`
`U N I T E D S TAT E S
`S E C U R I T I E S A N D E X C H A N G E C O M M I S S I O N
`WASHINGTON, D. C. 20549
`FORM 10-K
`Annual Report Pursuant to Section 13 or 15(d)
`of the Securities Exchange Act of 1934
`For the Fiscal Year Ended December 31, 2009
`or
`Transition Report Pursuant to Section 13 or 15(d)
`of the Securities Exchange Act of 1934
`For the transition period from
`to
`
`(MARK ONE)
`¥
`
`n
`
`Commission File No. 1-6571
`
`Merck & Co., Inc.
`One Merck Drive
`Whitehouse Station, N. J. 08889-0100
`(908) 423-1000
`
`Incorporated in New Jersey
`
`I.R.S. Employer
`Identification No. 22-1918501
`Securities Registered pursuant to Section 12(b) of the Act:
`Name of Each Exchange
`on which Registered
`
`Title of Each Class
`
`New York Stock Exchange
`Common Stock ($0.50 par value)
`New York Stock Exchange
`Mandatory Convertible Preferred Stock
`Number of shares of Common Stock ($0.50 par value) outstanding as of January 29, 2010: 3,115,317,260.
`Aggregate market value of Common Stock ($0.50 par value) held by non-affiliates on June 30, 2009 based on closing price on
`June 30, 2009: $41,003,000,000.
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
`Act. Yes ¥
`No n
`Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
`Act. Yes n
`No ¥
`Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
`Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
`reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¥
`No n
`Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
`Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the
`preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¥
`No n
`Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained
`herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by
`reference in Part III of this Form 10-K or any amendment to this Form 10-K. n
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a
`smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in
`Rule 12b-2 of the Exchange Act. (Check One):
`Large accelerated filer ¥
`Accelerated filer n
`
`Non-accelerated filer n
`(Do not check if a smaller reporting company)
`Indicate by check mark whether the registrant
`is a shell company (as defined in Rule 12b-2 of the Exchange
`Act). Yes n
`No ¥
`
`Smaller reporting company n
`
`Document
`
`Documents Incorporated by Reference:
`
`Proxy Statement for the Annual Meeting of
`Shareholders to be held May 25, 2010, to be filed with the
`Securities and Exchange Commission within 120 days after the
`close of the fiscal year covered by this report
`
`Part of Form 10-K
`
`Part III
`
`MYLAN - EXHIBIT 1053
`Mylan et al. v. AstraZeneca
`IPR2015-01340
`
`
`
`Table of Contents
`
`Part I
`Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 1.
`Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Cautionary Factors that May Affect Future Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 2.
`Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 3.
`Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Reserved
`
`Item 4.
`
`Part II
`Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
`of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 6.
`Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . .
`Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . .
`Item 8.
`Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`(a)
`Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . .
`Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`(b)
`Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . .
`Item 9.
`Item 9A. Controls and Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Management’s Report
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`
`Part III
`Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 12.
`Security Ownership of Certain Beneficial Owners and Management and Related
`Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 13. Certain Relationships and Related Transactions, and Director Independence. . . . . . . . . . . . .
`Item 14.
`Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`
`Part IV
`Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Consent of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . .
`Independent Auditors’ Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`
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`183
`184
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`185
`185
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`185
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`186
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`186
`204
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`207
`
`
`
`Item 1. Business.
`
`PART I
`
`On November 3, 2009, Merck & Co., Inc. (“Old Merck”) and Schering-Plough Corporation (“Schering-
`Plough”) completed their previously-announced merger (the “Merger”). In the Merger, Schering-Plough acquired
`all of the shares of Old Merck, which became a wholly-owned subsidiary of Schering-Plough and was renamed
`Merck Sharp & Dohme Corp. Schering-Plough continued as the surviving public company and was renamed
`Merck & Co., Inc. (“New Merck” or the “Company”). However, for accounting purposes only, the Merger was
`treated as an acquisition with Old Merck considered the accounting acquirer. Accordingly, the accompanying
`financial statements reflect Old Merck’s stand-alone operations as they existed prior to the completion of the
`Merger. The results of Schering-Plough’s business have been included in New Merck’s financial statements only for
`periods subsequent to the completion of the Merger. Therefore, New Merck’s financial results for 2009 do not
`reflect a full year of legacy Schering-Plough operations. References in this report and in the accompanying financial
`statements to “Merck” for periods prior to the Merger refer to Old Merck and for periods after the completion of the
`Merger to New Merck.
