Merck & Co., Inc 8-K, filed Feb 5, 2020

Merck & Co., Inc. (MRK)

8-K 2020-02-05 For: 2020-02-05

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Added on April 02, 2026

About this 8-K

Merck & Co., Inc filed this 8-K on February 5, 2020.

Items reported

Item 2.02: Financial results
Item 8.01: Other events
Item 9.01: Financial statements and exhibits

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¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Title of each class	Trading Symbol(s)	Name of each exchange on which registered

Common Stock ($0.50 par value)	MRK	New York Stock Exchange
1.125% Notes due 2021	MRK/21	New York Stock Exchange
0.500% Notes due 2024	MRK 24	New York Stock Exchange
1.875% Notes due 2026	MRK/26	New York Stock Exchange
2.500% Notes due 2034	MRK/34	New York Stock Exchange
1.375% Notes due 2036	MRK 36A	New York Stock Exchange

	Exhibit 99.1	Press release issued February 5, 2020, regarding earnings for the fourth quarter and year end of 2019

	Exhibit 99.2	Certain supplemental information not included in the press release

	Exhibit 99.3	Press release issued February 5, 2020, regarding the spin-off of certain products into a new, independent, publicly-traded company

	Exhibit 104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

	Merck & Co., Inc.

Date: February 5, 2020	By:	/s/ Faye C. Brown
		FAYE C. BROWN
		Senior Assistant Secretary

Media Contacts:	Jennifer Mauer	Investor Contacts:	Peter Dannenbaum
	(908) 740-1801		(908) 740-1037

	Pamela Eisele		Michael DeCarbo
	(267) 305-3558		(908) 740-1807

	Fourth Quarter										Year Ended
$ in millions, except EPS amounts	2019		2018		Change			Change Ex-Exchange			Dec. 31, 2019		Dec. 31, 2018		Change			Change Ex-Exchange
Sales	$	11,868	$	10,998		8	%		9	%	$	46,840	$	42,294		11	%		13	%
GAAP net income¹		2,357		1,827		29	%		29	%		9,843		6,220		58	%		61	%
Non-GAAP net income that excludes certain items^1,2*		2,978		2,745		8	%		8	%		13,382		11,621		15	%		16	%
GAAP EPS		0.92		0.69		33	%		32	%		3.81		2.32		64	%		67	%
Non-GAAP EPS that excludes certain items^2*		1.16		1.04		12	%		12	%		5.19		4.34		20	%		21	%

	o	Approval in the United States by the Food and Drug Administration (FDA) as monotherapy for the treatment of certain patients with high-risk, non-muscle invasive bladder cancer (NMIBC) based on the KEYNOTE-057 trial;
	o	Approval in Japan for three new first-line indications across advanced renal cell carcinoma (RCC) based on the KEYNOTE-426 trial and recurrent or distant metastatic head and neck cancer based on the KEYNOTE-048 trial;
	o	Approval in China for first-line treatment of metastatic squamous non-small cell lung cancer (NSCLC) in combination with chemotherapy based on the KEYNOTE-407 trial; and

	Fourth Quarter										Year Ended
$ in millions	2019		2018		Change			Change Ex-Exchange			Dec. 31, 2019		Dec. 31, 2018		Change			Change Ex-Exchange
Total Sales	$	11,868	$	10,998		8	%		9	%	$	46,840	$	42,294		11	%		13	%
Pharmaceutical		10,533		9,830		7	%		8	%		41,751		37,689		11	%		14	%
KEYTRUDA		3,111		2,151		45	%		46	%		11,084		7,171		55	%		58	%
JANUVIA / JANUMET		1,418		1,465		-3	%		-2	%		5,524		5,914		-7	%		-4	%
GARDASIL / GARDASIL 9		693		835		-17	%		-16	%		3,737		3,151		19	%		21	%
PROQUAD, M-M-R II and VARIVAX		481		455		6	%		7	%		2,275		1,798		27	%		28	%
PNEUMOVAX 23		334		322		4	%		4	%		926		907		2	%		3	%
BRIDION		313		256		22	%		24	%		1,131		917		23	%		26	%
ROTATEQ		227		188		21	%		21	%		791		728		9	%		10	%
ISENTRESS / ISENTRESS HD		223		280		-20	%		-18	%		975		1,140		-15	%		-10	%
IMPLANON / NEXPLANON		206		169		22	%		23	%		787		703		12	%		14	%
SIMPONI		205		220		-7	%		-3	%		830		893		-7	%		-2	%
Animal Health		1,122		1,036		8	%		10	%		4,393		4,212		4	%		9	%
Livestock		777		684		14	%		16	%		2,784		2,630		6	%		11	%
Companion Animals		345		352		-2	%		0	%		1,609		1,582		2	%		5	%
Other Revenues		213		132		61	%		30	%		696		393		77	%		-26	%

