In it, at page 28, we get more granular detail on the NotPetya attack's effects (now likely to continue through all of 2018), and on the aftermath of Hurricane Maria's direct strike on the island of Puerto Rico (and Merck's one plant there), thus:
. . . .Cyber-attack
On June 27, 2017, the Company experienced a network cyber-attack that led to a disruption of its worldwide operations, including manufacturing, research and sales operations. Most of the Company’s manufacturing sites are now largely operational, manufacturing active pharmaceutical ingredient (API), formulating, packaging and shipping product. The Company’s external manufacturing was not impacted. Throughout this time, Merck has continued to fulfill orders and ship product.
The Company is confident in the continuous supply of key products such as Keytruda, Januvia (sitagliptin) and Zepatier (elbasvir and grazoprevir). However, as anticipated, the Company was unable to fulfill orders for certain other products in certain markets, which had an unfavorable effect on sales for the third quarter and first nine months of 2017 of approximately $135 million. In addition, the Company recorded manufacturing-related expenses, primarily unfavorable manufacturing variances, in Materials and Production costs, as well as expenses related to remediation efforts in Marketing and Administrative expenses and Research and Development expenses, which aggregated $175 million for the third quarter and first nine months of 2017. The Company anticipates a similar impact to revenue and expenses in the fourth quarter of 2017 and for the full year of 2018 from the cyber-attack. Additionally, the temporary production shut-down from the cyber-attack contributed to the Company’s inability to meet higher than expected demand for Gardasil 9 (Human Papillomavirus 9-valent Vaccine, Recombinant), which resulted in Merck’s decision to borrow doses of Gardasil 9 from the U.S. Centers for Disease Control and Prevention (CDC) Pediatric Vaccine Stockpile, reducing sales as discussed below. Merck does not expect a significant impairment to the value of intangible assets related to marketed products or inventories as a result of the cyber-attack.
The Company has insurance coverage insuring against costs resulting from cyber-attacks. However, there may be disputes with the insurers about the availability of the insurance coverage for claims related to this incident.
Hurricane Maria
In September 2017, Hurricane Maria made direct landfall on Puerto Rico. The Company has one plant in Puerto Rico that makes a limited number of its pharmaceutical products, and the Company also works with contract manufacturers on the island. Merck’s plant did not sustain substantial damage, and production activities at the plant have resumed, although the operations at the plant are currently reliant on alternative sources of power and water. The Company is making progress despite the significant damage to the island’s infrastructure; however, supply chains within Puerto Rico are not yet restored. Based on Merck’s current assessment, the Company expects an immaterial impact to sales in 2017 and 2018. . . .
Now you know. . . and onward, headed for points west, through Tuesday. Be excellent to one another; and. . . I can't resist: 45 just made a bad night for the GOP much worse. Smile.
नमस्ते
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