`
`The Company is a global health care company that delivers innovative health solutions through its
`medicines, vaccines, biologic therapies, and consumer and animal products, which it markets directly and through
`its joint ventures. The Company’s operations are principally managed on a products basis and are comprised of one
`reportable segment, which is the Pharmaceutical segment. The Pharmaceutical segment includes human health
`pharmaceutical and vaccine products marketed either directly by the Company or through joint ventures. Human
`health pharmaceutical products consist of therapeutic and preventive agents, sold by prescription, for the treatment
`of human disorders. The Company sells these human health pharmaceutical products primarily to drug wholesalers
`and retailers, hospitals, government agencies and managed health care providers such as health maintenance
`organizations, pharmacy benefit managers and other institutions. Vaccine products consist of preventative pediatric,
`adolescent and adult vaccines, primarily administered at physician offices. The Company sells these human health
`vaccines primarily to physicians, wholesalers, physician distributors and government entities. The Company’s
`professional representatives communicate the effectiveness, safety and value of its pharmaceutical and vaccine
`products to health care professionals in private practice, group practices and managed care organizations. The
`Company also has animal health operations that discover, develop, manufacture and market animal health products,
`including vaccines. The Company’s professional representatives communicate the safety and value of the
`Company’s animal health products to veterinarians, distributors and animal producers. Additionally, the Company
`has consumer health care operations that develop, manufacture and market Over-the-Counter (“OTC”), foot care
`and sun care products, which are sold through wholesale and retail drug, food chain and mass merchandiser outlets
`in the United States and Canada.
`
`information and other information about the Pharmaceutical segment, see Item 7.
`For financial
`“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 8. “Financial
`Statements and Supplementary Data” below.
`
`All product or service marks appearing in type form different from that of the surrounding text are
`trademarks or service marks owned, licensed to, promoted or distributed by Merck, its subsidiaries or affiliates,
`except as noted. Cozaar and Hyzaar are registered trademarks of E.I. du Pont de Nemours and Company,
`Wilmington, DE. All other trademarks or services marks are those of their respective owners.
`
`Overview
`
`In the Merger, Old Merck
`As discussed above, the Merger was completed on November 3, 2009.
`shareholders received one share of common stock of New Merck for each share of Old Merck stock that they owned,
`and Schering-Plough shareholders received 0.5767 of a share of common stock of New Merck and $10.50 in cash
`for each share of Schering-Plough stock that they owned. The consideration in the Merger was valued at $49.6
`billion in the aggregate. Schering-Plough was Old Merck’s long-term partner in the Merck/Schering-Plough
`cholesterol partnership (the “MSP Partnership”). The cash portion of the consideration was funded with a
`
`2
`
`
`
`combination of existing cash, including proceeds from the sale of Old Merck’s interest in Merial Limited, the sale or
`redemption of investments and the issuance of debt.
`
`The combined company has a research and development pipeline with greater depth and breadth and
`many promising drug candidates, a significantly broader portfolio of medicines and an expanded presence in key
`international markets, particularly in high-growth emerging markets. The Company anticipates that the efficiencies
`gained from the Merger will allow it to invest in promising pipeline candidates, as well as strategic external research
`and development opportunities.
`
`The combination increased the Company’s pipeline of early, mid- and late stage product candidates,
`including a significant increase in the number of potential medicines the Company has in Phase III development to
`19 candidates. Additionally, a number of candidates are currently under review in the United States and
`internationally.
