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Merck

Published on 02/04/15 at 11:34am

2014 turnover: $42.2 billion

Biggest drug: Diabetes pill Januvia (sitagliptin), which had sales of $6 billion in 2014

Originally founded in Darmstadt, Germany in 1668, Merck is the oldest pharmaceutical company in the world. It has a curious recent past, however. The firm’s American assets were seized by the US government during World War I with the two countries on opposing sides of the conflict. This lead to the complete separation of Merck & Co from the original Merck KGaA, and the two companies have remained distinct ever since.

Merck has a wide-ranging portfolio, although in 2014 it offloaded its OTC repertoire to German drugmaker Bayer in a deal worth $14 billion. Chief executive Kenneth Frazier described it as a back-to-basics move, which will allow the firm to concentrate on biopharmaceuticals. Year-on-year drops in total annual revenue since 2011 suggest that it was also a shrewd exercise in loss-cutting. 

The company saw sales of $9.4 billion in the fourth quarter of 2014, a decrease of 4% from 2013, reflecting approximately $200 million of lower sales from patent expiries and product divestitures. Poor sales of Zetia (ezetimibe), Vytorin (ezetimibe/simvastatin), Victrelis (boceprevir), Pegintron (peginterferon alfa-2b) and Remicade (infliximab) also contributed to the decline. Overall pharmaceutical sales for the year were down 2% to $36 billion.

Frazier says the company will focus on innovation and partnerships to drive ‘sustainable, long-term growth’.

“Our results in 2014 demonstrate the significant progress we’ve made in evolving the company to better serve healthcare markets around the world. As we look forward to 2015 and beyond, we will continue to focus our resources on those internal and external opportunities that can generate the most value for patients, customers and shareholders.”

In 2015 the company is planning for a slight growth in sales to between $38.3 billion and $39.8 billion, including approximately $1 billion of net lost sales from acquisitions and divestitures.

At the beginning of the year, its skin cancer treatment Keytruda (pembrolizumab) became the first drug to be approved through the UK’s new Early Access to Medicines Scheme (EAMS), its Ebola vaccine showed promising trial results, and it announced a $450 million drug development deal with biotech firm NGM Pharmaceuticals.

Pipeline for Merck 

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