When Merck (MRK) spent $3.9bn (£3.13bn) acquiring Idenix Pharmaceuticals in 2014, the main attraction was its hepatitis C drug, uprifosbuvir. Hepatitis is a major area of development for pharmaceutical groups globally, and the acquisition was meant to help give Merck a fighting chance in the race to develop new-generation drugs for the illness.
But the market opportunity for uprifosbuvir is perhaps not as attractive as Merck had envisioned. The group now believes the drug's intangible asset value was too high and has taken a $1.9bn after-tax charge due to "recent changes to the product profile, as well as changes to its expectations for pricing and the market opportunity". The group has restated previously reported earnings as a result of this write-down, with full-year EPS reduced from $2.04 to $1.41.
