This summary is based on the second quarter fiscal 2008 earnings call conducted by Merck & Co. (MRK: chart) on July 21, 2008.

Management:

- Chairman, President and CEO: Richard T. Clark
- EVP and President, Global Human Health: Kenneth C. Frazier
- EVP and CFO: Peter N. Kellogg
- Investor Relations: Eva Boratto

Key Investors Issues

- Revenue was down 1%, to $6.05 billion from $6.1 billion in the prior year
- Earnings were $1.77 billion or 86 cents per share, up 5% over $1.68 billion or 77 cents a share in the prior year.
- The respiratory joint venture was terminated during the period, which will result in the payment by Merck of $105 million to Schering-Plough.

Half Year Highlights:

- Sales were flat year on year at $11.8 billion
- Net income rose 50% to $5.1 billion or $2.34 a share, from $3.4 billion or $1.55 a share in 2007.

Second Quarter Highlights

Revenue was down 1%, to $6.05 billion from $6.1 billion in the prior year despite the international business, aided by the prevailing exchange rates, continuing to perform very well, increasing by 12%.

- Revenue performance reflects continued strong growth of a number of recently launched new products, offset by challenges to key brands, such as GARDASIL and SINGULAIR.
- Results were also impacted by the continued loss of marketing exclusivity for FOSAMAX.
- The firm continues to drive growth around the world at the launches of JANUVIA, JANUMET, ISENTRESS and GARDASIL roll out.

Earnings were $1.77 billion or 86 cents per share, representing growth of 5% over $1.68 billion or 77 cents a share in the prior year, reflecting continued efforts to create a leaner, more cost effective and customer-focused operating model.

- Marketing and admin expenses excluding the legal defense reserve in the base period, was up 3% versus the second quarter 2007, with the year-over-year increase solely attributable to the impact of exchange.
- In May, Merck announced plans to reduce the size of its U.S. sales force by 1200 physicians as part of efforts to optimizing the cost base and improve effectiveness and efficiency across all aspects of the business.

Equity income was down year-over-year due to a 22% or $100 million decline in equity income contribution from the Merck/Schering-Plough joint venture.

- Additionally, the respiratory joint venture was terminated during the period, which will result in the payment by Merck of $105 million to Schering-Plough.
- Contributions in the AstraZeneca joint venture were a $154 million lower versus prior year, attributable to the previously disclosed events surrounding the JV restructuring that occurred toward the end of the first quarter this year.

Product Performance:

- The firm continued to make progress in attempts to reduce the global burden of cervical cancer with GARDASIL.
- Merck sales were $326 million, a 9% decrease when compared to the second quarter of last year.
- In addition, the vaccine joint venture Sanofi Pasteur-MSD recorded end market sales for GARDASIL of $234 million.
- Global end market sales for GARDASIL increased 28% versus the prior year, driven by the continued roll out of GARDASIL in Europe.

In addition, the firm recently developed and launched new DTC ads, an interactive way of portal.

- In the third quarter, it is planning to launch additional healthcare provider and consumer initiatives to drive increased immunization in the 19 to 26 year old cohort.
- Sales of SINGULAIR were down 1% due to a decline in the U.S. business, partially offset by continued growth outside the U.S.
- U.S. prescriptions, that''s TRX were down approximately 8% versus second quarter of 2007, while the overall respiratory market, which is the combined allergy and asthma market, ex-ZYRTEC was down 3%.
- Ex-U.S. sales of SINGULAIR grew 15%, driven by continued growth in Japan, the second largest market for SINGULAIR worldwide.

In Japan, the successful launch of the allergic rhinitis indication in the spring of 2008, and the introduction of the oral granules formulation for pre-school age children since late 2007 are contributing to the growth.

- JANUVIA and JANUMET, two of the newest growth drivers, realised global revenue of $406 million, up 23% sequentially.
- In the U.S., JANUVIA continues to be the second leading branded oral anti-diabetic agent in terms of new prescription share.
- Recent data presented at ADA, including a compelling analysis comparing JANUVIA versus sulfonylureas, which showed treatment with JANUVIA dramatically lowered hypoglycemia compared to treatment with FFUs.

Based on post-marketing experience for JANUVIA and with over $5 million prescriptions written in the U.S. since launch, the firm continues to be extremely confident in the efficacy and safety profile for JANUVIA and JANUMET.