`
`The Merger also is expected to accelerate the expansion into therapeutic areas that Old Merck has focused
`on in recent years with the addition of Schering-Plough’s established presence and expertise in oncology,
`neuroscience and novel biologics. Further, the Merger is expected to broaden the Company’s commercial portfolio
`with leading franchises in key therapeutic areas, including cardiovascular, respiratory, oncology, neuroscience,
`infectious diseases, immunology and women’s health. Additionally, the combined company is expected to realize
`potential benefits from its animal health business and portfolio of consumer health brands, including Claritin,
`Coppertone and Dr. Scholl’s. Many of the legacy Schering-Plough’s products are expected to have long periods of
`marketing exclusivity and, by leveraging the combined company’s expanded product offerings, the Company
`expects to benefit from additional revenue growth opportunities. For example, the combined company is expected
`to have expanded opportunities for life-cycle management through the introduction of potential new combinations
`and formulations of existing products of the two legacy companies. Also, the Company will have an expanded
`global presence and a more geographically diverse revenue base. Schering-Plough’s significant international
`presence will accelerate Old Merck’s own international growth efforts.
`
`During 2009, revenue increased 15% driven largely by the incremental sales resulting from the inclusion
`of the post-Merger results of legacy Schering-Plough products, such as Remicade (infliximab), a treatment for
`inflammatory diseases, Temodar (temozolomide), a treatment for certain types of brain tumors, Nasonex
`(mometasone furoate monohydrate) nasal spray, an inhaled nasal corticosteroid for the treatment of nasal allergy
`symptoms, and PegIntron (peginterferon alpha-2b) for treating chronic hepatitis C, as well as the recognition of
`revenue from sales of Zetia (ezetimibe) and Vytorin (ezetimibe/simvastatin), cholesterol modifying medicines.
`Prior to the Merger, sales of Zetia and Vytorin were recognized by the MSP Partnership and the results of Old
`Merck’s interest in the MSP Partnership were recorded in Equity income from affiliates. As a result of the Merger,
`the MSP Partnership is now wholly-owned by the Company and therefore revenues from these products for the post-
`Merger period are reflected in Sales. Additionally, the Company recognized sales in the post-Merger period from
`legacy Schering-Plough animal health and consumer health care products. Also contributing to the sales increase
`was growth in Januvia (sitagliptin phosphate) and Janumet (sitagliptin phosphate and metformin hydrochloride) for
`the treatment of type 2 diabetes, Isentress (raltegravir), an antiretroviral therapy for the treatment of HIV infection,
`Singulair (montelukast sodium), a medicine indicated for the chronic treatment of asthma and the relief of
`symptoms of allergic rhinitis, Varivax (Varicella Virus Vaccine Live), a vaccine to help prevent chickenpox
`(varicella), and Pneumovax (pneumococcal vaccine polyvalent), a vaccine to help prevent pneumococcal disease.
`These increases were partially offset by lower sales of Fosamax (alendronate sodium) for the treatment and
`prevention of osteoporosis. Fosamax and Fosamax Plus D (alendronate sodium/cholecalciferol) lost market
`exclusivity for substantially all formulations in the United States in February 2008 and April 2008, respectively.
`Revenue was also negatively affected by lower sales of Gardasil [Human Papillomavirus Quadrivalent (Types 6, 11,
`16, and 18) Vaccine, Recombinant], a vaccine to help prevent cervical, vulvar and vaginal cancers, precancerous or
`dysplastic lesions, and genital warts caused by human papillomavirus (“HPV”) types 6, 11, 16 and 18, Cosopt
`(dorzolamide hydrochloride and timolol maleate ophthalmic solution)/Trusopt (dorzolamide hydrochloride oph-
`thalmic solution), ophthalmic products which lost U.S. market exclusivity in October 2008, and lower revenue from
`the Company’s relationship with AstraZeneca LP (“AZLP”). Other products experiencing declines include RotaTeq
`(Rotavirus Vaccine, Live, Oral, Pentavalent), a vaccine to help protect against rotavirus gastroenteritis in infants and
`
`3
`
`
`
`children, Zocor (simvastatin), the Company’s statin for modifying cholesterol, and Primaxin (imipenem and
`cilastatin sodium) for the treatment of bacterial infections.
`
`As a result of the Merger, the Company expects to achieve substantial cost savings across all areas,
`including from consolidation in both sales and marketing and research and development, the application of the
`Company’s lean manufacturing and sourcing strategies to the expanded operations, and the full integration of the
`MSP Partnership.
