Exterior view of the entrance to Merck’s headquarters in Rahway, New Jersey, on February 5, 2024.
Spencer Pratt | Getty Images
Merck First-quarter revenue and adjusted earnings reported Thursday beat expectations on strong sales of its blockbuster cancer drug Keyruda and vaccine products.
The pharmaceutical giant also raised and lowered full-year revenue and revised its profit forecast. Merck now expects 2024 sales to be between $63.1 billion and $64.3 billion, up from previous guidance of $6.27 to $64.2 billion.
The company expects full-year adjusted earnings per share of $8.53 to $8.65, up from its previous forecast of $8.44 to $8.59 per share.
The outlook includes a one-time charge of approximately 26 cents per share related to Merck get Harpoon Therapeutics in January. The company develops immune-based cancer drugs. The guidance also includes a negative impact of 30 cents per share from currency movements.
Merck’s first-quarter report compared with Wall Street expectations, according to a survey of analysts by London Stock Exchange Group (LSEG):
- Earnings per share: Adjusted $2.07, $1.88 expected
- Revenue: $15.78 billion, $15.2 billion expected
The company’s first-quarter net profit was $4.76 billion, or $1.87 per share. This compares with net income of $2.82 billion, or $1.11 per share, in the same period last year.
Excluding acquisition and restructuring costs, Merck’s first-quarter earnings per share were $2.07. Both adjusted and unadjusted profits for the period included charges related to the Harpoon deal.
Merck’s revenue this quarter was US$15.78 billion, an increase of 9% compared with the same period last year.
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 last month to treat progressive and life-threatening lung disease. Some analysts predict that Winrevair’s global sales could reach $5 billion by 2030.
Merck is also cutting costs in a new turnaround plan announced in February. These efforts are aimed at improving the manufacturing network of its pharmaceutical unit and animal health business.
The company took $246 million in restructuring-related charges in the first quarter, which were not included in adjusted results.
Pharmaceutical unit sales surge
Merck’s pharmaceutical division’s revenue in the first quarter was US$14.01 billion, an increase of 10% over the same period last year. The segment develops a broad range of medicines for multiple disease areas, including oncology and infectious diseases.
Merck’s immunotherapy Keytruda, used to treat several types of cancer, has driven much of that growth. Keytruda generated $6.95 billion in revenue during the quarter, up 20% from the same period last year.
Analysts had expected Keytruda sales of $6.71 billion, according to FactSet estimates.
Merck also reported growth in sales of Gardasil, a vaccine that prevents cancer from HPV, the most common sexually transmitted disease in the United States
Gardasil brought in sales of $2.25 billion, up 14% from the first quarter of 2023.
Another vaccine is called wax newansDrugs that prevent patients from contracting pneumococcal disease also saw strong growth during the quarter. Sales of this lens reached US$219 million, an increase of 106% compared with the same period last year.
Meanwhile, sales of Merck’s type 2 diabetes treatment drug Januvia were $670 million, down 24% from the same period last year. The company said the sales decline was primarily due to lower prices for the drug, lower demand in the United States and generic competition in several international markets.
Analysts had expected Januvia sales of $687.3 million, according to FactSet estimates.
Januvia is one of 10 drugs included in ongoing Medicare drug price negotiations, a policy created under the Inflation Reduction Act to make expensive drugs more affordable for seniors.
Sales of Merck’s Covid antiviral drug Lagevrio also fell 11% to $350 million in the quarter. Still, the total beat analysts’ sales expectations of $106.4 million, according to FactSet.
Demand for Lagevrio and other Covid products from companies like Pfizer and modern The number of cases fell sharply last year as case numbers and public concern about the virus declined from the peak of the pandemic.
Merck’s animal health unit, which develops vaccines and drugs for dogs, cats and cattle, had first-quarter sales of $1.51 billion. Compared with the same period last year, it grew only 1%.
In February, Merck said it would acquire Yilanke Animal Healthaquatic products business $1.3 billion in cash. The deal includes Elanco’s entire portfolio of aquatic species pharmaceuticals, vaccines and supplements, as well as two manufacturing plants and a research facility.
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