As filed with the Securities and Exchange Commission on February 28, 2013
`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`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, 2012
`
`or
`Transition Report Pursuant to Section 13 or 15(d)
`of the Securities Exchange Act of 1934
`For the transition period from
`to
`Commission File No. 1-6571
`
`(MARK ONE)
`Í
`
`‘
`
`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
`
`the registrant
`
`is a well-known seasoned issuer, as defined in Rule 405 of
`
`the Securities
`
`the registrant
`
`is not
`
`required to file reports pursuant
`
`to Section 13 or Section 15(d) of
`
`the
`
`New York Stock Exchange
`Common Stock ($0.50 par value)
`Number of shares of Common Stock ($0.50 par value) outstanding as of January 31, 2013: 3,022,367,538.
`Aggregate market value of Common Stock ($0.50 par value) held by non-affiliates on June 30, 2012 based on closing price on June 30,
`2012: $126,837,000,000.
`Indicate by check mark if
`Act. Yes Í No ‘
`Indicate by check mark if
`Act. Yes ‘ No Í
`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 Í No ‘
`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 Í No ‘
`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. ‘
`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):
`Í
`Large accelerated filer
`
`‘
`Non-accelerated filer
`(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 ‘ No Í
`Documents Incorporated by Reference:
`
`Accelerated filer
`
`‘
`
`Smaller reporting company ‘
`
`Document
`
`Proxy Statement for the Annual Meeting of
`Shareholders to be held May 28, 2013, 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 1056
`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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Executive Officers of the Registrant
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`
`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 . . . . . . . . . . . . . . . . . . . . . . . . . . .
`(b) Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`
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`138
`138
`139
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`140
`140
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`140
`140
`141
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`141
`147
`148
`
`

`
`Item 1. Business.
`
`PART I
`
`Merck & Co., Inc. (“Merck” or the “Company”) is a global health care company that delivers innovative
`health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care
`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 four operating segments, which are the Pharmaceutical, Animal
`Health, Consumer Care and Alliances segments, and 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, generally 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 preventive 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 also has animal health operations that discover,
`develop, manufacture and market animal health products,
`including vaccines, which the Company sells to
`veterinarians, distributors and animal producers. Additionally, the Company has consumer care operations that
`develop, manufacture and market over-the-counter, foot care and sun care products, which are sold through
`wholesale and retail drug, food chain and mass merchandiser outlets, as well as club stores and specialty channels.
`
`the Company’s segments, see Item 7.
`information about
`information and other
`financial
`For
`“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. All other trademarks or services marks are those of their respective owners.
`
`Overview
`
`Merck continued to execute on its strategic priorities during 2012 despite facing several business
`challenges, including the August U.S. patent expiration for Singulair (montelukast), a medicine indicated for the
`chronic treatment of asthma and the relief of symptoms of allergic rhinitis. Worldwide sales were $47.3 billion in
`2012, a decline of 2% compared with 2011, including a 3% unfavorable effect from foreign exchange. Excluding
`the impact of foreign exchange, sales increased 1% reflecting growth of key products and within key geographic
`regions which offset the impact of the U.S. Singulair patent expiration. The Company also reduced operating
`expenses by efficiently managing costs through targeted reductions. In addition, the Company generated new
`clinical data and advanced certain key research and development pipeline programs.
`
`The Company’s four-part growth strategy is focused on; one, executing on its core business, which
`includes its largest markets, its core brands, new launch brands, and research and development efforts targeted at
`therapeutic areas with the greatest future patient demand and scientific opportunity; two, expanding geographically
`into high-growth markets; three, extending into complementary businesses of consumer care and animal health; and
`four, effectively managing costs while continuing to invest for future growth.
