3% $ 545 24% $ 210 ARCOXIA N/M 10 N/M -- N/M 10 VASOTEC / VASERETIC -24% 185 N/M (10) -9% 195 PRINIVIL / PRINZIDE -24% 80 -35% 55 25% 25 COZAAR / HYZAAR 8% 550 -8% 225 23% 325 MEVACOR -33% 30 -40% 15 -25% 15 ZOCOR 9% 1,470 1% 885 24% 585 AGGRASTAT -20% 20 -33% 10 N/M 10 SINGULAIR 11% 350 2% 240 38% 110 MAXALT 23% 80 9% 60 N/M 20 PROPECIA 0% 55 20% 30 -17% 25 PROSCAR 19% 155 42% 85 0% 70 PRIMAXIN 11% 150 43% 50 0% 100 INVANZ N/M 5 N/M -- N/M 5 CANCIDAS N/M 30 N/M 20 N/M 10 PEPCID -50% 10 -100% -- -33% 10 FOSAMAX 9% 455 -5% 270 37% 185 CRIXIVAN/STOCRIN -41% 65 -75% 15 0% 50 TIMOPTIC/TIMOPTIC XE -20% 40 -67% 5 0% 35 TRUSOPT/COSOPT 11% 105 13% 45 9% 60 HEPATITIS VACCINES -7% 65 -17% 50 N/M 15 VIRAL VACCINES -6% 145 -3% 140 N/M 5 OTHER VACCINES N/M 80 N/M 70 N/M 10
NOTE: Product sales rounded to the nearest $5 million. N / M - Not Meaningful Exhibit 99(b) MERCK & CO., INC. NET PRODUCT SALES DETAIL
9 MONTHS 2002 OVER 2001 ----------------------------------------------------------------- TOTAL TOTAL U.S. U.S. FOREIGN FOREIGN PRODUCT % CHG $ % CHG $ % CHG $ - ------------------- ----- ----- ---- ---- ------- ------- VIOXX 17% $2,145 14% $1,555 24% $ 590 ARCOXIA N/M 20 N/M -- N/M 20 VASOTEC / VASERETIC -27% 580 -100% -- -16% 580 PRINIVIL / PRINZIDE -12% 470 -13% 405 -7% 65 COZAAR / HYZAAR 10% 1,505 11% 635 9% 870 MEVACOR -58% 90 -71% 45 -25% 45 ZOCOR 8% 3,840 5% 2,240 12% 1,600 AGGRASTAT -6% 75 -30% 35 33% 40 SINGULAIR 5% 995 -3% 700 31% 295 MAXALT 14% 205 7% 150 38% 55 PROPECIA -3% 155 -12% 75 7% 80 PROSCAR -3% 385 -5% 185 0% 200 PRIMAXIN -5% 410 -4% 115 -5% 295 INVANZ N/M 10 N/M 5 N/M 5 CANCIDAS N/M 65 N/M 40 N/M 25 PEPCID -85% 40 -93% 15 -50% 25 FOSAMAX 29% 1,555 26% 1,075 35% 480 CRIXIVAN/STOCRIN -33% 215 -44% 75 -24% 140 TIMOPTIC/TIMOPTIC XE -22% 125 -50% 20 -13% 105 TRUSOPT/COSOPT 5% 305 0% 135 10% 170 HEPATITIS VACCINES -19% 170 -22% 145 0% 25 VIRAL VACCINES 4% 430 8% 415 N/M 15 OTHER VACCINES N/M 165 N/M 135 N/M 30
NOTE: Product sales rounded to the nearest $5 million. N / M - Not Meaningful Exhibit 99(b) MERCK & CO., INC. CONSOLIDATED THIRD QUARTER
3Q `02 3Q `01 % CHG. ------ ------ ------ TOTAL SALES $ 12,892.9 $ 11,919.6 8% ---------- ---------- TOTAL COSTS, EXPENSES, & OTHER $ 10,201.6 $ 9,136.5 ---------- ---------- Materials & Production 8,080.1 7,082.8 Marketing & Administrative 1,562.7 1,525.3 Research & Development 676.9 590.3 Equity Income From Affiliates (188.7) (164.1) Other (Income)/Expense, Net 70.6 102.2 PRE-TAX INCOME $ 2,691.3 $ 2,783.1 TAXES $ 807.3 $ 834.9 TAX RATE 30.0% 30.0% NET INCOME $ 1,884.0 $ 1,948.2 -3% EPS - ASSUMING DILUTION $ 0.83 $ 0.84 -1% AVG. # SHARES - ASSUMING DILUTION 2,265.9 2,312.4
3Q `02 % CHG. VOL PX FX ------- ------- ---- ---- ---- TOTAL SALES $12,890 8% 0 7 1 ------- ---- ---- ---- ---- Total Pharmaceutical Sales 5,515 1% -2 2 1 ------- ---- ---- ---- ---- U.S. 3,390 -6% -12 6 0 Foreign 2,125 14% 14 -3 3 Other Medco Sales 7,375 14%
