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Drugmaker Merck & Co said Thursday it will take an after-tax charge of $1.9bn in connection with a research programme for a drug being eyed to treat hepatitis C.
The drug – MK-3682, uprifosbuvir – was obtained by Merck in its 2014 acquisition of Idenix Pharmaceuticals, which it snapped up in hopes of bolstering its position in the race to develop a new generation of hepatitis C treatments.
Merck said in a regulatory filing on Thursday that it “determined that recent changes to the product profile, as well as changes to its expectations for pricing and the market opportunity, taken together constituted a triggering event that required the Company to evaluate the uprifosbuvir intangible asset for impairment”.
As a result, Merck said it was recognising a pre-tax impairment charge of $2.9bn, which shakes out to $1.9bn after taxes and will be reflected in its 2016 results.
The company’s previously reported earnings per share were lowered from 42 cents to a loss of 22 cents, with full-year 2016 earnings per share reduced from $2.04 to $1.41. The revisions reflect the impact of the charge, which was partly offset by other adjustments, the company said.
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