`
`Beginning with the Company’s sales performance in its largest markets during 2012, despite the adverse
`effects of the U.S. Singulair patent expiry which caused a significant and rapid decline in U.S. Singulair sales, sales
`in the United States were relatively flat compared to the prior year reflecting strong growth of key brands including
`Januvia (sitagliptin) and Janumet (sitagliptin/metformin HCI), treatments for type 2 diabetes, Zostavax (Zoster
`Vaccine Live), a vaccine to help prevent shingles (herpes zoster), Gardasil (Human Papillomavirus Quadrivalent
`[Types 6, 11, 16 and 18] Vaccine, Recombinant), a vaccine to help prevent certain diseases caused by four types of
`human papillomavirus (“HPV”), Victrelis (boceprevir), a treatment for chronic hepatitis C, and Isentress
`(raltegravir), an antiretroviral therapy for use in combination therapy for the treatment of HIV-1 infection. Turning
`to Europe and Canada, the Company continues to experience positive volume growth trends for many of its key
`
`1
`
`

`
`brands, including Victrelis, Januvia, Janumet, and Simponi (golimumab), a treatment for inflammatory diseases;
`however, this growth only partially offset increased generic erosion and the price declines stemming from the
`economic issues and related fiscal austerity measures in this region.
`
`With respect to research and development efforts, the Company continued the advancement of drug
`candidates through its pipeline in 2012. The Company currently has three candidates under review with the U.S.
`Food and Drug Administration (the “FDA”): MK-4305, suvorexant, an investigational treatment for insomnia;
`MK-8616, sugammadex sodium injection, a medication for the reversal of certain muscle relaxants used during
`surgery; and MK-0653C, an investigational combination of ezetimibe and atorvastatin for the treatment of primary
`or mixed hyperlipidemia. MK-8109, vintafolide, an investigational cancer candidate, is under review in the
`European Union (the “EU”). In addition, the Company currently has 16 candidates in Phase III development and
`anticipates filing a New Drug Application (“NDA”) or a Biologics License Application (“BLA”), as applicable,
`with the FDA with respect to several of these candidates in 2013.
`
`In December 2012, the Company announced the HPS2-THRIVE (Heart Protection Study 2-Treatment of
`HDL to Reduce the Incidence of Vascular Events) study of Tredaptive (extended-release niacin/laropipant) did not
`meet its primary endpoint. As a result, the Company does not plan to seek regulatory approval for the medicine in
`the United States. In January 2013, Merck began taking steps to suspend the availability of Tredaptive outside the
`United States. Also, on February 1, 2013, the Company announced that it had recently received and was reviewing
`safety and efficacy data from a Phase III study involving MK-0822, odanacatib, the Company’s investigational
`treatment for osteoporosis in post-menopausal women. As a result of its review of this data, the Company
`concluded that review of additional data from the previously planned, ongoing extension study was warranted and
`that filing an application for approval with the FDA should be delayed. As previously announced, the Company is
`conducting a blinded extension of the trial in approximately 8,200 women, which will provide additional safety and
`efficacy data. Merck now anticipates that it will file applications for approval of odanacatib in 2014 with additional
`data from the extension trial. The Company continues to believe that odanacatib will have the potential to address
`unmet medical needs in patients with osteoporosis.
`
`Merck continues to pursue opportunities for establishing external alliances to complement its substantial
`internal research capabilities, including research collaborations, as well as licensing preclinical and clinical
`compounds and technology platforms that have the potential to drive both near- and long-term growth. During
`2012, the Company completed a variety of transactions spanning different therapeutic areas and clinical stages
`including licensing agreements with Endocyte, Inc. (“Endocyte”) for vintafolide (MK-8109), an investigational
`cancer candidate, and with AiCuris for a portfolio of investigational medicines targeting human cytomegalovirus,
`including letermovir (MK-8228).
`
`Consistent with the second element of the Company’s strategy to expand geographically in high-growth
`markets such as Japan and key emerging markets, the Company continued to invest in these markets in 2012.
