Merck sales and net income declines, changes to continue

Drugmaker Merck & Co., said Tuesday its second quarter revenue declined from $12.3 billion to $11 billion and its net income fell from $1.8 billion to $906 million compared with the same period in 2012.

Merck, which is based in Whitehouse Station, N.J., has a big operation in West Point, Montgomery County, but also has other facilities in Pennsylvania and New Jersey.

Earlier in the year, Merck changed leaders of its research and development department.

In a conference call with financial analysts on Tuesday, chief executive officer Ken Frazier said there would be greater exploration of licensing and minor acquisitions, but seemed to downplay the likelihood of a major acquisition.

"In the long term," Frazier said, "it's a product-driven business."

New R&D chief Roger Perlmutter said that beyond looking for new products in smaller companies, he was looking for ways to wring more efficiency and narrow the focus of what drugs the company develops. Perlmutter said he was looking at products, process and people.

"There is going to be focus on the products that matter most," Perlmutter said. "There will be a series of changes that take place to improve efficiency, but there are not going to be big, enormous changes."

Some financial analysts have pushed for Merck to sell its consumer and animal health unit. Pfizer just completed the sale of its animal health unit.

Frazier said he continues to see those units as complementary, but reviewing the entire portfolio is ongoing.

"If we would view those assets as more productive outside the company, we would have to consider that," Frazier said.

 Merck's quarterly filing with the Securities and Exchange Commission is here.

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