Biotech
Tuesday, July 30th, 2024 1:42 pm EDT
Key Points
- Strong Financial Performance: Merck reported second-quarter revenue of $16.11 billion and adjusted earnings per share of $2.28, both surpassing Wall Street expectations. This success was largely driven by strong sales of Keytruda and other oncology and vaccine products, along with a new cardiovascular drug.
- Adjusted Forecasts: The company raised its full-year sales forecast to $63.4 billion to $64.4 billion, reflecting increased demand for key products. However, it lowered its adjusted profit guidance to $7.94 to $8.04 per share, due to one-time charges from recent acquisitions of Harpoon Therapeutics and EyeBio.
- Mixed Product Performance: Keytruda sales rose 16% to $7.27 billion, while Gardasil’s sales were nearly flat at $2.48 billion. New products like Winrevair, approved in March, contributed $70 million, exceeding expectations. However, sales of Januvia declined by 27%, impacted by lower demand, prices, and generic competition.
Merck reported strong second-quarter financial results, exceeding Wall Street’s expectations with revenue of $16.11 billion and adjusted earnings per share (EPS) of $2.28, compared to analyst estimates of $15.84 billion in revenue and $2.15 EPS. This performance was driven by robust sales from its leading cancer drug Keytruda, which generated $7.27 billion, a 16% increase from the previous year. The company’s pharmaceutical division saw overall revenue rise by 7% to $14.41 billion, bolstered by recent product launches such as Winrevair, which earned $70 million in its first quarter post-approval, and Capvaxive, a new vaccine for pneumococcus. Despite these successes, Merck adjusted its full-year profit forecast downward to reflect acquisition-related charges from its recent purchases of Harpoon Therapeutics and EyeBio. The new profit guidance ranges from $7.94 to $8.04 per share, down from the previously anticipated $8.53 to $8.65.
In contrast, sales of the HPV vaccine Gardasil remained nearly flat at $2.48 billion, up just 1% due to higher U.S. prices but offset by weaker sales in China. Merck’s Type 2 diabetes drug Januvia experienced a significant 27% decline in sales to $629 million, attributed to decreased demand, pricing pressures, and increased generic competition. Additionally, sales of the COVID-19 antiviral pill Lagevrio dropped 46% to $110 million, though this was still above analyst expectations. The company’s animal health division also saw a modest 2% increase in revenue to $1.48 billion.
As Merck prepares for the eventual patent expiration of Keytruda in 2028, it is actively expanding its portfolio to mitigate potential losses, including pursuing new drug launches and acquisitions. The ongoing Medicare drug price negotiations, aimed at lowering medication costs under the Inflation Reduction Act, have also impacted the company’s outlook, particularly affecting drugs like Januvia. Despite these challenges, Merck’s strategic focus on its oncology and vaccines portfolio continues to drive growth, reflected in its raised full-year sales forecast, now projected to reach between $63.4 billion and $64.4 billion, slightly up from the previous estimate. However, the company’s stock was down 2.8% in premarket trading following the announcement, indicating mixed investor sentiment.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/07/30/merck-mrk-earnings-q2-2024.html
