Merck & Co.’s 4Q16 revenues
Merck & Co. (MRK) reported a decline of 1% in its revenues to ~$10.1 billion in 4Q16. The company reported no operational growth for 4Q16, but a 1% negative impact of foreign exchange partially offset the growth. For fiscal 2016, the company reported revenues of ~$39.8 billion, up 1% compared to $39.5 billion in 2015.
The above graph shows the revenues of Merck & Co. in each quarter. As the company has operations in over 100 countries and ~55% of total revenues are from sales outside US markets, the company is largely exposed to currency risk. The impact of foreign exchange on the company’s revenues led to negative growth in its absolute figures.
The Global Human Health segment (or Pharmaceuticals), the highest revenue-generating segment, contributed nearly 88.0% of total revenues for 4Q16, compared to 88.4% of its total revenues for 4Q15. This segment includes franchises such as Oncology, Vaccines, Hospital Acute Care, Diabetes, Other Primary Care, and Women’s Health.
The Pharmaceuticals segment has several blockbuster drugs with a yearly contribution of over $1 billion each. These drugs include:
The competitors for Januvia and its combination version, Janumet, are Novartis’s (NVS) Galvus, as well as Onglyza, which is jointly made by Bristol-Myers Squibb (BMY) and AstraZeneca (AZN). The competitors for Zetia include Niaspan from AbbVie (ABBV) and Lipitor from Pfizer (PFE).
The Animal Health segment’s contribution increased to 8.7% of total revenues for 4Q16, compared to 8.1% for 4Q15. The growth of this segment is driven by increased revenues from companion animal products such as Bravecto, as well as new aqua and swine products.
Merck & Co.’s Animal Health segment competes with companies such as Zoetis (ZTS) and Eli Lilly & Co. (LLY). Investors can consider the VanEck Vectors Pharmaceutical ETF (PPH), which holds ~5.2% of its total assets in MRK, to gain broad-based exposure to the company.