Exterior view of the entrance to Merck’s headquarters in Rahway, New Jersey, on February 5, 2024.
Spencer Pratt | Getty Images
Merck Thursday report Third-quarter revenue and adjusted earnings beat expectations on strong sales of the company’s best-selling cancer drug Keytruda, recently launched treatments and its animal health business.
But sales of Merck’s vaccine to prevent cancer from HPV, the most common sexually transmitted infection in the United States, fell short of expectations for another quarter. Gardasil vaccine revenue fell 11% compared with the same period last year, mainly due to lower demand in China.
The pharmaceutical giant narrowed its full-year sales forecast to $63.6 billion to $64.1 billion from the previous range of $63.4 billion to $64.4 billion.
Merck also lowered its adjusted profit guidance to $7.77 per share from $7.72 per share, compared with its previous forecast of $7.94 to $8.04 per share. The updated outlook reflects a one-time charge of 24 cents per share related to business development transactions for Curon Biopharmaceutical and Daiichi Sankyo.
This is Merck’s report Season 3 Compared to Wall Street expectations, according to a survey of analysts by LSEG:
- Earnings per share: Adjusted $1.57, expected $1.50
- income: $16.66 billion vs. $16.46 billion expected
Merck’s third-quarter net income was $3.16 billion, or $1.24 per share. This compares with net income of $4.75 billion, or $1.86 per share, in the same period last year.
Excluding acquisition and restructuring costs, Merck’s earnings per share for the three months were $1.57.
The company’s third-quarter revenue was $16.66 billion, an annual increase of 4%.
The results come as Merck makes substantial progress in preparing for Keytruda’s patent expiration in 2028.
But Merck has some new deals and key drug launches that will help it offset those losses. These include Winrevair, a drug approved in the United States in March to treat progressive and life-threatening lung disease.
Capvaxive, a vaccine designed to protect adults against pneumococcal infection, a bacteria that can cause severe illness and lung infections, was approved in the United States in June.
Pharmaceutical sector beats expectations
Merck’s pharmaceutical unit, which develops a variety of drugs, had third-quarter revenue of $14.94 billion, up 5% from the same period last year.
The company’s immunotherapy drug Keytruda generated revenue of $7.43 billion in the quarter, a 17% increase from the same period last year. Analysts had expected Keytruda sales of $7.33 billion, according to StreetAccount estimates.
The growth was driven by increased use of Keytruda to treat early-stage cancer, as well as strong demand for the drug to treat metastatic cancer that has spread to other parts of the body.
Gardasil sales were $2.31 billion, down 11% from the third quarter of 2023. U.S. sales growth partially offset the impact
That was below analysts’ expectations of $2.51 billion, according to StreetAccount.
Winrevair reported third-quarter revenue of $149 million after receiving approval in March. Analysts had expected sales of the therapy to reach $127 million.
Sales of the company’s type 2 diabetes treatment Januvia were $482 million, down 42% from the same period last year. Merck said the decline was primarily due to the drug’s lower price in the United States and generic competition in several countries.
StreetAccount said analysts had expected sales of the drug to reach $610 million.
Januvia is one of 10 drugs targeted in ongoing Medicare drug price negotiations, a policy aimed at making expensive drugs more affordable for seniors. These price negotiations are an important provision of the President’s Joe Biden’s inflation-cutting bill ends in early August.
Sales of Merck’s Covid antiviral drug Lagevrio also fell 40% in the quarter to $383 million.
That still beat analysts’ expectations for sales of $124.2 million, according to StreetAccount.
Merck’s animal health unit, which develops vaccines and drugs for dogs, cats and cattle, had third-quarter sales of $1.49 billion. That was a 6% increase from a year earlier and slightly higher than analysts polled by StreetAccount had expected.
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