An exterior view of the entrance to Merck headquarters in Rahway, New Jersey, on February 5, 2024.
Spencer Platt | Getty Images
Merck On Tuesday, the company reported that its second-quarter adjusted revenue and earnings beat Wall Street expectations as it posted strong sales of its blockbuster cancer drug Keytruda, as well as other treatments in its oncology and vaccines portfolios and a recently launched cardiovascular drug.
The pharmaceutical giant also raised its full-year sales forecast to a range of $63.4 billion to $64.4 billion due to rising demand for key products, particularly its oncology treatments. That figure is only slightly higher than the $63.1 billion to $64.3 billion forecast the company provided in April.
Merck lowered its adjusted earnings forecast to a range of $7.94 to $8.04 per share from a previous forecast of $8.53 to $8.65 per share. That updated forecast reflects one-time charges of 26 cents and 51 cents per share from the acquisitions of Harpoon Therapeutics and EyeBio, respectively, Merck said.
Here's what Merck reported for the second quarter compared with what Wall Street expected, according to a survey of analysts by LSEG:
- Earnings per share: $2.28 adjusted vs. $2.15 expected
- Revenue: $16.11 billion versus the expected $15.84 billion
The drugmaker posted second-quarter net income of $5.46 billion, or $2.14 per share, compared with a net loss of $5.98 billion, or $2.35 per share, in the same period a year earlier, which included a charge related to its acquisition of Prometheus Biosciences.
Excluding acquisition and restructuring costs, Merck earned $2.28 per share during the three-month period.
Merck reported revenue of $16.11 billion in the quarter, up 7% from the same period a year earlier.
The results come as Merck prepares to offset losses from Keytruda's patent expiration in 2028 with a handful of new deals under its belt and key drug launches.
Among them is Winrevair, a drug approved in the United States in March to treat a progressive and potentially fatal lung disease. Some analysts expect global sales of Winrevair could reach $5 billion by 2030.
It also includes Capvaxive, a vaccine designed to protect adults from a bacteria known as pneumococcus that can cause severe illness and lung infections. The vaccine was approved in the United States last month.
Pharmaceutical unit sales beat estimates
Merck's pharmaceutical division posted revenue of $14.41 billion in the second quarter, up 7% from the same period a year earlier. The unit develops a wide range of drugs for a variety of diseases.
The company's Keytruda immunotherapy reported revenue of $7.27 billion during the quarter, up 16% from the same period a year earlier. Analysts had expected Keytruda sales of $7.12 billion, according to StreetAccount estimates.
Sales of Gardasil, a vaccine that prevents cancer caused by HPV, the most common sexually transmitted infection in the United States, were virtually unchanged.
Gardasil generated sales of $2.48 billion, up 1% from the second quarter of 2023. Merck said the growth was driven by higher prices in the U.S. but hampered by lower sales in China due to the timing of shipments.
The segment's results were slightly below the $2.51 billion expected by analysts, according to StreetAccount.
Winrevair posted revenue of $70 million in the second quarter following its approval in March. Analysts had expected the treatment to post sales of $59.4 million.
Meanwhile, the company's type 2 diabetes treatment Januvia posted sales of $629 million, down 27% from the same period a year earlier. Merck said the decline was primarily due to lower demand and pricing for the drug, along with generic competition in several countries.
Januvia is one of 10 drugs targeted by ongoing negotiations over Medicare drug pricing, a policy aimed at making expensive drugs more affordable for seniors. Those pricing negotiations, a key provision of President Joe Biden’s Inflation Reduction Act, are set to end in early August.
Sales of Merck’s antiviral Covid pill Lagevrio also fell 46% to $110 million during the quarter. Still, they beat analysts’ expectations of $81.5 million in sales, according to StreetAccount.
Merck's animal health division, which develops vaccines and medicines for dogs, cats and livestock, posted second-quarter sales of $1.48 billion, up 2% from the same period a year earlier and slightly below what analysts polled by StreetAccount had expected.
