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About Merck & Co., Inc.

A global drugmaker, Merck makes medicines for an array of maladies ranging from hypertension to cancer. The pharmaceutical giant's top products include cancer drug Keytruda, diabetes drugs Januvia and Janumet, HPV vaccine Gardasil, a pediatric combination vaccines ProQuad, M-M-R II, Varivax. In addition, Merck makes childhood and adult vaccines for such diseases as measles, mumps, rubella and varicella and pneumonia, as well as veterinary pharmaceuticals through Merck Animal Health. In addition, the company provides analytics and clinical services to the health care sector. The US market accounts for about 45% of sales.

Operations

Merck operates through four segments: Pharmaceutical, Animal Health, Healthcare Services, and Alliances.

The Pharmaceutical segment, which accounts for nearly 90% of revenue, includes human pharmaceuticals and vaccines. It has a broad portfolio of marketed and development-stage pharmaceuticals in areas including oncology, vaccines, diabetes, other pharmaceuticals, hospital acute care, diversified brands, cardiovascular, women's health, virology, immunology, and neuroscience.

Best-selling drugs in the Pharmaceutical segment include cancer drug Keytruda, bringing in about $11.1 billion in annual sales, and type 2 diabetes drugs Januvia and Janumet, which together bring in about $5.5 billion in revenue. The company's HPV vaccine Gardasil brings in more than $3.7 billion in sales, while a pediatric combination vaccine, to help prevent measles, mumps, rubella and chickenpox ProQuad, M-M-R II, Varivax generate about $2.3 billion total sales and a medication for the reversal of two types of neuromuscular blocking agents used during surgery Bridion accounts for $1.1 billion of total sales.

The Animal Health segment, accounting for nearly 10% of sales, develops, manufactures, and markets animal health products (including vaccines) for both companion and livestock animals. Key products include Nuflor antibiotics, Bovilis/Vista vaccine lines, Bravecto for fleas, and ear ointments Otomax and Mometamax.

The Healthcare Services segment provides services and solutions that focus on engagement, health analytics and clinical services to improve the value of care delivered to patients.

The Alliances segment was largely composed of results from a partnership with AstraZeneca, which ended in 2018, related to sales of Nexium and Prilosec.

Geographic Reach

Headquartered in Kenilworth, New Jersey, Merck markets its products in over 140 countries, with its largest market — the US — accounting for about 45% of revenue. The EMEA (Europe, Middle East, and Africa) region accounts for about 25% of sales, while Japan accounts for about 10% of sales. China, Asia/Pacific region (minus Japan and China) and Latin America each accounts for about 5%. Others generate the remaining sales.

The company operates principal research facilities in the US, China, and Switzerland.

Merck's US manufacturing operations are headquartered in New Jersey. It has another nine production facilities throughout the US and in Puerto Rico. It also owns or has interests in manufacturing sites and other properties in Japan, Singapore, South Africa, and other countries in Asia, the Americas, and Western Europe.

Sales and Marketing

Merck markets its products through direct sales forces and international distributors. Customers include drug wholesalers, retailers, physicians, hospitals, pharmacies, government agencies, insurers, and health care providers. Animal health products are sold to veterinarians, animal producers, and distributors. For instance, Johnson & Johnson markets anti-inflammatory drug Simponi in the US, while Merck has marketing rights in Europe, Russia, and Turkey.

The company recorded advertising and promotion expenses $2.1 billion in 2019, $2.1 billion in 2018 and $2.2 billion in 2017, respectively.

Financial Performance

Worldwide sales were $46.8 billion in 2019, an increase of 11% compared with 2018, including a 2% unfavorable effect from foreign exchange. The sales increase was driven primarily by Merck's growth pillars of oncology, human health vaccines, certain hospital acute care products, and animal health.

Net income attributable to Merck & Co., Inc. was $9.8 billion in 2019 and $6.2 billion in 2018. The rise on their net income was primarily due to the increase on their revenue and having a lower taxes on income.

The company ended 2019 with $9.9 billion in cash, up $2.0 billion from 2018. Operating activities contributed $13.4 billion, while investing activities contributed $2.6 billion (from security and other investment sale proceeds), and financing activities used $8.9 billion via treasury stock purchases and dividends.

Strategy

Merck's performance during 2019 demonstrates execution in both commercial and research operations driven by a focus on key growth drivers and innovative pipeline investment reinforcing the company's science-led strategy. In 2019, Merck enhanced its portfolio and pipeline with external innovation, increased investment in new capital projects focused primarily on expanding manufacturing capacity across Merck's key businesses, and returned capital to shareholders.

In early 2019, Merck approved a new global restructuring program (Restructuring Program) as part of a worldwide initiative focused on further optimizing the company's manufacturing and supply network, as well as reducing its global real estate footprint. This program is a continuation of the company's plant rationalization, builds on prior restructuring programs and does not include any actions associated with the planned spin-off of NewCo. As the company continues to evaluate its global footprint and overall operating model, it has subsequently identified additional actions under the Restructuring Program, and could identify further actions over time.

Mergers and Acquisitions

In early 2020, through a subsidiary, the company acquired ArQule for $20 per share in cash for an approximate total equity value of $2.7 billion. The company also acquired worldwide rights to VECOXAN (diclazuril), an oral suspension for the prevention of coccidiosis in calves and lambs, from Elanco Animal Health. The company also acquired US rights to SENTINEL FLAVOR TABS and SENTINEL SPECTRUM Chews in the Companion Animal category from Virbac. Merck Animal Health made a cash payment of approximately $400 million in acquiring the SENTINEL branded products in the US.

