Merck Executing on Strategy to Position Company for Long-Term Sustainable Growth
- Reaffirms commitment to scientific innovation
- Highlights strong pipeline with near-term catalysts in 2012 and 2013
- Expresses confidence in near-term and long-term prospects
- Increases quarterly dividend 11 percent to $0.42 per common share
WHITEHOUSE STATION, N.J., Nov. 10, 2011 - Merck (NYSE: MRK), known as MSD outside the United States and Canada, today is holding its R&D and Business Briefing at its global headquarters, highlighting the company's research strategy, including candidates from its R&D pipeline, and providing an update on its plans for growth.
"Early in the year, we said 2011 would be all about executing our growth plans," said Kenneth C. Frazier, president and chief executive officer, "and there can be no mistaking that Merck is doing just that. We are implementing a four-part strategy to drive top-line and bottom-line performance with the aim of realizing superior shareholder returns over the longer term.
"We are focused on making the right investment decisions across our business while continuing to advance and augment our late-stage pipeline. Fundamentally, Merck is about translating cutting-edge science into medically important medicines and vaccines that save, extend and improve lives throughout the world. Our strategy is based on innovation being the single biggest driver of value over the long term for patients, customers and shareholders."
2011 - A Year of Accelerated Growth and Execution
As Merck entered 2011, the company focused on accelerating top-line growth, reducing costs, allocating resources to drive growth and advancing and augmenting its pipeline.
"Three consecutive quarters of top- and bottom-line growth, coupled with strong expense management, demonstrate Merck's ability to consistently perform, while at the same time make the strategic investments necessary for the future," said Frazier. For example:
- Through September 30, 2011, Merck delivered 5 percent top-line growth, increasing sales by nearly $2 billion.
- Merck grew its non-GAAP EPS by 10 percent year to date, even after reinvesting more than $500 million in growth opportunities and new product launches.
- Since the merger with Schering-Plough, Merck achieved $2.8 billion in net synergies.
Thus far in 2011, Merck has received approval for five new drugs and has filed for approval on five more. Additionally year to date, Merck signed more than 30 agreements with a broad array of partners, many of which strengthen the company's presence in emerging markets.
"As we continue to implement our growth strategy, our aspiration for next year is to advance an innovative R&D pipeline, deliver strong operating performance to maintain sales at or near the full-year 2011 level and continue reducing our costs to deliver a leveraged P&L."
Merck intends to achieve long-term, sustainable growth by delivering on its four-part strategy for creating shareholder value. Key elements of the company's strategic plan are as follows:
- Execute plans to optimize its core business, including maximizing the growth of in-line products, launching new drugs and driving return on investment across the R&D portfolio.
- Grow in key markets around the world by building capabilities and executing partnerships to succeed, especially in emerging markets.
- Extend the company's opportunities in its Animal Health and Consumer Care businesses.
- Excel in managing costs to invest in smart growth opportunities that will increase shareholder return.
Merck Increases Quarterly Dividend
"Looking to 2012, we are confident that we are taking the right steps to ensure that Merck is generating profitable sales growth to drive improved returns and even greater cash flow than we do today," said Frazier. "Reflecting confidence in our business and our commitment to returning cash to shareholders, today the Merck Board of Directors raised the company's quarterly dividend by 11 percent."
Merck's quarterly dividend is being increased $0.04 from $0.38 per outstanding share of the company's common stock to $0.42 per common share. The Board declared that the new dividend is payable January 9, 2012 to stockholders of record at the close of business on December 15, 2011.
Since the beginning of 2010, Merck has returned over $9 billion to shareholders in the form of dividends and repurchased about $3 billion of Merck stock.
Additional information about Merck's R&D and Business Briefing can be found on www.merck.com.
Today's Merck is a global healthcare leader working to help the world be well. Merck is known as MSD outside the United States and Canada. Through our prescription medicines, vaccines, biologic therapies, and consumer care and animal health 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 healthcare through far-reaching policies, programs and partnerships. For more information, visit www.merck.com and connect with us on Twitter, Facebook and YouTube.
This news release includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, statements about the benefits of the merger between Merck and Schering-Plough, including future financial and operating results, the combined company's plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of Merck's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.
The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the possibility that the expected synergies from the merger of Merck and Schering-Plough will not be realized, or will not be realized within the expected time period; the impact of pharmaceutical industry regulation and health care legislation; the risk that the businesses will not be integrated successfully; disruption from the merger making it more difficult to maintain business and operational relationships; Merck's ability to accurately predict future market conditions; dependence on the effectiveness of Merck's patents and other protections for innovative products; the risk of new and changing regulation and health policies in the U.S. and internationally and the exposure to litigation and/or regulatory actions.
Merck undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in Merck's 2010 Annual Report on Form 10-K and the company's other filings with the Securities and Exchange Commission (SEC) available at the SEC's Internet site (www.sec.gov).