Merck reported second-quarter revenue and adjusted profit on Tuesday that beat Wall Street expectations, reflecting strong sales of its hit cancer drug Keytruda, in addition to other treatments in its oncology and vaccines portfolio and a newly launched cardiovascular drug.
The pharmaceutical giant also raised its full-year revenue forecast to $63.4 billion to $64.4 billion as demand for key products, particularly cancer drugs, has increased. That's only barely higher than the $63.1 billion to $64.3 billion forecast the corporate gave in April.
Merck lowered its adjusted earnings forecast to a variety of $7.94 to $8.04 per share, from a previous forecast of $8.53 to $8.65 per share. This updated forecast takes under consideration one-time costs of 26 cents and 51 cents per share for the acquisitions of Harpoon therapeutics And EyeBiosaid Merck.
Nevertheless, the corporate's shares lost greater than 6 percent on Tuesday.
Here is what Merck is doing for the second quarter in comparison with Wall Street expectations based on an analyst survey conducted by LSEG:
- Earnings per share: USD 2.28 adjusted versus USD 2.15 expected
- Revenue: $16.11 billion in comparison with expected $15.84 billion
The pharmaceutical company reported a net profit of $5.46 billion, or $2.14 per share, within the second quarter. In the identical period last 12 months, the corporate reported a net lack of $5.98 billion, or $2.35 per share. This also included costs related to the acquisition of Prometheus Biosciences.
Excluding acquisition and restructuring costs, the corporate earned $2.28 per share within the three-month period.
Merck reported sales of $16.11 billion for the quarter, up 7% from the identical period last 12 months.
The results come at a time when Merck is preparing to offset losses from the expiration of the Keytruda patent in 2028 by signing some recent contracts and bringing key medicines to market.
These include Winrevair, a drug approved within the United States in March to treat a progressive and life-threatening lung disease. Some analysts estimate that global sales of Winrevair could reach $5 billion by 2030.
It also includes Capvaxiva vaccine to guard adults against a bacterium known equivalent to pneumococci, which might cause serious illness and lung infections. The vaccine was approved within the US last month.
Sales of pharmaceuticals exceed estimates
Merck's pharmaceutical division posted sales of $14.41 billion within the second quarter, 7 percent greater than in the identical period last 12 months. The division develops a big selection of medication for various disease areas.
The company's immunotherapy drug Keytruda generated sales of $7.27 billion within the quarter, up 16 percent from the identical period last 12 months. Analysts had expected sales of $7.12 billion for Keytruda, in line with estimates from StreetAccount.
The increase was as a result of increased use of Keytruda in early-stage cancer and powerful demand in metastatic cancer, which spreads to other parts of the body, the corporate's chief financial officer, Caroline Litchfield, said during a conference call on Tuesday.
Sales of Gardasil, a vaccine to forestall HPV cancer, probably the most common sexually transmitted infection within the United States, remained virtually unchanged.
Gardasil posted sales of $2.48 billion, up just 1% from the second quarter of 2023. Merck said growth was driven by higher prices within the U.S. but was held back by lower sales in China as a result of delivery timing.
“As soon as we know more, we will evaluate future deliveries to our partner and work to restore their inventory to more normal levels,” Litchfield said.
According to StreetAccount, segment results were barely below the $2.51 billion expected by analysts.
Winrevair reported second-quarter sales of $70 million following its approval in March. Analysts had expected the drug to generate sales of $59.4 million.
Merck estimates that about 40 percent of Winrevair sales are for doses given to U.S. patients, with the remainder coming from distributors build up inventory of the drug, Litchfield said. She noted that greater than 1,000 patients began Winrevair within the second quarter, largely as a result of prescriptions filled in April and May.
Meanwhile, type 2 diabetes drug Januvia posted sales of $629 million, down 27 percent from the identical period last 12 months. Merck said the decline was mainly as a result of lower demand and lower prices for the drug, together with competition from generics in several countries.
Januvia is considered one of 10 drugs which might be the topic of ongoing Medicare price negotiations, a policy designed to make expensive drugs more cost-effective for seniors. Those price negotiations, a key provision of President Joe Biden's inflation-fighting bill, end in early August.
Sales of Merck's antiviral Covid pill Lagevrio also fell, by 46% to $110 million within the quarter, but that also beat analysts' expectations of sales of $81.5 million, in line with StreetAccount.
Merck's animal health division, which develops vaccines and medicines for dogs, cats and cattle, reported second-quarter sales of $1.48 billion, up 2 percent from the identical period last 12 months and barely lower than analysts surveyed by StreetAccount had expected.
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