`
`In February 2010, the Company announced the first phase of a new global restructuring program (the
`“Merger Restructuring Program”) in conjunction with the integration of the legacy Merck and legacy Schering-
`Plough businesses. This Merger Restructuring Program is intended to optimize the cost structure of the combined
`Company. As part of the first phase of the Merger Restructuring Program, by the end of 2012, the Company expects
`to reduce its total workforce by approximately 15% across all areas of the Company worldwide. The Company also
`plans to eliminate 2,500 vacant positions as part of the first phase of the program. These workforce reductions will
`primarily come from the elimination of duplicative positions in sales, administrative and headquarters organiza-
`tions, as well as from the consolidation of certain manufacturing facilities and research and development operations.
`The Company will continue to hire new employees in strategic growth areas of the business during this period.
`Certain actions, such as the ongoing reevaluation of manufacturing and research and development facilities
`worldwide, have not yet been completed, but will be included later in 2010 in other phases of the Merger
`Restructuring Program. In connection with the first phase of the Merger Restructuring Program, separation costs
`under the Company’s existing severance programs worldwide were recorded in the fourth quarter of 2009 to the
`extent such costs were probable and reasonably estimable. The Company recorded pretax restructuring costs of
`$1.5 billion, primarily employee separation costs, related to the Merger Restructuring Program in the fourth quarter
`of 2009. This first phase of the Merger Restructuring Program is expected to be completed by the end of 2012 with
`the total pretax costs estimated to be $2.6 billion to $3.3 billion. The Company estimates that approximately 85% of
`the cumulative pretax costs relate to cash outlays, primarily related to employee separation expense. Approximately
`15% of the cumulative pretax costs are non-cash, relating primarily to the accelerated depreciation of facilities to be
`closed or divested.
`
`The Company expects this first phase of the Merger Restructuring Program to yield annual savings in
`2012 of approximately $2.6 billion to $3.0 billion. These anticipated savings relate only to the first phase of the
`Merger Restructuring Program and therefore are only a portion of the estimated $3.5 billion of incremental annual
`savings originally disclosed when the Merger was announced. The Company expects that additional savings will be
`generated by subsequent phases of the Merger Restructuring Program that will be announced later this year, as well
`as by non-restructuring related activities, such as procurement savings initiatives. These cost savings, which are
`expected to come from all areas of the Company’s pharmaceutical business, are in addition to the previously
`announced ongoing cost reduction initiatives at both legacy companies.
`
`As a result of the Merger, the Company obtained a controlling interest in the MSP Partnership and it is
`now owned 100% by the Company. Accordingly, the Company was required to remeasure Merck’s previously held
`equity interest in the MSP Partnership at its merger-date fair value and recognize the resulting gain in earnings. As a
`result, the Company recorded a gain of $7.5 billion recognized in Other (income) expense, net in 2009. Also during
`2009, Old Merck sold its 50% interest in Merial Limited (“Merial”) to sanofi-aventis for $4 billion in cash. The sale
`resulted in the recognition of a $3.2 billion gain reflected in Other (income) expense, net in 2009. See Note 10 to the
`consolidated financial statements in Item 8. “Financial Statements and Supplementary Data” below for further
`information.
`
`Earnings per common share (“EPS”) assuming dilution for 2009 were $5.65, which reflect a net impact of
`$2.40 resulting from gains related to the MSP Partnership and the sale of Merial, partially offset by increased
`expenses from the amortization of purchase accounting adjustments, restructuring and merger-related costs. EPS in
`2009 were also affected by the dilutive impact of shares issued in the Merger.
