Merck reports profits, warns of layoffs

NEW YORK, July 30 (AFP): Pharmaceuticals giant Merck said Friday that its second-quarter profit nearly tripled to US$2.02 billion, meeting analysts' expectations, but it also warned of steep layoffs ahead. The New Jersey-based company is seeking to cut billions of dollars in costs and eliminate redundancies stemming from its $49 billion acquisition of rival Schering-Plough in 2009. It also faces the imminent threat of patents expiring on key drugs, notably top-selling allergy medicine Singulair. Merck's net income was $2.02 billion in the second quarter, up from $752 million during the same period last year, the company said in a quarterly earnings report. Total revenues in April-June were $12.15 billion, a 7.0 per cent increase from a year ago, Merck said. Earnings per share excluding special items came in at 95 cents, which matched the consensus forecast of Wall Street analysts. "Double-digit growth from key products, and successful new product launches in markets worldwide led to Merck's strong second quarter results," chief executive Kenneth Frazier said in a statement. Merck said it would cut its workforce by 12-13 per cent by 2015, compared to the end-of-2009 level, meaning that from 12,000 to 13,000 employees would lose their jobs. However the company pledged to add workers in strategic areas such as emerging markets. "Merck is taking these difficult actions so that we can grow profitably and continue to deliver on our mission well into the future," said Frazier. "The environment we operate in is changing rapidly and dramatically, and these steps will help us more efficiently serve customers and patients around the world."