$ in millions	GAAP			Acquisition- and Divestiture- Related Costs⁴			Restructuring Costs		Certain Other Items			Non-GAAP²
Fourth-Quarter 2019
Cost of sales	$	3,669		$	325		$	90	$	-		$	3,254
Selling, general and administrative		2,888			44			1		-			2,843
Research and development		2,548			166			-		11			2,371
Restructuring costs		194			-			194		-			-
Other (income) expense, net		(223	)		(37	)		-		7			(193	)

Fourth-Quarter 2018
Cost of sales	$	3,289		$	525		$	10	$	3		$	2,751
Selling, general and administrative		2,643			6			1		-			2,636
Research and development		2,214			91			1		-			2,122
Restructuring costs		138			-			138		-			-
Other (income) expense, net		110			179			–		(3	)		(66	)

$ in millions	GAAP			Acquisition- and Divestiture- Related Costs⁴		Restructuring Costs		Certain Other Items			Non-GAAP²
Year Ended Dec. 31, 2019
Cost of sales	$	14,112		$	2,126	$	251	$	-		$	11,735
Selling, general and administrative		10,615			126		34		-			10,455
Research and development		9,872			145		4		993			8,730
Restructuring costs		638			-		638		-			-
Other (income) expense, net		139			284		-		55			(200	)

Year Ended Dec. 31, 2018
Cost of sales	$	13,509		$	2,672	$	21	$	423		$	10,393
Selling, general and administrative		10,102			32		3		-			10,067
Research and development		9,752			98		2		1,744			7,908
Restructuring costs		632			-		632		-			-
Other (income) expense, net		(402	)		264		-		(57	)		(609	)

	GAAP	Non-GAAP²
Revenue	$48.8 to $50.3 billion	$48.8 to $50.3 billion*
Operating expenses	Slightly lower than 2019	Higher than 2019 by a low-single-digit rate
Effective tax rate	17% to 18%	17.5% to 18.5%
EPS**	$4.57 to $4.72	$5.62 to $5.77

$ in millions, except EPS amounts	Full-Year 2020
GAAP EPS		$4.57 to $4.72
Difference⁵		1.05
Non-GAAP EPS that excludes items listed below²		$5.62 to $5.77

Acquisition- and divestiture-related costs	$	2,500
Restructuring costs		800
Net decrease (increase) in income before taxes		3,300
Estimated income tax (benefit) expense		(640	)
Decrease (increase) in net income	$	2,660

	GAAP									GAAP
	4Q19			4Q18			% Change			Full Year 2019			Full Year 2018			% Change
Sales	$	11,868		$	10,998			8	%	$	46,840		$	42,294			11	%

Costs, Expenses and Other
Cost of sales ⁽¹⁾		3,669			3,289			12	%		14,112			13,509			4	%
Selling, general and administrative ⁽¹⁾		2,888			2,643			9	%		10,615			10,102			5	%
Research and development ⁽¹⁾⁽²⁾		2,548			2,214			15	%		9,872			9,752			1	%
Restructuring costs ⁽³⁾		194			138			41	%		638			632			1	%
Other (income) expense, net ⁽¹⁾		(223	)		110			*			139			(402	)		*
Income Before Taxes		2,792			2,604			7	%		11,464			8,701			32	%
Taxes on Income ⁽¹⁾		428			826						1,687			2,508
Net Income		2,364			1,778			33	%		9,777			6,193			58	%
Less: Net Income (Loss) Attributable to Noncontrolling Interests ⁽¹⁾		7			(49	)					(66	)		(27	)
Net Income Attributable to Merck & Co., Inc.	$	2,357		$	1,827			29	%	$	9,843		$	6,220			58	%
Earnings per Common Share Assuming Dilution	$	0.92		$	0.69			33	%	$	3.81		$	2.32			64	%

Average Shares Outstanding Assuming Dilution		2,559			2,634						2,580			2,679
Tax Rate ⁽⁴⁾		15.3	%		31.7	%					14.7	%		28.8	%