`Emerging market sales grew 4% in 2012, including a 4% unfavorable impact of foreign exchange, despite the loss
`of sales from Remicade (infliximab) and Simponi, treatments for inflammatory diseases, in markets relinquished to
`Johnson & Johnson (“J&J”) as part of the arbitration settlement agreement in 2011 as discussed below. China
`continues to be an important growth driver with sales exceeding $1.0 billion in 2012, representing growth of 25%
`over the prior year, including a 3% favorable effect from foreign exchange. Growth in Japan was 6% during 2012,
`tempered by generic competition and the biennial price cuts early in the year. Merck has entered into several
`transactions designed to strengthen its presence in the emerging markets in the longer term. The Company’s joint
`venture with Simcere Pharmaceutical Group in China began preliminary operations in late-2012.
`
`The third component of Merck’s strategy relates to the complementary businesses of Consumer Care and
`Animal Health. Merck’s Animal Health business continues as a solid contributor with 4% revenue growth in 2012,
`including a 5% unfavorable effect from foreign exchange, reflecting growth in the cattle, poultry, companion animal
`and swine product lines. Sales of Consumer Care products grew 6% in 2012, including a 1% unfavorable effect
`from foreign exchange, led by the Dr. Scholl’s franchise and higher sales of Coppertone, MiraLAX and Claritin.
`
`As noted, the last element of the Company’s strategy is to tightly manage costs while also investing for
`growth. Consistent with these efforts, Merck remains committed to driving continuous productivity improvements
`across the enterprise and continues to realize cost savings across all areas of the Company. These savings result
`
`2
`
`

`
`from various actions, including the Merger Restructuring Program discussed below, previously announced ongoing
`cost reduction activities, as well as from non-restructuring-related activities. As of the end of 2012, the Company
`had achieved its projected $3.5 billion in annual net cost savings from these activities since the merger with
`Schering-Plough Corporation (“Schering-Plough”) (the “Merger”).
`
`The global restructuring program that was initiated in conjunction with the integration of the legacy
`Merck and legacy Schering-Plough businesses (the “Merger Restructuring Program”) is intended to optimize the
`cost structure of the combined company. The workforce reductions associated with this plan relate to the
`elimination of positions in sales, administrative and headquarters organizations, as well as from the sale or closure
`of certain manufacturing and research and development sites and the consolidation of office facilities. The
`Company recorded total pretax restructuring costs of $951 million in 2012, $1.8 billion in 2011 and $1.8 billion in
`2010 related to this program. Costs associated with the Company’s restructuring actions are included in Materials
`and production costs, Marketing and administrative expenses, Research and development expenses and
`Restructuring costs. The restructuring actions under the Merger Restructuring Program are expected to be
`substantially completed by the end of 2013, with the exception of certain actions, principally manufacturing-related.
`Subsequent to the Merger, the Company has rationalized a number of manufacturing sites worldwide. The
`remaining actions under this program will result in additional manufacturing facility rationalizations, which are
`expected to be substantially completed by 2016. The Company now expects the estimated total cumulative pretax
`costs for this program to be approximately $7.2 billion to $7.5 billion. The Company estimates that approximately
`two-thirds of the cumulative pretax costs relate to cash outlays, primarily related to employee separation expense.
`Approximately one-third of the cumulative pretax costs are non-cash, relating primarily to the accelerated
`depreciation of facilities to be closed or divested. The Company expects the Merger Restructuring Program to yield
`annual savings by the end of 2013 of approximately $3.5 billion to $4.0 billion and annual savings upon completion
`of the program of approximately $4.0 billion to $4.6 billion.
`
`In November 2012, Merck’s Board of Directors raised the Company’s quarterly dividend to $0.43 per
`share from $0.42 per share.
