Merck on Thursday reported Third-quarter sales and adjusted profit beat expectations as the corporate posted strong sales from its top-selling cancer drug Keytruda, recently launched treatments and its animal health business.
But Merck's vaccine, which prevents cancer attributable to HPV, essentially the most common sexually transmitted infection within the U.S., posted one other quarter of lower-than-expected sales. Sales of the Gardasil vaccine fell 11% in comparison with the identical period last 12 months.
The pharmaceutical giant lowered its full-year revenue forecast to a spread of $63.6 billion to $64.1 billion from a previous forecast of $63.4 billion to $64.4 billion.
Merck also cut its adjusted earnings forecast to a spread of $7.72 to $7.77 per share, from a previous forecast of $7.94 to $8.04 per share. This updated outlook reflects a one-time charge of 24 cents per share related to business development agreements with Curon Biopharmaceutical and Daiichi Sankyo.
Shares of Merck fell nearly 3% on Thursday.
Here's what Merck reported for third quarter in comparison with Wall Street expectations based on an analyst survey by LSEG:
- Earnings per share: $1.57 adjusted vs. $1.50 expected
- Revenue: $16.66 billion versus expected $16.46 billion
Merck posted third-quarter net income of $3.16 billion, or $1.24 per share. In comparison, net income within the year-ago period was $4.75 billion, or $1.86 per share.
Excluding acquisition and restructuring costs, Merck earned $1.57 per share within the three-month period.
The company reported third-quarter revenue of $16.66 billion, up 4% from the identical period last 12 months.
The findings come as Merck is making significant progress in preparing for Keytruda's patent expiration in 2028. Losing exclusive rights to the drug will likely result in a decline in sales and force the corporate to attract revenue from other sources.
Merck has a handful of latest deals and major drug launches in its books that can help it offset those losses. This includes Winrevair, a drug approved within the US in March to treat a progressive and life-threatening lung disease.
And Capvaxive, a vaccine designed to guard adults against a bacteria called pneumococcus that could cause serious illness and lung infections, was approved within the U.S. in June.
The company's pipeline of late-stage drugs has nearly tripled up to now three years or so to greater than 20 unique products, Merck CEO Rob Davis said during a conference call Thursday.
He said this may result in a major variety of drug and vaccine launches over the following five years, most of which have “blockbuster-plus potential”. Blockbuster drugs generate a minimum of $1 billion in annual sales.
Pharmaceutical unit beats estimates
Merck's pharmaceutical division, which develops a big selection of medication, posted third-quarter sales of $14.94 billion, up 5% from the identical period last 12 months.
The company's immunotherapy drug Keytruda posted revenue of $7.43 billion within the quarter, up 17% from the year-ago period. Analysts had expected Keytruda sales of $7.33 billion, based on StreetAccount estimates.
This increase was as a result of higher uptake of Keytruda in early-stage cancers and powerful demand for the drug against metastatic cancers that spread to other parts of the body.
Gardasil had sales of $2.31 billion. Merck said the decline was primarily as a result of lower demand in China in comparison with the identical period last 12 months. This was partially offset by higher sales within the US
That's below the $2.51 billion analysts were expecting, based on StreetAccount.
Davis said the corporate is “heavily focused” on the China market and is moving forward with its commercialization partner Zhifei to extend Gardasil promotional and patient education efforts.
“We expect these efforts will result in increased patient activation and demand, but as we said, this will take time,” Davis said.
Davis said Merck was confident in Gardasil's long-term prospects on condition that lower than 10% of the eligible population worldwide has been vaccinated. The company expects to succeed in its goal of world Gardasil sales of $11 billion by 2030.
After approval in March, Winrevair reported third-quarter revenue of $149 million. Analysts had expected sales of $127 million.
About 1,700 people received a Winrevair prescription through the quarter, bringing the full number of latest patient prescriptions for the reason that drug's launch to three,700, Merck CFO Caroline Litchfield said through the call. The company estimates that about 80% of those patients receive the actual drug.
The company's type 2 diabetes drug Januvia posted sales of $482 million, down 42% from the identical period last 12 months. Merck said the decline was primarily as a result of lower drug prices within the U.S. in addition to competition from generics in several countries.
According to StreetAccount, analysts had expected sales of $610 million.
Januvia is one in every of 10 drugs which are the topic of ongoing Medicare pricing negotiations, a policy geared toward making expensive drugs more cost-effective for seniors. Those price talks, a key provision of President Joe Biden's Inflation Reduction Act, will end in early August.
Sales of Merck's antiviral Covid pill Lagevrio also fell 40% to $383 million within the quarter.
However, based on StreetAccount, this beat analysts' expectations with revenue of $124.2 million.
Merck's animal health division, which develops vaccines and medications for dogs, cats and cattle, posted third-quarter sales of $1.49 billion. This is 6% greater than in the identical period last 12 months and is barely above the expectations of analysts surveyed by StreetAccount.
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