Merck results beat expectations as top drugs Keytruda, Gardasil post strong sales

The brand for Merck & Co. is displayed on a display screen on the New York Stock Exchange (NYSE) in New York City, New York, U.S., November 17, 2021. 

Andrew Kelly | Reuters

Merck on Thursday reported fourth-quarter income and adjusted earnings that topped estimates as it noticed strong demand for its blockbuster most cancers drug Keytruda and HPV vaccine Gardasil. 

The pharmaceutical large posted a internet quarterly loss, nonetheless, as a result of beforehand introduced costs related to a deal the corporate struck in October with the Japanese drugmaker Daiichi Sankyo to co-develop three extremely sought-after cancer treatments.

Here’s what Merck reported for the fourth quarter in contrast with what Wall Street was anticipating, based mostly on a survey of analysts by LSEG, previously recognized as Refinitiv:

  • Earnings per share: 3 cents adjusted vs. a lack of 11 cents per share anticipated
  • Revenue: $14.63 billion vs. $14.50 billion anticipated

The firm posted a internet lack of $1.23 billion, or 48 cents per share, for the quarter. That compares to a internet revenue of $3.02 billion, or $1.18 per share, in the course of the year-earlier interval. 

Excluding acquisition and restructuring prices, Merck earned 3 cents per share for the fourth quarter. The firm’s results embody a cost of $1.69 per share associated to the Daiichi Sankyo deal. 

Merck raked in $14.63 billion in income for the quarter, up 6% from the identical interval a yr in the past. 

Those results come as Merck exhibits vital progress in making ready for Keytruda’s patent expiration in 2028, with a handful of latest offers underneath its belt and key drug launches forward. The lack of unique rights to the drug will possible imply its sales will fall, forcing the corporate to attract income from elsewhere.

The firm additionally issued its full-year 2024 steering, which was typically consistent with expectations. Merck expects income to come back in between $62.7 billion and $64.2 billion and adjusted earnings to be $8.44 to $8.59 per share this yr. 

Analysts surveyed by LSEG anticipated Merck to forecast full-year sales of $63.52 billion and adjusted earnings of $8.42 per share. 

That adjusted earnings outlook features a one-time cost of roughly 26 cents per share associated to Merck’s acquisition of Harpoon Therapeutics, which develops immune-based most cancers drugs, earlier this month.

Merck additionally introduced a brand new restructuring program for 2024, which goals to enhance the manufacturing community of each its pharmaceutical division and animal well being enterprise. Merck recorded costs of $190 million associated to this system within the fourth quarter, which is excluded from its adjusted results.

That brings Merck’s complete restructuring costs for the interval to $401 million. That quantity additionally contains costs from a restructuring program the corporate launched in 2019.

Pharmaceutical enterprise posts development

Merck’s pharmaceutical enterprise, which develops a variety of drugs for a number of illness areas, booked $13.14 billion in income in the course of the quarter. That’s up 8% from the identical interval a yr in the past. 

Merck’s immunotherapy Keytruda, which is used to deal with a number of varieties of most cancers, largely fueled the expansion.

The drug booked $6.61 billion in income, up 21% from the year-earlier quarter. Analysts had been anticipating $6.41 billion in Keytruda sales, in accordance with estimates from FactSet. 

Merck additionally noticed a bounce in sales of Gardasil, a vaccine that stops most cancers from HPV, the commonest sexually transmitted an infection within the U.S.

Gardasil raked in $1.87 billion in sales, up 27% from the fourth quarter of 2022. That’s barely under the $1.92 billion that analysts had been anticipating, in accordance with FactSet estimates. 

Merck’s experimental Covid-19 therapy tablet, referred to as molnupiravir

MERCK & CO INC | through Reuters

Meanwhile, sales of its Covid antiviral tablet Lagevrio fell to $193 million in the course of the interval, down 77% from the $825 million reported for the fourth quarter of 2022. Still, the drug blew previous analysts’ expectations of $69 million in sales, in accordance with FactSet. 

That’s no shock: Demand has plummeted for Lagevrio and different Covid merchandise from corporations such as Pfizer and Moderna over the past yr, as circumstances and concern concerning the virus dwindled from their pandemic peaks.

Merck’s Type 2 diabetes therapy, Januvia, additionally noticed sales fall to $787 million in the course of the quarter, down 14% from the identical interval a yr in the past. The firm mentioned competitors from cheaper generic drugs exterior of the U.S., notably in Europe, and decrease demand within the U.S. reduce into the sales.

That complete nonetheless got here in increased than analysts’ estimate of $732.3 million for the interval, in accordance with FactSet. 

Januvia is one in all ten drugs that can be topic to Medicare drug price negotiations, a coverage underneath the Inflation Reduction Act that goals to make pricey drugs extra reasonably priced for seniors. Also on Thursday, Medicare is making preliminary value affords for every of these drugs. 

Merck’s animal well being division, which develops vaccines and medicines for canine, cats and cattle, posted $1.28 billion in sales, up 4% from the identical interval a yr in the past.

The firm mentioned increased demand for companion animal merchandise, such as the flea and tick therapy Bravecto, drove the rise.

Merck will maintain a conference call at 9 a.m. ET on Thursday.

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