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Author: newsreporter Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 4921  
Subject: Analyst comments Date: 2/19/2012 5:32 PM
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http://seekingalpha.com/article/377021-an-analysis-of-5-majo...

Merck & Co. (MRK) has faced hard times in recent years with the settlement of $4.85 billion in lawsuits in November 2007 for one of its drugs, and again in late 2011, to the tune of $950 million for its fault in marketing the product. However, I believe that withstanding these large blows and getting back on track attests to the company's resilience. In fact, the fourth quarter of 2011, Merck posted a markedly better standing than it did in the same quarter of the year previous, recovering from a $0.17 loss per share in 2010, to $0.49 earnings per share in 2011. Additionally, the full fiscal year of 2011 makes a mockery of the company's 2010 postings, as it increased GAAP-compliant net income by nearly 8x, while increasing total sales by about 4.5%

The only issue presented in the near future is that the company's U.S. patent on SINGULAIRtm will expire in August 2012. However, there is still plenty of time in the year to compensate for this event. The company has begun attempts to introduce five new drugs to the market, with intent to have them released either before, or not long into 2013. If these products reach the market in time and are well received, the drugs will combat the certain short term losses presented with SINGULAIRtm's expiration.

Recent speculation by Merck suggests that due to lower than expected quarterly numbers, 2012 will end up being a somewhat flatter year than they had originally anticipated. As stated above, the main issue is the fall in sales of SINGULAIRtm. However, this is no reason to fret. If the fall in sales only produces a flat year as opposed to a down year, then I believe the future of Merck is a bright one indeed. In my opinion, Merck deserves a bullish outlook. Despite current projections for flat short term movement, the company has shown exceptional resilience in the past and is making great strides in setting itself up in the global market. Many analysts conclude that they would hold off on Merck. This is due mostly in part to the expiration and impending healthcare reform, which leaves the whole market on the edge.
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