The company acquired privately held Peloton, a clinical-stage biopharmaceutical company focused on the development of novel small molecule therapeutic candidates targeting hypoxia-inducible factor-2a (HIF-2a) for the treatment of patients with cancer and other non-oncology diseases. Through a subsidiary, the company acquired all outstanding shares of Peloton in exchange for an upfront payment of $1.05 billion in cash. In addition, Peloton shareholders will be eligible to receive a further $1.15 billion contingent upon successful achievement of future regulatory and sales milestones for certain candidates.

In late 2020, the company acquired a leading data and analytics company that monitors cattle body temperature and movement in order to detect illness early, the Quantified Ag.

To strengthen the company's leadership position in agriculture, in advancing fish health and welfare, in late 2019, the company acquired a leader in fish farming and wild fish conservation monitoring equipment and real-time video monitoring technology to advance fish health and welfare, from Pentair, a leading global water treatment company, Vaki.

In 2019 Merck agreed to acquire Tilos Therapeutics, a biotech firm developing treatments for cancer, fibrosis, and autoimmune diseases, in a deal worth up to $773 million.

Merck acquired privately held firm Antelliq for $2.4 billion in 2019. Antelliq specializes in digital devices for animal identification and tracking, which can help predict and treat disease. Its technology is used on livestock, pets, and fish and aquaculture.

Merck also purchased biotech Immune Design for some $300 million in 2019, gaining access to two in-vivo technology platforms used in the development of cancer vaccines.

Company Background

Merck traces its roots to the formation of Schering-Plough and the original Merck entity in the 1800s. (The two companies merged in 2009.)

Schering-Plough dates back to 1851, when Berlin chemist Ernst Schering began to sell chemicals to apothecary shops. The US subsidiary was established in 1928. The original Merck was started in 1887 when German chemist Theodore Weicker came to the US to set up a branch of German firm E. Merck AG (which was founded in 1668 and later became Merck KGaA). Both companies severed ties with their German parents during WWII.

Merck & Co., Inc.

2000 Galloping Hill Rd
Kenilworth, NJ 07033-1310
Phone: 1 (908) 740-4000

Firm Stats

Employer Type: Publicly Owned
Stock Symbol: MRK
Stock Exchange: , NYSE
EVP Global Services and CFO: Robert M. Davis
Chairman and CEO: Kenneth C. Frazier
EVP and CIO: Clark Golestani
Employees (This Location): 277
Employees (All Locations): 71,000

Major Office Locations

Kenilworth, NJ

Other Locations

Rogers, AR
La Jolla, CA
Palo Alto, CA
San Diego, CA
South San Francisco, CA
Ventura, CA
Boulder, CO
Washington, DC
Millsboro, DE
Miami Lakes, FL
Atlanta, GA
Duluth, GA
Suwanee, GA
Libertyville, IL
Rolling Meadows, IL
Schaumburg, IL
Indianapolis, IN
De Soto, KS
Baton Rouge, LA
Mandeville, LA
Cambridge, MA
Lexington, MA
Rushmore, MN
Worthington, MN
Charlotte, NC
Clyde, NC
Durham, NC
Wilson, NC
Branchburg, NJ
Jamison, NJ
Kenilworth, NJ
Madison, NJ
Rahway, NJ
Summit, NJ
Whitehouse Station, NJ
Reno, NV
Freeport, NY
New York, NY
Blue Bell, PA
Hatfield, PA
North Wales, PA
West Point, PA
Caguas, PR
Cleveland, TN
Memphis, TN
Fort Worth, TX
Elkton, VA
Richmond, VA
Waynesboro, VA
Beijing, China
Shenyang, China
Bengaluru, India
Dhar, India
Hyderabad, India
Kolkata, India
Krishna, India
Mumbai, India
New Delhi, India
Thane, India
Akita, Japan
Amagasaki, Japan
Aomori, Japan
Asahikawa, Japan
Chiba, Japan
Chiyoda-Ku, Japan
Chuo-Ku, Japan
Fukuoka, Japan
Funabashi, Japan
Gifu, Japan
Hakodate, Japan
Hiroshima, Japan
Ibaraki, Japan
Kanazawa, Japan
Kasumigaura, Japan
Kawagoe, Japan
Kitakyushu, Japan
Kobe, Japan
Kochi, Japan
Kofu, Japan
Kokubunji, Japan
Koriyama, Japan
Koto-Ku, Japan
Kumagaya, Japan
Kumamoto, Japan
Kushiro, Japan
Kyoto, Japan
Matsumoto, Japan
Mito, Japan
Miyazaki, Japan
Morioka, Japan
Nagasaki, Japan
Nagoya, Japan
Nara, Japan
Niigata, Japan
Numazu, Japan
Oita, Japan
Okayama, Japan
Okazaki, Japan
Osaka, Japan
Saga, Japan
Saitama, Japan
Sapporo, Japan
Sasebo, Japan
Sendai, Japan
Shinagawa-Ku, Japan
Shinjuku-Ku, Japan
Shizuoka, Japan
Tachikawa, Japan
Takamatsu, Japan
Takasaki, Japan
Tokushima, Japan
Tsukuba, Japan
Urasoe, Japan
Utsunomiya, Japan
Yamagata, Japan
Yokohama, Japan
Yonago, Japan
Millville, Canada
Paris, France
Drammen, Norway
Moscow, Russia
Taipei City, Taiwan
Bruxelles, Belgium
Quito, Ecuador
Ho Chi Minh, Vietnam
Makati, Philippines