`
`4
`
`
`
`Product Sales
`
`Sales(1) of the Company’s products were as follows:
`($ in millions)
`
`Pharmaceutical:
`Bone, Respiratory, Immunology and Dermatology
`Singulair
`Fosamax
`Propecia
`Remicade
`Arcoxia
`Nasonex
`Clarinex
`Asmanex
`Cardiovascular
`Vytorin
`Zetia
`Integrilin
`Diabetes and Obesity
`Januvia
`Janumet
`Infectious Disease
`Isentress
`Primaxin
`Cancidas
`Invanz
`Crixivan/Stocrin
`PegIntron
`Avelox
`Rebetol
`Mature Brands
`Cozaar/Hyzaar
`Zocor
`Vasotec/Vaseretic
`Proscar
`Claritin Rx
`Proventil
`Neurosciences and Ophthalmology
`Maxalt
`Cosopt/Trusopt
`Remeron
`Subutex/Suboxone
`Oncology
`Emend
`Temodar
`Caelyx
`Intron A
`Vaccines(2)
`ProQuad/M-M-R II/Varivax
`Gardasil
`RotaTeq
`Pneumovax
`Zostavax
`Women’s Health and Endocrine
`Follistim/Puregon
`NuvaRing
`Other Pharmaceutical(3)
`
`Other segment revenues(4)
`Total segment revenues
`Other(5)
`
`2009
`
`2008
`
`2007
`
`$ 4,659.7
`1,099.8
`440.3
`430.7
`357.5
`164.9
`100.6
`37.0
`
`$ 4,336.9
`1,552.7
`429.1
`—
`377.3
`—
`—
`—
`
`$ 4,266.3
`3,049.0
`405.4
`—
`329.1
`—
`—
`—
`
`440.8
`402.9
`45.9
`
`1,922.1
`658.4
`
`751.8
`688.9
`616.7
`292.9
`206.1
`148.7
`66.2
`36.1
`
`3,560.7
`558.4
`310.8
`290.9
`71.1
`26.2
`
`574.5
`503.5
`38.5
`36.3
`
`313.1
`188.1
`46.5
`38.4
`
`84.2
`6.4
`—
`
`1,397.1
`351.1
`
`361.1
`760.4
`596.4
`265.0
`275.1
`—
`—
`—
`
`3,557.7
`660.1
`356.7
`323.5
`—
`—
`
`529.2
`781.2
`—
`—
`
`259.7
`—
`—
`—
`
`84.3
`6.5
`—
`
`667.5
`86.4
`
`41.3
`763.5
`536.9
`190.2
`310.2
`—
`—
`—
`
`3,350.1
`876.5
`494.6
`411.0
`—
`—
`
`467.3
`786.8
`—
`—
`
`201.7
`—
`—
`—
`
`1,368.5
`1,118.4
`521.9
`345.6
`277.4
`
`96.5
`88.3
`1,294.9
`25,236.5
`2,114.0
`27,350.5
`77.8
`$27,428.3
`
`1,268.5
`1,402.8
`664.5
`249.3
`312.4
`
`—
`—
`922.9
`22,081.3
`1,694.1
`23,775.4
`74.9
`$23,850.3
`
`1,347.1
`1,480.6
`524.7
`233.2
`236.0
`
`—
`—
`1,136.6
`22,282.8
`1,848.1
`24,130.9
`66.8
`$24,197.7
`
`(1) Sales of legacy Schering-Plough products only reflect results for the post-Merger period through December 31, 2009. Sales of MSP Partnership
`products Zetia and Vytorin represent sales for the post-Merger period through December 31, 2009. Prior to the Merger, sales of Zetia and Vytorin
`were primarily recognized by the MSP Partnership and the results of Old Merck’s interest in the MSP Partnership were recorded in Equity income
`from affiliates. Sales of Zetia and Vytorin in 2008 and 2007 reflect Old Merck’s sales of these products in Latin America which was not part of the
`MSP Partnership.
`(2) These amounts do not reflect sales of vaccines sold in most major European markets through the Company’s joint venture, Sanofi Pasteur MSD,
`the results of which are reflected in Equity income from affiliates. These amounts do, however, reflect supply sales to Sanofi Pasteur MSD.
`(3) Other pharmaceutical primarily includes sales of other human pharmaceutical products, including products within the franchises not listed
`separately.
`(4) Reflects other non-reportable segments, including animal health and consumer health care, and revenue from the Company’s relationship
`with AZLP primarily relating to sales of Nexium, as well as Prilosec. Revenue from AZLP was $1.4 billion, $1.6 billion and $1.7 billion in
`2009, 2008 and 2007, respectively.
