By LINDA A. JOHNSON
Merck is posting a 29% jump in fourth-quarter profit and it’s spinning off its women’s health division and other operations that churn out $6.5 billion in annual revenues.
The drugmaker on Wednesday reported net income of $2.36 billion, or 92 cents per share, up from $1.83 billion, or 69 cents per share, a year earlier.
Adjusted earnings came to $2.98 billion, or $1.16 per share, edging out by a penny the projections from Wall Street analysts, according to a survey by FactSet.
The maker of Januvia Type 2 diabetes pills reported revenue of $11.87 billion, up 8% from a year ago. That missed analysts’ expectations for $11.98 billion.
Merck said the spinoff of women’s medicines and some of its older drugs and biosimilars, or near-copies of biologic drugs, is expected to be completed in the first half of 2021. It will create a new company via a tax-free distribution to Merck shareholders.
It expects to record $1.5 billion in operating efficiencies by 2024 with the spinoff.
“Over the past several years, we have purposefully shifted the focus of our efforts and resources to our best opportunities for growth,” Chief Executive Kenneth Frazier said in a statement. “We believe we can benefit from even greater focus.”
The company’s key growth areas are its cancer drugs, vaccines and veterinary medicines.
Merck’s pharmaceutical business posted sales totaling $10.53 billion in the fourth quarter, up 8%.
Cancer blockbuster Keytruda, one of the top new oncology drugs that boost the immune system to hunt and kill cancer cells, led sales, bringing in $3.11 billion in the quarter. For the year, it posted a whopping $11.08 billion in sales, nearly 24% of total company sales.
The company, based in Kenilworth, New Jersey, forecast adjusted annual net income of $5.62 to $5.77 per share, for all of 2020, and revenue ranging from $48.8 billion to $50.3 billion. Analysts were expecting earnings of $5.64 per share and revenue of $46.4 billion.
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