Tuesday, July 28, 2015

Merck Full Year 2015 GAAP Guidance Hit By Venezuelan Deval; Deal Costs

Kenilworth just reported Q2 2015 results. More soon, but the biggest driver is a $715 million charge -- to the Venezuelan currency carrying values. More broadly, Merck saw a seven per cent downdraft, due to the strong dollar (effect of weak foreign currencies), at the sales line. Listening to the webcast now.

While it raised the full year non-GAAP guidance range for EPS (a feel-good measure by and large), Merck lowered its full-year GAAP EPS guidance, due to the Venezuelan deval charge, and costs of M&A of late. That's not welcome news, but had been widely expected.

In a separate release, Merck said it spent modestly to acquire another set of promising cancer pipeline candidates out of Israel, called cCAM Biotherapeutics:

. . . .Under terms of the agreement, Merck, through a subsidiary, will acquire all outstanding stock of cCAM in exchange for an upfront payment of $95 million in cash. In addition, cCAM shareholders of record are eligible to receive a total of up to $510 million associated with the attainment of certain clinical development, regulatory and commercial milestones. The transaction is subject to certain closing conditions. . . .

More later -- graphics soonKeytruda is showing a nice sales ramp in melanoma in the U.S., where it is the number one therapy -- but that is the smaller burden cancer set -- since BMS holds the lead in lung cancers. Do keep in mind, as Dr. Perlmutter talks, that BMS is around a year ahead on most fronts, in the highest burden cancers. Morning -- one and all!

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