Wednesday, February 15, 2012

CFO Kellogg To Discuss Brazil JV; New Glaucoma FDA Approval -- At Leerink Swann Conference This Morning

It seems likely that topics for today's prepared remarks will include the just-announced JV in Brazil, and the FDA approval of Zioptan™, for glaucoma. What else will Peter Kellogg discuss? Probably nothing new and material, but you might want to tune in at 11 a.m. Eastern, to be sure (you'll need to leave a working e-mail address, and a name to do so):

. . . .Merck, known as MSD outside the United States and Canada, announced today that Peter N. Kellogg, Merck's chief financial officer is scheduled to present at the Leerink Swann 2012 Global Healthcare Conference in New York City on Feb. 15, at 11:00 a.m. EST. Investors, analysts, members of the media and the general public are invited to listen to a live audio webcast of the presentation. . . .

I'll catch the replay, as I am busy at that time, but will post anything significant. It would seem unlikely there would be such a development, unless he decides to describe the terms of the Cobb v. Merck settlement.


Condor said...

CFO Kellogg (at about 10 minutes, 30 seconds in) openly admitted that for Merck, and most of large-cap pharma, simply if one takes the future projected values of all the cash flow streams from Merck, into perpetuity, then discounts them back to the present, that should be the current stock price.

However, when runs this model on Merck, one finds that today's NYSE stock price would imply a negative growth in the cash flows from Merck's operations, into perpetuity.

CFO Kellogg went on -- courageously -- to admit that this implies that Wall Street has a negative view about whether Merck (and Pfizer and J&J, to be fair) can sustain the cash flow each is presently generating.

Thus, the stock sells for less than the current stream of cash-flows.

He admitted that this will be a tough perception to change, in the coming quarters. He also reaffirmed that if currencies stay about where they are now, Merck will see a downturn in year over year revenue, by about 2 to 3 percent. Ouch.


Anonymous said...

Bravo to Mr. Kellogg for telling it like it is AND explaining why. I always found him to be a very forthright EC member and I'm very happy he hasn't changed.

CFO Services said...

Very interesting; the FDA approval of Zioptan is a very big stride for Merck. I am guessing that stock prices will probably rise as a result.

condor said...

While I think Zioptan was good news, there are quite a few well-entrenched competitors in the glaucoma space, and several attractive generics, to boot. Tough to break the $300 million a year barrier here.

I think it is unlikely to ever be material enough to move the Merck stock price, especially on a base of $48 billion of annual revenue (give or take).

Namaste, just the same.

Do stop back.