`(5) Other revenues are primarily comprised of miscellaneous corporate revenues, third party manufacturing sales, sales related to divested
`products or businesses and other supply sales not included in segment results.
`
`5
`
`
`
`Pharmaceutical
`The Company’s pharmaceutical products include therapeutic and preventive agents, generally sold by
`prescription, for the treatment of human disorders. Among these are:
`
`Bone, Respiratory, Immunology and Dermatology: Singulair; Remicade; Fosamax; Nasonex; Propecia
`(finasteride), a product for the treatment of male pattern hair loss; Clarinex (desloratadine), a non-sedating
`antihistamine for the treatment of allergic rhinitis; Arcoxia (etoricoxib) for the treatment of arthritis and pain; and
`Asmanex Twisthaler (mometasone furoate inhalation powder), an oral dry-powder corticosteroid inhaler for first-
`line maintenance treatment of asthma.
`
`Cardiovascular Disease: Zetia (marketed as Ezetrol outside the United States); Vytorin (marketed as
`Inegy outside the United States) and Integrilin (eptifibatide) Injection, a platelet receptor GP IIb/IIIa inhibitor for
`the treatment of patients with acute coronary syndrome and those undergoing percutaneous coronary intervention in
`the United States, as well as for the prevention of early myocardial infarction in patients with acute coronary
`syndrome in most countries.
`
`Diabetes and Obesity:
`
`Januvia and Janumet.
`
`Isentress; Primaxin; Cancidas (caspofungin acetate), an anti-fungal product;
`Infectious Disease:
`PegIntron; Invanz (ertapenem sodium) for the treatment of certain infections; Avelox (moxifloxacin), which the
`Company only markets in the United States, a broad-spectrum fluoroquinolone antibiotic for certain respiratory and
`skin infections; Crixivan (indinavir sulfate) and Stocrin (efavirenz), antiretroviral therapies for the treatment of HIV
`infection; and Rebetol (ribavirin, USP) Capsules and Oral Solution for use in combination with PegIntron or Intron
`A (interferon alpha-2b, recombinant) for treating chronic hepatitis C.
`
`Mature Brands: Cozaar (losartan potassium); Hyzaar (losartan potassium and hydrochlorothiazide;,
`Vasotec (enalapril maleate) and Vaseretic (enalapril maleate-hydrochlorothiazide), the Company’s most significant
`hypertension and/or heart failure products; Zocor; Proscar (finasteride), a urology product for the treatment of
`symptomatic benign prostate enlargement; Claritin Rx; and Proventil HFA (albuterol) inhalation aerosol for the
`relief of bronchospasm in patients 12 years or older.
`
`Neurosciences and Ophthalmology: Maxalt (rizatriptan benzoate), an acute migraine product; Cosopt
`and Trusopt, Merck’s largest-selling ophthalmological products; Remeron (mirtazapine), an antidepressant;
`Subutex, a sublingual tablet formulation of buprenorphine; and Suboxone, a sublingual tablet combination of
`buprenorphine and naloxone, marketed by the Company in certain countries outside the United States for the
`treatment of opiate addiction.
`
`Oncology: Temodar/Temodal; Emend (aprepitant) for the prevention of chemotherapy-induced and
`post-operative nausea and vomiting; Caelyx (pegylated liposomal doxorubicin hydrochloride), a long-circulating
`formulation of the cancer drug doxorubicin marketed by the Company outside the United States for the treatment of
`certain ovarian cancers, Kaposi’s sarcoma and metastatic breast cancer; and Intron A for Injection, marketed for
`chronic hepatitis B and C and numerous anticancer indications worldwide, including as adjuvant therapy for
`malignant melanoma.
`
`Vaccines: M-M-R II (Measles, Mumps and Rubella Virus Vaccine Live), a vaccine against measles,
`mumps and rubella; ProQuad (Measles, Mumps, Rubella and Varicella Virus Vaccine Live), a pediatric combi-
`nation vaccine against measles, mumps, rubella and varicella; Varivax; Gardasil; RotaTeq; Pneumovax; and
`Zostavax (Zoster Vaccine Live).
