Merck & Co., the second-largest U.S. drugmaker, increased a share repurchase program by $5 billion, raising the total amount of stock that can be bought back to $6.4 billion.
Merck, based in Whitehouse Station, New Jersey, announced the new buyback program in a statement today. The drugmaker drew $10.8 billion in cash from operating activities last year, according to a regulatory filing. The company, which pays a quarterly dividend of 38 cents a share, earlier this month agreed to split sales for the arthritis drug Remicade with Johnson & Johnson (JNJ), ending a dispute that helped drive Merck’s stock down over the last year.
“We do find it encouraging,” Les Funtleyder, a fund manager and health strategist with Miller Tabak & Co. in New York, which holds Merck shares, said of the repurchase program in an e-mail today. “Now that Merck has resolved its case with J&J, it probably feels it has the visibility to deploy its capital.”
Merck rose 57 cents, or 1.6 percent, to $35.63 at 4 p.m. in New York Stock Exchange composite trading. The shares are down 1.1 percent this year.
Also today, Merck won a U.S. panel’s backing to sell its experimental hepatitis C drug. The medicine, boceprevir, is effective and safe enough to support approval, outside advisers to the Food and Drug Administration said today in an 18-0 vote in Silver Spring, Maryland.
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