Exhibit 99(b) MERCK & CO., INC. CONSOLIDATED NINE MONTHS YEAR TO DATE
2002 2001 % CHG. ---------- ---------- ---------- TOTAL SALES $ 37,871.9 $ 35,157.8 8% ---------- ---------- TOTAL COSTS, EXPENSES, & OTHER $ 30,358.1 $ 27,413.7 ---------- ---------- Materials & Production 24,353.5 21,334.1 Marketing & Administrative 4,505.3 4,669.0 Research & Development 1,838.4 1,740.0 Equity Income From Affiliates (550.7) (557.8) Other (Income)/Expense, Net 211.6 228.4 PRE-TAX INCOME $ 7,513.8 $ 7,744.1 TAXES $ 2,254.1 $ 2,323.2 TAX RATE 30.0% 30.0% NET INCOME $ 5,259.7 $ 5,420.9 -3% EPS - ASSUMING DILUTION $ 2.31 $ 2.33 -1% AVG. # SHARES - ASSUMING DILUTION 2,281.0 2,329.1
2002 % CHG. VOL PX FX ------- ----- ---- ---- ---- TOTAL SALES $37,870 8% 2 6 0 ------- ---- ---- ---- ---- Total Pharmaceutical Sales 15,570 -1% 0 0 -1 ------- ---- ---- ---- ---- U.S. 9,690 -4% -6 2 0 Foreign 5,880 4% 9 -2 -3 Other Medco Sales 22,300 15%
Exhibit 99(b) MERCK & CO., INC. OTHER FINANCIAL DISCLOSURES THIRD QUARTER 2002 ================================================================================ OTHER (INCOME)/EXPENSE, NET
3Q `02 3Q `01 YTD 2002 YTD 2001 ------ ------ -------- -------- INTEREST INCOME $(107.3) $(114.6) $(311.2) $(380.3) INTEREST EXPENSE 99.9 121.8 292.7 355.2 EXCHANGE (GAINS)/LOSSES 8.3 1.5 10.9 (18.6) MINORITY INTERESTS 59.1 72.3 169.7 218.3 AMORTIZATION OF GOODWILL AND INTANGIBLES 51.1 83.7 153.5 244.8 Other, net (40.5) (62.5) (104.0) (191.0) ------- ------- ------- ------- TOTAL $ 70.6 $ 102.2 $ 211.6 $ 228.4 ------- ------- ------- -------
================================================================================ JOINT VENTURE SALES DETAIL All sales reported here are end-market JV sales, presented on a "NET" basis, rounded to the nearest $5 million.
MERIAL 3Q `02 3Q `01 YTD 2002 YTD 2001 - ------ ------ ------ -------- -------- IVOMEC, HEARTGARD, other avermectins $130 $130 $ 350 $ 365 FRONTLINE 150 100 410 340 Biologicals 90 85 275 255 Other Animal Health 40 45 130 145 Poultry Genetics 55 50 165 155 ---- ---- ------ ------ TOTAL MERIAL SALES $465 $410 $1,330 $1,260 ---- ---- ------ ------
AVENTIS PASTEUR-MSD 3Q `02 3Q `01 YTD 2002 YTD 2001 - ------ ------ ------ -------- -------- HEPATITIS VACCINES $ 20 $ 20 $ 50 $ 70 VIRAL VACCINES 10 10 25 35 Other Vaccines 175 125 325 265 ---- ---- ------ ------ TOTAL AP-MSD SALES $205 $155 $ 400 $ 370 ---- ---- ------ ------
================================================================================ TOTAL MEDCO PRESCRIPTION/CLAIMS VOLUME (IN MILLIONS)
2002 MAIL RETAIL TOTAL ---- ------ ----- FIRST QUARTER 20 121 141 SECOND QUARTER 21 119 140 THIRD QUARTER 20 110 130 ---- ---- ---- YEAR TO DATE 61 350 411 ---- ---- ----
2001 MAIL RETAIL TOTAL ---- ------ ----- FIRST QUARTER 18 120 138 SECOND QUARTER 18 115 133 THIRD QUARTER 19 110 129 ---- ---- ---- YEAR TO DATE 55 345 400 ---- ---- ----
-----END PRIVACY-ENHANCED MESSAGE-----