`
`In February 2013, Merck reached an agreement in principle with plaintiffs to resolve two federal
`securities class-action lawsuits pending in the U.S. District Court for the District of New Jersey against Merck,
`Schering-Plough and certain of their current and former officers and directors (the “ENHANCE Litigation”). Under
`the proposed agreement, Merck will pay $215 million to resolve the securities class action against all of the Merck
`defendants and $473 million to resolve the securities class action against all of the Schering-Plough defendants. In
`connection with the settlement, Merck recorded a pretax and after-tax charge of $493 million in 2012 which reflects
`$195 million of anticipated insurance recoveries.
`
`Earnings per common share assuming dilution attributable to common shareholders (“EPS”) for 2012
`were $2.00, which reflect a net unfavorable impact resulting from acquisition-related costs and restructuring costs,
`as well as the charge related to the ENHANCE Litigation noted above. Non-GAAP EPS in 2012 were
`$3.82 excluding these items (see “Non-GAAP Income and Non-GAAP EPS” below).
`
`3
`
`

`
`Product Sales
`
`Sales of the Company’s products were as follows:
`($ in millions)
`
`Primary Care and Women’s Health
`Cardiovascular
`Zetia
`Vytorin
`Diabetes and Obesity
`Januvia
`Janumet
`Respiratory
`Singulair
`Nasonex
`Clarinex
`Dulera
`Asmanex
`Women’s Health and Endocrine
`Fosamax
`NuvaRing
`Follistim AQ
`Implanon
`Cerazette
`Other
`Maxalt
`Arcoxia
`Avelox
`Hospital and Specialty
`Immunology
`Remicade
`Simponi
`Infectious Disease
`Isentress
`PegIntron
`Cancidas
`Victrelis
`Invanz
`Primaxin
`Noxafil
`Oncology
`Temodar
`Emend
`Other
`Cosopt/Trusopt
`Bridion
`Integrilin
`Diversified Brands
`Cozaar/Hyzaar
`Propecia
`Zocor
`Claritin Rx
`Remeron
`Proscar
`Vasotec/Vaseretic
`Vaccines (1)
`Gardasil
`ProQuad/M-M-R II/Varivax
`Zostavax
`RotaTeq
`Pneumovax
`Other pharmaceutical(2)
`Total Pharmaceutical segment sales
`Other segment sales(3)
`Total segment sales
`Other(4)
`
`2012
`
`2011
`
`2010
`
`$ 2,567
`1,747
`
`$ 2,428
`1,882
`
`$ 2,297
`2,014
`
`4,086
`1,659
`
`3,853
`1,268
`393
`207
`185
`
`676
`623
`468
`348
`271
`
`638
`453
`201
`
`2,076
`331
`
`1,515
`653
`619
`502
`445
`384
`258
`
`917
`489
`
`444
`261
`211
`
`1,284
`424
`383
`244
`232
`217
`192
`
`3,324
`1,363
`
`5,479
`1,286
`621
`96
`206
`
`855
`623
`530
`294
`268
`
`639
`431
`322
`
`2,667
`264
`
`1,359
`657
`640
`140
`406
`515
`230
`
`935
`419
`
`477
`201
`230
`
`1,663
`447
`456
`314
`241
`223
`231
`
`2,385
`954
`
`4,987
`1,219
`623
`8
`208
`
`926
`559
`528
`236
`209
`
`550
`398
`316
`
`2,714
`97
`
`1,090
`737
`611
`—
`362
`610
`198
`
`1,065
`378
`
`484
`103
`266
`
`2,104
`447
`468
`296
`223
`216
`255
`
`1,631
`1,273
`651
`601
`580
`4,141
`40,601
`6,412
`47,013
`254
`$47,267
`
`1,209
`1,202
`332
`651
`498
`4,035
`41,289
`6,428
`47,717
`330
`$48,047
`
`988
`1,378
`243
`519
`376
`4,622
`39,267
`6,159
`45,426
`561
`$45,987
`
`(1) 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.
`(2) Other pharmaceutical primarily reflects sales of other human health pharmaceutical products, including products within the franchises not listed
`separately.
