Merck beat revenue estimates, raising outlook for strong sales of Keytruda and vaccines

An exterior view of the entrance to Merck’s headquarters in Rahway, New Jersey on February 5, 2024.

Spencer Pratt

Mark It reported first-quarter revenue and adjusted earnings Thursday that beat expectations on strong sales of its blockbuster cancer drug. Food and vaccine products.

The pharmaceutical giant raised and lowered full-year revenue and revised its profit forecast. Merck now expects 2024 sales to be $63.1 billion to $64.3 billion, up from previous guidance of $6.27 to $64.2 billion.

The company’s previous forecast expected full-year adjusted earnings of $8.53 to $8.65 per share of $8.44 to $8.59 per share.

The outlook includes a one-time charge of about 26 cents per share related to Mark’s acquisition of Harpoon Therapeutics in January. The company makes immune-based cancer drugs. Guidance also includes a negative impact of 30 cents per share from currency changes.

Merck’s first-quarter report compared with Wall Street expectations, according to a survey of analysts by the London Stock Exchange Group (LSEG):

• Earnings per share: Adjusted $2.07, expected $1.88
• Income: US$15.78 billion, versus US$15.2 billion expected

The company’s first quarter net income was $4.76 billion, or $1.87 per share. That compares to 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 profit for the period included charges related to the Harpoon contract.

Merck’s revenue for the quarter was US$15.78 billion, a 9% increase over the same period last year.

These results come as Merck makes substantial progress in its preparations for Keytruda Patent expires 2028. Losing drug exclusivity can reduce sales, forcing companies to source revenue elsewhere.

But Merck has some new deals and key drug launches that should help it offset that loss. These include Winrevair, a drug approved in the US last month to treat a progressive and life-threatening lung disease. Some analysts predict that Winrevair’s global sales could reach $5 billion by 2030.

Merck also cut costs in a new restructuring 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 excluded from adjusted results.

Merck’s pharmaceutical division had revenue of US$14.01 billion in the first quarter, up 10% from the same period last year. The division manufactures a wide range of drugs in multiple disease areas including oncology and infectious diseases.

Merck’s immunotherapy Keytruda, which is used to treat several types of cancer, drove much of that growth. Keytruda posted revenue of $6.95 billion in the quarter, up 20% from the same period last year.

Analysts had expected Keytruda to sell $6.71 billion, according to FactSet estimates.

Merck also reported increased sales of Gardasil, a vaccine to prevent cancer from HPV, the most common sexually transmitted infection in the United States.

Gardasil brought in sales of $2.25 billion, up 14% from the first quarter of 2023. FactSet estimated that was in line with analysts’ expectations of $2.24 billion.

Another vaccine called Mom newans, which prevents patients from contracting pneumococcal disease, also saw strong growth in the quarter. Sales of this lens reached US$219 million, an increase of 106% over the same period last year.

Meanwhile, sales of Mark’s type 2 diabetes drug Januvia were $670 million, down 24% from the same period last year. The company said the sales decline was primarily due to lower drug prices, lower demand in the U.S. and competition from generics in several international markets.

Analysts had expected Januvia to post sales of $687.3 million, according to FactSet estimates.

Januvia is one of 10 drugs included in the ongoing Medicare drug price negotiations, a policy designed to make expensive drugs more affordable for seniors under the Affordable Care Act.

Sales of Merck’s Covid antiviral drug Lagevrio also fell 11% to $350 million in the quarter. Still, Total Beat analysts expected sales of $106.4 million, according to FactSet.

Such as the demand for Lagevrio and other covid products from the company Pfizer And Modena The number of cases fell sharply last year as the number of cases and public concern about the virus subsided from the peak of the epidemic.

Merck’s animal health unit, which makes vaccines and drugs for dogs, cats and cattle, had sales of $1.51 billion in the first quarter. Compared to the same period last year, it has increased by only 1%.

In February, Merck said it would make the acquisition Yilanke animal healthAquatic products business cashed $1.3 billion. The deal includes Elanco’s entire portfolio of aquatic species pharmaceuticals, vaccines and supplements, as well as two manufacturing plants and a research facility.