`
`Women’s Health: Follistim/Puregon (follitropin beta injection), a fertility treatment; and NuvaRing
`(etonogestrel/ethinyl estradiol), a vaginal contraceptive ring.
`
`Animal Health
`The Animal Health segment discovers, develops, manufactures and markets animal health products,
`including vaccines. Principal marketed products in this segment include:
`
`Livestock Products: Nuflor antibiotic range for use in cattle and swine; Bovilis/Vista vaccine lines for
`infectious diseases in cattle; Banamine bovine and swine anti-inflammatory; Estrumate for treatment of fertility
`
`6
`
`
`
`disorders in cattle; Regumate/Matrix fertility management for swine and horses; Resflor combination broad-
`spectrum antibiotic and non-steroidal anti-inflammatory drug for bovine respiratory disease; Zilmax and Revalor to
`improve production efficiencies in beef cattle; M+Pac swine pneumonia vaccine; and Porcilis vaccine line for
`infectious diseases in swine.
`
`Poultry Products: Nobilis/Innovax vaccine lines for poultry; and Paracox and Coccivac coccidiosis
`
`vaccines.
`
`Companion Animal Products: Nobivac/Continuum vaccine lines for flexible dog and cat vaccination;
`Otomax/Mometamax/Posatex ear ointments for acute and chronic otitis; Caninsulin/Vetsulin diabetes mellitus
`treatment for dogs and cats; Panacur/Safeguard broad-spectrum anthelmintic (de-wormer) for use in many animals;
`and Scalibor/Exspot for protecting against bites from fleas, ticks, mosquitoes and sandflies.
`
`Aquaculture Products: Slice parasiticide for sea lice in salmon; Aquavac/Norvax vaccines against
`bacterial and viral disease in fish; Compact PD vaccine for salmon; and Aquaflor antibiotic for farm-raised fish.
`
`Consumer Health Care
`The Consumer Health Care segment develops, manufactures and markets OTC, foot care and sun care
`products. Principal products in this segment include:
`
`OTC Products: Claritin non-drowsy antihistamines; MiraLAX treatment for occasional constipation;
`Coricidin HBP decongestant-free cold/flu medicine for people with high blood pressure; Afrin nasal decongestant
`spray; and Correctol laxative tablets.
`
`Foot Care: Dr. Scholl’s foot care products; Lotrimin topical antifungal products; and Tinactin topical
`antifungal products and foot and sneaker odor/wetness products.
`
`Sun Care: Coppertone sun care lotions, sprays, dry oils and lip-protection products and sunless tanning
`products; and Solarcaine sunburn relief products.
`
`For a further discussion of sales of the Company’s products, see Item 7. “Management’s Discussion and
`Analysis of Financial Condition and Results of Operations” below.
`
`Product Approvals
`
`In July 2009, the U.S. Food and Drug Administration (“FDA”) approved an expanded indication for
`Isentress. The broadened indication now includes use in the treatment of adult patients starting HIV-1 therapy for
`the first time (treatment-naïve), as well as in treatment-experienced adult patients.
`
`In August 2009, the FDA approved Saphris (asenapine) sublingual tablets for acute treatment of
`schizophrenia in adults and acute treatment of manic or mixed episodes associated with bipolar I disorder with
`or without psychotic features in adults. Saphris can be used as a first-line treatment and is the first psychotropic drug
`to receive initial approval for both of these indications simultaneously.
`
`In October 2009, the FDA approved Gardasil for use in boys and men 9 through 26 years of age for the
`prevention of genital warts caused by HPV types 6 and 11, making Gardasil the only HPV vaccine approved for use
`in males. Gardasil is also the only HPV vaccine that protects against HPV types 6 and 11 which cause
`approximately 90 percent of all genital warts cases. In addition, on October 21, 2009, Old Merck announced
`that the U.S. Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices
`(“ACIP”) supports the permissive use of Gardasil for boys and young men ages 9 to 26, which means that Gardasil
`may be given to males ages 9 to 26 to reduce the likelihoo