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Thursday February 26, 11:28 am Eastern Time
S&P affirms Merck & Co ratings
(Press release provided by Standard & Poor's).
NEW YORK, Feb 26 - Standard & Poor's today assigned its triple-'A' rating to Merck & Co. Inc.'s $500 million senior notes due
2028, which are being drawn down from a Rule 415 shelf registration.
Standard & Poor's affirmed its triple-'A' senior debt and corporate credit ratings and its 'A-1'-plus commercial paper ratings on the
company.
The rating actions reflect the company's cash generation in excess of ongoing needs derived from its leading position in highly
profitable pharmaceutical markets.
Merck has a well-diversified position in the pharmaceutical field, with nine products attaining an annual sales rate of more than
$500 million.
Strong cash flow from these and other high-margined products fund one of the industry's largest new product efforts, with
research and development spending at an annual rate in excess of $1.7 billion.
Merck is benefiting from the increasing contributions of its newer products, including cardiovasculars Zocor, Cozaar, and Hyzaar;
osteoporosis treatment Fosamax; and the HIV inhibitor Crixivan.
This, together with additional product introductions, mitigates concern regarding the loss of patent protection on a number of other
important drugs in the next several years.
Product prospects are aided by the establishment of joint ventures with other companies to enhance Merck's pharmaceutical
research, consumer marketing, and participation in the vaccine and animal health fields.
Through Merck-Medco Managed Care, a manager of pharmacy benefits that attempts to contain the overall cost of disease
treatment, Merck aims to bolster its relationship with employers, insurers, and other large third-party drug purchasers.
Overall performance for Merck remains strong, with returns on cash-adjusted capital above 45%.
OUTLOOK: STABLE
Merck's conservative financial policy, evidenced by cash and investments that exceed debt, contributes to its ability to execute
large share repurchase programs without affecting its credit quality, Standard & Poor's said. |
