Wednesday, February 5, 2014

Merck's 2014 EPS Guidance: At Lower End Of Consensus Estimates; Another Currency Devaluation Possible; AZ J/V To End?

This in part is due to the fact that Merck now expects that the AstraZeneca joint venture will end in June 2014. That, with additional possible currency devaluations devaluations in important emerging markets in 2014, lead Merck to trim full year 2014 EPS guidance.

That's the most important item from today's call. Nothing definitive on Consumer Health or on Animal Health. Gotta' bounce; more later today.

. . . .currencies caused a 2 per cent decrease in the full year 2013; 3 per cent in Q4 2013 alone. . . .

And Kudos, here: Merck also really bet big, once again -- on MK-3475: three new studies; three new co-horts, in two new cancer-types. Gutsy call. That is easily an additional $1 to $1.2 billion, invested in MK-3475. Nice!

Novartis CEO keeps pushing the idea of an asset swap (straight across) to Wall Street (because it would be his dream come true, if it could clear various global antitrust regulatory reviews -- i.e., not likely, in my experienced opinion); Mr. Frazier was immensely coy about the notion. "What are the practical options?" Mr. Frazier asks. My emphasis. He also is not "out there" -- wildly hunting major M&A -- focused niches only.

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