Merck Strange R&D Increase

Merck (MRK) announced Q2 results. Revenues are down 3% but costs are down even more. Margins have improved in the face of declining sales which means production costs are down dramatically, Marketing and admin costs are down by 10%. R&D costs are up 19% which of course looks excellent until we all realize that 2009 R&D includes $108 million of global restructuring costs. So basically they fired a lot of the brains that will drive tomorrows revenues.