Marketing and administrative expenses, on a non-GAAP basis, were $3.2 billion in the second quarter of 2012, a decrease from $3.4 billion in the second quarter of 2011. The decrease was primarily due to ongoing productivity measures.
Research and development (R&D) expenses, on a non-GAAP basis, were $2.0 billion in the second quarter of 2012, an increase from $1.9 billion in the second quarter of 2011. The increase primarily reflects the $120 million upfront payment as part of the Endocyte Inc. transaction.
Equity income from affiliates was $142 million for the second quarter, which primarily reflects the performance of AZLP and Sanofi Pasteur MSD.
Other (income) expense, net was $103 million of expense in the second quarter of 2012, compared to $121 million of expense in the second quarter of 2011.Key Developments The company noted the following developments:
- Pivotal Phase III data were presented that showed suvorexant, an investigational treatment for insomnia, improved patients' ability to fall asleep and stay asleep, achieving significance on 15 of 16 primary endpoints. Merck anticipates filing regulatory applications for approval by the end of 2012;
- Primary efficacy outcomes were met in the Phase III trial of odanacatib, Merck's investigational cathepsin-K inhibitor for osteoporosis, and Merck announced that the study is being concluded early. Merck expects to file regulatory applications for approval in the United States and Europe in the first half of 2013 and Japan in the third quarter of 2013;
- Merck continued to advance plans for four additional major regulatory filings by end of 2013 including: BRIDION (sugammadex), a neuromuscular blocker reversal agent; V503, a nine-valent vaccine for HPV; TREDAPTIVE (extended-release niacin/laropiprant), a novel candidate for multiple lipid parameters; and vintafolide, a small molecule drug conjugate for ovarian and other cancers (European Union filing);
- Merck previously announced in late March 2012 that the independent Data Safety Monitoring Board of the IMPROVE-IT study planned to review data from the study again in approximately nine months. That review has been scheduled for March 2013, at which point nine months of additional data will have been adjudicated;
- Five-year data were presented from the STARTMRK study, in which the regimen including ISENTRESS demonstrated better efficacy and long-term safety and tolerability versus the regimen including efavirenz; and
- Merck and AstraZeneca amended their option agreement related to AZLP. As a result, AstraZeneca will not acquire Merck's stake in AZLP in 2012 and has a new option to acquire Merck's interest in June 2014.
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