Merck & Co API operations hit by cyberattack yet to restart production

By Gareth Macdonald

- Last updated on GMT


Related tags Active pharmaceutical ingredient Pharmacology

API operations hit by the Petya cyberattack have not been restored according to Merck & Co Inc, which expects difficulties fulfilling some product orders and lower 2017 profits partly due to the hack. 

The US drug manufacturer provided the update in its second quarter report on July 28​. 

It explained that while pharmaceutical packaging and formulation operations are mostly back up and running, it is still working to restore its active pharmaceutical ingredient (API) production.

The company is in the process of restoring its active pharmaceutical ingredient operations but is not yet producing bulk product​” it said.

Supplies of drug actives for “key products” ​such as Keytruda, ​JanuviaandZepatier will not be impacted. However, Merck said it is likely to encounter “temporary delays in fulfilling orders for certain other products in certain markets​.” 

The firm declined to provide additional information, telling us "we are not providing any additional detail at this time​."


Merck reported it had been hit by the cyberattack in a tweet on June 27​. The firm confirmed the attack in a tweet​ the following day.

The cyberattack – which impacted Merck along with a number of international corporations - was caused by a virus called Petya – also sometimes called NotPetya – that shut down computers and demanded users pay a ransom to unlock them.

No appreciable impact in Q2…

In Merck’s earnings call CEO Kenneth Frazier said: “The cyberattack did not have any appreciable impact on our second quarter results.”

Merck’s revenue was $9.9bn, up 1% on the year earlier quarter. Drug revenue increased just 1% to $8.8bn, with the contribution from new products and vaccines being largely offset by the impact of generic competition on certain products and lower diabetes product sales.

Net income for the period was $1.95bn, up from $1.21bn in the second quarter last year.

…but 2017 profit forecast cut partly due to cyberattack

Merck cited the ongoing impact of the cyber-attack, along with costs associated with its collaboration with AstraZeneca, as the basis for its decision to cut its full year 2017 profit forecast.

The firm said: “The financial outlook below reflects the current state of the company’s manufacturing operations as well as its plans to restore those operations and potential costs associated with the remediation efforts.”

It cut its full-year 2017 GAAP EPS range to be between $1.60 and $1.72.

However, Merck also narrowed and raised its full-year 2017 revenue range to be between $39.4bn and $40.4bn

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