`(3) Reflects the non-reportable segments of Animal Health, Consumer Care and Alliances. The Alliances segment includes revenue from the Company
`relationship with AZLP.
`(4) 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.
`
`4
`
`

`
`Pharmaceutical
`The Company’s pharmaceutical products include therapeutic and preventive agents, generally sold by
`prescription, for the treatment of human disorders. Certain of the products within the Company’s franchises are as
`follows:
`
`Primary Care and Women’s Health
`Cardiovascular: Zetia (marketed as Ezetrol outside the United States); and Vytorin (ezetimibe/
`simvastatin) (marketed as Inegy outside the United States), cholesterol modifying medicines.
`
`Diabetes and Obesity:
`
`Januvia and Janumet for the treatment of type 2 diabetes.
`
`Singulair; Nasonex (mometasone furoate monohydrate), an inhaled nasal corticosteroid
`Respiratory:
`for the treatment of nasal allergy symptoms; Clarinex (desloratadine), a non-sedating antihistamine; Dulera
`Inhalation Aerosol (mometasone furoate/formoterol fumarate dihydrate), a combination medicine for the treatment
`of asthma; and Asmanex Twisthaler (mometasone furoate inhalation powder), an inhaled corticosteroid for first-line
`maintenance treatment of asthma in patients 4 years of age and older.
`
`Women’s Health and Endocrine: Fosamax (alendronate sodium) for the treatment and prevention of
`osteoporosis; NuvaRing (etonogestrel/ethinyl estradiol vaginal ring), a vaginal contraceptive ring; Follistim AQ
`(follitropin beta injection), a biological fertility treatment; Implanon (etonogestrel implant), a single-rod subdermal
`contraceptive implant; and Cerazette (desogestrel), a progestin only oral contraceptive.
`
`Other: Maxalt (rizatriptan benzoate), a product for acute treatment of migraine; Arcoxia (etoricoxib) for
`the treatment of arthritis and pain; and Avelox (moxifloxacin), which the Company only markets in the United
`States, a broad-spectrum fluoroquinolone antibiotic for the treatment of certain respiratory and skin infections.
`
`Hospital and Specialty
`Immunology: Remicade and Simponi for the treatment of inflammatory diseases.
`
`Isentress; PegIntron (peginterferon alpha-2b), a treatment for chronic hepatitis C;
`Infectious Disease:
`Cancidas (caspofungin acetate), an anti-fungal product; Victrelis; Invanz (ertapenem sodium) for the treatment of
`certain infections; Primaxin (imipenem and cilastatin sodium), an anti-bacterial product; and Noxafil (posaconazole)
`for the prevention of invasive fungal infections.
`
`Oncology: Temodar (temozolomide) (marketed as Temodal outside the United States), a treatment for
`certain types of brain tumors; and Emend (aprepitant) for the prevention of chemotherapy-induced and post-
`operative nausea and vomiting.
`
`(dorzolamide hydrochloride-timolol maleate ophthalmic solution) and Trusopt
`Other: Cosopt
`(dorzolamide hydrochloride ophthalmic solution), ophthalmic products; Bridion (sugammadex sodium injection), a
`medication for the reversal of certain muscle relaxants used during surgery; and Integrilin (eptifibatide), a treatment
`for patients with acute coronary syndrome.
`
`Diversified Brands
`Cozaar (losartan potassium) and Hyzaar (losartan potassium and hydrochlorothiazide), treatments for
`hypertension; Propecia (finasteride), a product for the treatment of male pattern hair loss; Zocor (simvastatin), a
`statin for modifying cholesterol; Claritin Rx (loratadine) for treatment of seasonal outdoor allergies and year-round
`indoor allergies; Remeron (mirtazapine), an antidepressant; Proscar (finasteride), a urology product for the
`treatment of symptomatic benign prostate enlargement; and Vasotec (enalapril maleate) and Vaseretic (enalapril
`maleate-hydrochlorothiazide), hypertension and/or heart failure products.
