Merck Anticipates Full-Year 2005 Earnings Per Share Range of $2.42 to $2.52; Reaffirms Fourth-Quarter and Full-Year 2004 EPS Guidance

Business Wire, Dec 8, 2004

WHITEHOUSE STATION, N.J. -- Merck & Co., Inc.

--Merck expects continued growth in newer franchises, ZETIA and recently launched VYTORIN

--Merck plans to file several candidates currently in Phase III, including treatment for Type 2 diabetes and three vaccines, in 2005

Merck & Co., Inc. today announced that it anticipates full-year 2005 earnings per share (EPS) of $2.42 to $2.52. Merck also reaffirmed its fourth-quarter and full-year 2004 EPS guidance.

Merck anticipates fourth-quarter 2004 EPS of $0.48 to $0.53, which includes the impact of approximately $700 to $750 million in foregone sales of VIOXX and potential additional fourth-quarter costs for the withdrawal of VIOXX. As a result, Merck anticipates full-year 2004 EPS guidance of $2.59 to $2.64, which includes the expectation that the impact of the withdrawal will negatively affect full-year EPS by $0.50 to $0.55.

Merck Financial Guidance for 2005 Anticipates Continued Growth for Newer Products

In 2005, Merck plans to continue growth in newer franchises, extend the recent successful launches of ZETIA and VYTORIN, launch new products, file several products currently in Phase III and prepare for their launch.

During the second half of 2005, Merck plans to submit three vaccines for FDA approval. The three vaccines are: ROTATEQ, a vaccine to protect against rotavirus, a highly contagious virus that causes gastroenteritis and results in the hospitalization of nearly 50,000 children under age 5 each year in the United States; a vaccine to reduce the incidence of human papillomavirus (HPV) infection and the associated development of cervical cancer - the second-leading cause of cancer deaths in women - and genital warts; and a vaccine to reduce the pain that accompanies shingles, which afflicts 1 million American adults each year.

The company recently announced submission to the U.S. Food and Drug Administration (FDA) of PROQUAD, a new childhood vaccine that adds chickenpox to the existing measles, mumps and rubella vaccine. Merck also anticipates the submission later this month of muraglitazar, the first-in-class dual PPAR agonist for the treatment of Type 2 diabetes in which Merck is in collaboration with Bristol-Myers Squibb.

The company also announced 2005 guidance for the following items:

Worldwide net sales will be driven by the company's major in-line products, including the impact of new studies and indications. Sales forecasts for those products for 2005 are as follows:

WORLDWIDE
PRODUCT                                            2005 NET SALES
-------                                            --------------
ZOCOR (Cholesterol modifying)                   $4.1 to $4.4 billion
FOSAMAX (Osteoporosis)                          $3.3 to $3.6 billion
COZAAR/HYZAAR (Hypertension)                    $2.9 to $3.2 billion
SINGULAIR (Respiratory)                         $2.9 to $3.2 billion
Other reported products*                        $5.7 to $6.2 billion

* Other reported products comprise: AGGRASTAT, ARCOXIA, CANCIDAS,
    COSOPT, CRIXIVAN, EMEND, INVANZ, MAXALT, PRIMAXIN, PROPECIA,
    PROSCAR, STOCRIN, TIMOPTIC/TIMOPTIC XE, TRUSOPT, Vaccines and
    VASOTEC/VASERETIC.

--Under an agreement with AstraZeneca (AZN), Merck receives revenue at predetermined rates on the U.S. sales of certain products by AZN, most notably NEXIUM. In 2005, Merck anticipates these revenues to be approximately $1.4 to $1.6 billion.

--The income contribution related to the Merck and Schering-Plough collaboration is expected to be positive in 2005. Equity Income from Affiliates includes the results of the Merck and Schering-Plough collaboration combined with the results of Merck's other joint venture relationships. Equity Income from Affiliates is expected to be approximately $1.3 to $1.5 billion for 2005.

--Merck continues to expect that manufacturing productivity will offset inflation on product costs.

--Product gross margin percentage is estimated to be approximately 77 to 78 percent for the full year 2005.

--Research and Development expense (which excludes joint ventures) is estimated to continue at the same level as the full-year 2004 expense. The full-year 2004 level referred to includes acquired R&D expenses in that year.

--Marketing and Administrative expense is anticipated to increase at a low single-digit percentage growth rate over the full-year 2004 level. The full-year 2004 level referred to excludes restructuring costs relating to previously announced position eliminations and costs related to the withdrawal of VIOXX in that year.

--The consolidated 2005 tax rate is estimated to be approximately 27.5 to 28.5 percent.

--Merck plans to continue its stock buyback program in 2005. As of Sept. 30, $8.8 billion remains under the current buyback authorizations approved by Merck's Board of Directors.

This guidance does not reflect the establishment of reserves for any potential liability for settlements relating to the VIOXX lawsuits. This guidance also does not reflect any changes currently under consideration by the Financial Accounting Standards Board in the way Merck accounts for stock options. Furthermore, this guidance does not include any one time impacts that may result from the repatriation of permanently reinvested off-shore earnings under the American Jobs Creation Act.