The company outlined three broad areas where it expects to improve its performance. First, of course, is cutting costs and allocating resources where potential paybacks are largest. Under this heading comes maintaining a “high level of cash returned to shareholders” in dividends and stock buybacks.
Second, Merck says it plans to sharpen its commercial focus and increase its geographic focus on 10 prioritized markets: the United States, Japan, France, Germany, Canada, the United Kingdom, China, Brazil, Russia and Korea.
Third, the company will prioritize its R&D efforts “to focus on [drug] candidates capable of providing unambiguous, promotable advantages to patients and payers.”
Merck reiterated its full-year adjusted earnings per share guidance of $3.45 to $3.55. The company expects to take restructuring charges totaling $900 million to $1.1 billion in its third quarter.
Merck’s shares are up 2.7% in premarket trading this morning, at $48.95 in a 52-week range of $40.02 to $50.16. The Thomson/First Call consensus price target for the shares is around $51.80.
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