`
`Vaccines
`
`Gardasil; ProQuad (Measles, Mumps, Rubella and Varicella Virus Vaccine Live), a pediatric
`combination vaccine to help protect against measles, mumps, rubella and varicella; M-M-R II (Measles, Mumps and
`Rubella Virus Vaccine Live), a vaccine to help prevent measles, mumps and rubella; Varivax (Varicella Virus
`Vaccine Live), a vaccine to help prevent chickenpox (varicella); Zostavax; RotaTeq (Rotavirus Vaccine, Live Oral,
`Pentavalent), a vaccine to help protect against rotavirus gastroenteritis in infants and children; and Pneumovax
`(pneumococcal vaccine polyvalent), a vaccine to help prevent pneumococcal disease.
`
`5
`
`

`
`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 the treatment of fertility
`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; Zuprevo 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 Activyl/Scalibor/Exspot for protecting against bites from fleas, ticks, mosquitoes and sandflies.
`
`Slice parasiticide for sea lice in salmon; Aquavac/Norvax vaccines against
`Aquaculture Products:
`bacterial and viral disease in fish; Compact PD vaccine for salmon; and Aquaflor antibiotic for farm-raised fish.
`
`Consumer Care
`The Consumer Care segment develops, manufactures and markets over-the-counter, foot care and sun
`care products. Principal products in this segment include:
`
`Over-the-Counter Products: Claritin non-drowsy antihistamines; MiraLAX for relief of occasional
`constipation; Coricidin HBP decongestant-free cold/flu medicine for people with high blood pressure; Afrin nasal
`decongestant spray; and Zegerid OTC treatment for frequent heartburn.
`
`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 and dry oils.
`
`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 February 2012, the FDA approved Zioptan (tafluprost), a preservative-free prostaglandin analog
`ophthalmic solution for reducing elevated intraocular pressure in patients with open-angle glaucoma or ocular
`hypertension. Merck has exclusive commercial rights to tafluprost in Western Europe (excluding Germany), North
`America, South America, Africa, the Middle East, India and Australia. Zioptan is marketed as Saflutan in certain
`markets outside the United States. Also, in February 2012, the FDA approved Janumet XR, a new treatment for type
`2 diabetes that combines sitagliptin, which is the active component of Januvia, with extended-release metformin.
`Janumet XR provides a convenient once-daily treatment option for health care providers and patients who need help
`to control their blood sugar. In addition, in February 2012, the FDA approved Cosopt PF, Merck’s preservative-free
`formulation of Cosopt ophthalmic solution,
`indicated for the reduction of elevated intraocular pressure in
`appropriate patients with open-angle glaucoma or ocular hypertension.
`
`Joint Ventures
`
`AstraZeneca LP
`In 1982, Merck entered into an agreement with Astra AB (“Astra”) to develop and market Astra products
`in the United States. In 1994, Merck and Astra formed an equally owned joint venture that developed and marketed
`most of Astra’s new prescription medicines in the United States including Prilosec (omeprazole), the first in a class
`of medications known as proton pump inhibitors, which slows the production of acid from the cells of the stomach
`lining.
`
`6
`
`

`
`In 1998, Merck and Astra restructured the joint venture whereby Merck acquired Astra’s interest in the
`joint venture, renamed KBI Inc. (“KBI”), and contributed KBI’s operating assets to a new U.S. limited partnership
`named Astra Pharmaceuticals, L.P. (the “Partnership”), in exchange for a 1% limited partner interest. Astra
`contributed the net assets of its wholly owned subsidiary, Astra USA, Inc., to the Partnership in exchange for a 99%
`general partner interest. The Partnership, renamed AstraZeneca LP (“AZLP”) upon Astra’s 1999 merger with
`Zeneca Group Plc, became the exclusive distributor of the products for which KBI retained rights.
`
`The Company earns certain Partnership returns as well as ongoing revenue based