Merck Provides Update on Expenses Related to Recent Transactions
January 23, 2023 6:45 am ET
RAHWAY, N.J., Jan. 23, 2023 – Merck (NYSE: MRK), known as MSD outside of the United States and Canada, in the fourth quarter of 2022, announced the acquisition of Imago Biosciences, Inc. (Imago) for an approximate total value of $1.35 billion and a license and collaboration agreement with Kelun Biotech (Kelun) which includes an up-front payment of $175 million. The Imago acquisition closed in January 2023 and the collaboration with Kelun is expected to close in the first quarter of 2023, resulting in the inclusion of an aggregate $1.4 billion of research and development expenses in Merck’s GAAP and non-GAAP results for the first quarter and full year of 2023. No tax benefit will be recognized on the expense for the Imago acquisition, which will result in an approximate 1 percentage point unfavorable impact to Merck’s expected full year 2023 GAAP and non-GAAP 2023 tax rates. In total, the full year 2023 GAAP and non-GAAP EPS impact from these two transactions is approximately $0.53, excluding the research and development expense expected to be incurred to advance the development of the respective programs. The impact of these transactions will be reflected in Merck’s 2023 financial outlook that will be communicated on February 2.
As previously disclosed, while research and development expenses may be incurred upon execution of collaborations, licensing agreements, and other asset acquisitions, Merck does not forecast significant research and development expenses from such potential transactions when providing GAAP and non-GAAP outlook information due to the uncertainty of the future occurrence of such transactions in any given period.
At Merck, known as MSD outside of the United States and Canada, we are unified around our purpose: We use the power of leading-edge science to save and improve lives around the world. For more than 130 years, we have brought hope to humanity through the development of important medicines and vaccines. We aspire to be the premier research-intensive biopharmaceutical company in the world – and today, we are at the forefront of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. We foster a diverse and inclusive global workforce and operate responsibly every day to enable a safe, sustainable and healthy future for all people and communities. For more information, visit www.merck.com and connect with us on Twitter, Facebook, Instagram, YouTube and LinkedIn.
Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J., USA
This statement of Merck & Co., Inc., Rahway, N.J., USA (the “company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to pipeline candidates that the candidates will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.
Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of the global outbreak of novel coronavirus disease (COVID-19); the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.
The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2021 and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).
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