Merck results beat expectations as top drugs Keytruda, Gardasil post strong sales

Key Points

• Strong Financial Performance: Merck reported fourth-quarter revenue and adjusted earnings that surpassed Wall Street estimates, driven by robust demand for its leading cancer drug, Keytruda, and the HPV vaccine Gardasil. Despite a net quarterly loss, Merck’s adjusted earnings per share stood at 3 cents, beating expectations of an 11 cents per share loss. Revenue for the quarter was $14.63 billion, exceeding the expected $14.50 billion.
• Pharmaceutical Growth and Keytruda’s Impact: Merck’s pharmaceutical business, witnessing an 8% increase in revenue to $13.14 billion, was primarily fueled by the growth of Keytruda. The immunotherapy drug generated $6.61 billion in revenue, a 21% rise from the previous year. Keytruda’s success is attributed to increased usage in earlier-stage cancers and strong demand among patients with metastatic diseases. Gardasil, a vaccine preventing cancer from HPV, also contributed to revenue with sales reaching $1.87 billion, up 27% from the fourth quarter of 2022.
• Outlook, Restructuring, and Diversification: Merck provided a generally in-line full-year 2024 guidance, with revenue projected between $62.7 billion and $64.2 billion and adjusted earnings expected to be $8.44 to $8.59 per share. The company emphasized its progress in preparing for Keytruda’s patent expiration in 2028, acknowledging the need for diversification and expressing interest in acquisitions or collaboration deals. Additionally, Merck announced a restructuring program for 2024, aiming to enhance the manufacturing network of its pharmaceutical division and animal health business, recording charges of $190 million related to the program in the fourth quarter.