	GAAP			Acquisition and Divestiture-Related Costs ⁽¹⁾			Restructuring Costs ⁽²⁾			Certain Other Items			Adjustment Subtotal			Non-GAAP
Cost of sales	$	3,669			325			90						415		$	3,254
Selling, general and administrative		2,888			44			1						45			2,843
Research and development		2,548			166						11			177			2,371
Restructuring costs		194						194						194			-
Other (income) expense, net		(223	)		(37	)					7			(30	)		(193	)
Income Before Taxes		2,792			(498	)		(285	)		(18	)		(801	)		3,593
Income Tax Provision (Benefit)		428			(55	)⁽³⁾		(49	)⁽³⁾		(76	)⁽⁴⁾		(180	)		608
Net Income		2,364			(443	)		(236	)		58			(621	)		2,985
Net Income Attributable to Merck & Co., Inc.		2,357			(443	)		(236	)		58			(621	)		2,978
Earnings per Common Share Assuming Dilution	$	0.92			(0.17	)		(0.09	)		0.02			(0.24	)	$	1.16

Tax Rate		15.3	%														16.9	%

		2019										2018									4Q			Full Year
		1Q		2Q		3Q		4Q		Full Year		1Q		2Q		3Q		4Q		Full Year		Nom %	Ex-Exch %	Nom %	Ex-Exch %
TOTAL SALES ⁽¹⁾	$	10,816	$	11,760	$	12,397	$	11,868	$	46,840	$	10,037	$	10,465	$	10,794	$	10,998	$	42,294		8	9	11	13
PHARMACEUTICAL		9,663		10,460		11,095		10,533		41,751		8,919		9,282		9,658		9,830		37,689		7	8	11	14
Oncology
Keytruda		2,269		2,634		3,070		3,111		11,084		1,464		1,667		1,889		2,151		7,171		45	46	55	58
Alliance Revenue – Lynparza ⁽²⁾		79		111		123		132		444		33		44		49		62		187		111	112	137	141
Alliance Revenue – Lenvima ⁽²⁾		74		97		109		124		404		0		35		43		71		149		74	73	171	173
Emend		117		121		98		53		388		125		148		123		126		522		-58	-58	-26	-24
Vaccines ⁽³⁾
Gardasil / Gardasil 9		838		886		1,320		693		3,737		660		608		1,048		835		3,151		-17	-16	19	21
ProQuad / M-M-R II / Varivax		496		675		623		481		2,275		392		426		525		455		1,798		6	7	27	28
Pneumovax 23		185		170		237		334		926		179		193		214		322		907		4	4	2	3
RotaTeq		211		172		180		227		791		193		156		191		188		728		21	21	9	10
Vaqta		47		58		62		71		238		37		65		66		72		239		-2	-1	0	2
Hospital Acute Care
Bridion		255		278		284		313		1,131		204		240		217		256		917		22	24	23	26
Noxafil		190		193		177		103		662		176		188		188		191		742		-46	-44	-11	-7
Primaxin		59		71		77		67		273		72		68		72		53		265		25	27	3	7
Invanz		72		78		57		57		263		151		149		137		59		496		-5	-2	-47	-44
Cubicin		88		67		52		50		257		98		94		95		80		367		-38	-37	-30	-28
Cancidas		61		67		62		58		249		91		87		79		69		326		-17	-15	-24	-20
Immunology
Simponi		208		214		203		205		830		231		233		210		220		893		-7	-3	-7	-2
Remicade		123		98		101		89		411		167		157		135		123		582		-27	-25	-29	-25
Neuroscience
Belsomra		67		76		80		83		306		54		71		66		69		260		19	16	18	17
Virology
Isentress / Isentress HD		255		247		250		223		975		281		305		275		280		1,140		-20	-18	-15	-10
Zepatier		114		108		83		66		370		131		113		104		108		455		-38	-38	-19	-16
Cardiovascular
Zetia		140		156		147		146		590		305		226		165		162		857		-9	-11	-31	-30
Vytorin		97		76		57		54		285		167		155		92		83		497		-35	-33	-43	-40
Atozet		94		92		97		108		391		73		101		84		89		347		22	26	13	18
Adempas		90		104		107		117		419		68		75		94		91		329		28	29	27	30
Diabetes ⁽⁴⁾
Januvia		824		908		807		943		3,482		880		949		927		930		3,686		1	2	-6	-4
Janumet		530		533		503		475		2,041		544		585		563		535		2,228		-11	-9	-8	-5
Women's Health
NuvaRing		219		240		241		179		879		216		236		234		216		902		-17	-17	-3	-2
Implanon / Nexplanon		199		183		199		206		787		174		174		186		169		703		22	23	12	14
Diversified Brands
Singulair		191		160		152		195		698		175		185		161		187		708		4	5	-1	1
Cozaar / Hyzaar		103		109		116		113		442		120		125		103		105		453		8	9	-3	2
Nasonex		96		72		58		67		293		122		81		71		102		376		-34	-34	-22	-19
Arcoxia		75		75		72		67		288		83		84		83		86		335		-23	-22	-14	-10
Follistim AQ		57		63		62		58		241		67		70		60		70		268		-16	-15	-10	-7
Other Pharmaceutical ⁽⁵⁾		1,140		1,268		1,229		1,265		4,901		1,186		1,189		1,109		1,215		4,705		4	6	4	7

