Annual profits

Merck says cyberattack will hurt annual profits

Drug and vaccine maker Merck & Co. Inc. said it suffered a global disruption in its operations when it was the victim of an international cyber attack in June, halting production of its drugs, which will hurt its bottom line for the rest of the year.

The company said it does not yet understand the full extent of the impact as it is in the process of restoring its manufacturing operations. It disclosed the attack last month but did not disclose the shutdown at the time, Reuters reported.

Merck said it is confident it will be able to maintain a continuous supply of its best-selling and life-saving drugs, including the cancer drug Keytruda, the diabetes drug Januvia and the hepatitis drug. C Zepatier. But he warned of temporary delays in the delivery of other products, which he did not identify.

“Full recovery from the cyberattack will take some time, but we are making steady progress,” CEO Ken Frazier said on a conference call as the company released its quarterly results.

Merck is the latest in a series of companies to reveal that operations were significantly disrupted by the NotPetya attack, which devastated businesses and government agencies in Ukraine a month ago and gradually spread throughout the whole world. Security sources said they expected more people to come forward in the coming weeks.

Parcel delivery company FedEx Corp., shipping giant AP Moller-Maersk, parent chocolate company Cadbury Mondelez International Inc. and UK consumer goods maker Reckitt Benckiser also said their operations were disrupted by the attack.

At least four other large U.S. and European companies have also experienced massive outages due to NotPetya, but have delayed their IPOs as they seek to restore systems, said a person familiar with the efforts. The source declined to identify the victims, saying the companies were not ready to go public.

NotPetya is a destructive virus capable of spreading quickly over computer networks, crippling computers by encrypting hard drives so that machines cannot function.

The attacks caused massive disruption to industrial networks that rely on computers, as companies have to individually replace damaged drives, a labor-intensive process.

The impact on Merck was particularly troubling as it affected the company’s ability to produce drugs, said Joshua Corman, director of the Cyber ​​Statecraft Initiative at the Atlantic Council.

Merck’s quarterly profit exceeded analysts’ estimates as demand for the best-selling cancer drug Keytruda increased and the company cut spending.

Net income reached $ 1.95 billion, or 71 cents per share, in the second quarter, from $ 1.21 billion, or 43 cents per share, a year earlier.

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