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Home Industry News Merck sees profits rise as sales fall

Merck sees profits rise as sales fall

1st February 2006

Merck & Co, parent company of Merck Sharp & Dohme (MSD), has reported slightly higher profits for the fourth quarter despite being hit by lower sales and the threat of legal actions.

The firm’s net income for 2005 fell to $4.6 billion from $5.8 billion in 2004, while worldwide sales were at $22 billion, down from $22.9 billion.

For the fourth quarter of 2005 profits rose by two per cent to $1.1 billion and sales remained almost unchanged at $5.8 billion.

The fall in sales of four per cent was said to be down in part to the withdrawal of Vioxx.

Merck also announced that an additional reserve of $295 million, on top of the $675 million already announced, was to be established for legal costs for cases involving Vioxx.

Merck chief executive president Richard Clark said: “Merck’s performance for the quarter and the full year was strong and serves as a platform for the future.

“In December, we outlined our strategic plan to return Merck to an industry-leading position and we’ve now begun the important work of executing against it. We are focused on priority disease areas, redefining our drug discovery and development model, working to achieve leadership in emerging pharmaceutical markets, building a new commercial model and creating a lean and flexible cost structure.

“I am confident in our ability to make this plan a reality.”

Merck’s global restructuring plan will see 7,000 jobs lost with five manufacturing sites being closed, including the UK plant at Ponders End, Enfield, and the firm’s basic research centre in Terlings Park, Essex, will also face closure.

track© Adfero Ltd

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