ANIMAL HEALTH		1,025		1,124		1,122		1,122		4,393		1,065		1,090		1,021		1,036		4,212		8	10	4	9
Livestock		611		671		726		777		2,784		652		633		660		684		2,630		14	16	6	11
Companion Animals		414		453		396		345		1,609		413		457		361		352		1,582		-2	0	2	5

Other Revenues ⁽⁶⁾		128		176		180		213		696		53		93		115		132		393		61	30	77	-26

	News Release

	Global						U.S.							International
	4Q 2019		4Q 2018		% Change		4Q 2019		4Q 2018			% Change		4Q 2019		4Q 2018		% Change
TOTAL SALES ⁽¹⁾	$	11,868	$	10,998		8	$	5,142	$	4,787			7	$	6,726	$	6,211		8
PHARMACEUTICAL		10,533		9,830		7		4,694		4,402			7		5,839		5,427		8
Oncology
Keytruda		3,111		2,151		45		1,780		1,243			43		1,331		907		47
Alliance Revenue - Lynparza ⁽²⁾		132		62		111		82		39			113		49		24		107
Alliance Revenue - Lenvima ⁽²⁾		124		71		74		70		46			53		53		25		111
Emend		53		126		-58		10		73			-86		42		53		-21
Vaccines ⁽³⁾
Gardasil / Gardasil 9		693		835		-17		252		450			-44		441		384		15
ProQuad / M-M-R II / Varivax		481		455		6		358		333			8		123		122		1
Pneumovax 23		334		322		4		251		232			8		83		89		-7
RotaTeq		227		188		21		146		112			30		81		76		7
Vaqta		71		72		-2		28		32			-13		43		40		8
Hospital Acute Care
Bridion		313		256		22		152		114			33		162		142		14
Noxafil		103		191		-46		14		96			-85		89		95		-7
Primaxin		67		53		25				1			-168		67		52		28
Cancidas		58		69		-17		2		2			-21		56		67		-17
Invanz		57		59		-5				1			-102		57		58		-3
Cubicin		50		80		-38		13		41			-67		36		39		-8
Immunology
Simponi		205		220		-7									205		220		-7
Remicade		89		123		-27									89		123		-27
Neuroscience
Belsomra		83		69		19		24		20			18		59		49		20
Virology
Isentress / Isentress HD		223		280		-20		95		130			-27		128		150		-15
Zepatier		66		108		-38		23					*		44		108		-60
Cardiovascular
Zetia		146		162		-9		3		11			-73		144		151		-5
Vytorin		54		83		-35		4		(1	)		*		49		84		-41
Atozet		108		89		22									108		89		22
Adempas		117		91		28									117		91		28
Diabetes ⁽⁴⁾
Januvia		943		930		1		502		503					441		427		3
Janumet		475		535		-11		127		185			-31		348		350		-1
Women's Health
Implanon / Nexplanon		206		169		22		147		120			22		59		48		21
NuvaRing		179		216		-17		150		171			-13		29		45		-35
Diversified Brands
Singulair		195		187		4		5		4			14		190		183		4
Cozaar / Hyzaar		113		105		8		8		4			83		105		101		4
Nasonex		67		102		-34		7		15			-53		60		87		-31
Arcoxia		67		86		-23									67		86		-23
Follistim AQ		58		70		-16		22		33			-32		36		37		-3
Other Pharmaceutical ⁽⁵⁾		1,265		1,215		4		419		392			7		848		825		3

ANIMAL HEALTH		1,122		1,036		8		341		314			9		781		722		8
Livestock		777		684		14		177		144			23		600		540		11
Companion Animals		345		352		-2		164		170			-3		181		183		-1

Other Revenues ⁽⁶⁾		213		132		61		107		71			51		106		62		72

		4Q19			4Q18			Full Year 2019			Full Year 2018
Interest income	$	(50	)	$	(86	)	$	(274	)	$	(343	)
Interest expense		220			203			893			772
Exchange losses		21			25			187			145
(Income) loss from investments in equity securities, net ⁽¹⁾		(119	)		52			(170	)		(324	)
Net periodic defined benefit plan (credit) cost other than service cost		(136	)		(128	)		(545	)		(512	)
Other, net		(159	)		44			48			(140	)
Total	$	(223	)	$	110		$	139		$	(402	)