Merck Shares Plunged as it Reports 3rd Quarter Loss

On Friday, shares of Merck tumbled after reporting a quarterly loss due to the effects of a major cyber attack and costs connected to a drug joint venture with AstraZeneca.

Merck recorded a loss of $56 million in the third quarter, compared with profits in the year-ago period amounting to $2.2 billion.

Revenues dropped 2% to $10.3 billion.

The biggest hit came from a $2.35 billion charge that is connected to the AstraZeneca drug development and commercialisation venture, which will increase the use of the Lynparza drug, an oral remedy for treating tumours in breast, pancreatic and other cancers.

Merck also stated that a June cyberattack had led to $135 million in lost sales, plus an additional $175 million in expenses. Robert Davis, the Chief financial officer, said that the company anticipates a similar hit in the fourth quarter.

Merck has said that the incident disrupted its formulation and manufacturing operations and that some drug deliveries were delayed.

On the positive side, quarterly sales of the Keytruda anti-cancer drug of Merck’s exceed $1 billion for the first time.

The treatment, which is being introduced in markets around the world, is most regularly used in lung cancer. However, it is also regularly employed for melanoma, head, neck and bladder cancer, executives said on a conference call.

Merck also increased its full-year profit forecast range to $1.78 to $1.84 per share from the prior $1.60 to $1.72 per share because of a lower expected tax rate.

In afternoon trading, shares dropped 6% percent to $57.82 making it the biggest loser in the Dow.