Merck (MRK) Q1 2024 results

Merck on Thursday reported First-quarter revenue and adjusted earnings beat expectations as the corporate reported strong sales of its blockbuster cancer drug Keytruda And Vaccine products.

The pharmaceutical giant also increased and reduced its sales and profit forecasts for the total 12 months. Merck now expects 2024 sales to be between $63.1 billion and $64.3 billion, up from its previous forecast of $62.7 billion to $64.2 billion.

The company expects full-year adjusted earnings of $8.53 to $8.65 per share, up from its previous forecast of $8.44 to $8.59 per share.

This outlook features a one-time charge of roughly 26 cents per share related to Merck acquisition from Harpoon Therapeutics in January. The company develops immune-based cancer drugs. The forecast also features a negative impact of 30 cents per share from changes in foreign exchange rates.

Shares of Merck rose 4% on Thursday following the outcomes.

Here’s what Merck reported for the primary quarter in comparison with Wall Street’s expectations, based on an LSEG analyst survey:

• Earnings per share: $2.07 adjusted versus $1.88 expected
• Revenue: $15.78 billion versus expected $15.20 billion

The company reported first-quarter net income of $4.76 billion, or $1.87 per share. That compares to net income of $2.82 billion, or $1.11 per share, within the year-ago period.

Excluding acquisition and restructuring costs, Merck earned $2.07 per share in the primary quarter. Both adjusted and unadjusted earnings for the period include the charge related to the Harpoon deal.

Merck reported revenue of $15.78 billion within the quarter, up 9% from the identical period last 12 months.

These results 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.

But 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 last month to treat a progressive and life-threatening lung disease. Some analysts imagine Winrevair’s global revenue could reach $5 billion by 2030.

Merck is seeing “strong interest” in Winrevair from patient groups and quite a few prescribers and is making “good progress” in providing access to the drug, Chief Financial Officer Caroline Litchfield said during a conference call Thursday. Several payers have already taken out insurance policies for the drug, she noted.

“We are confident that the launch of Winrevair meets our expectations to date and look forward to staying updated on our progress,” said Litchfield.

Merck can also be cutting costs as a part of a brand new restructuring program it announced in February. These efforts aim to enhance the production network of each the pharmaceutical division and the animal health business.

The company recorded $246 million in expenses related to the restructuring in the primary quarter, which should not reflected within the adjusted results.

Merck’s pharmaceutical division posted first-quarter sales of $14.01 billion, up 10% from the identical period last 12 months. This department develops a wide selection of medication for various disease areas including oncology and infectious diseases.

The major driver of growth was Merck’s immunotherapy Keytruda, which is used to treat several forms of cancer. Keytruda reported revenue of $6.95 billion within the quarter, up 20% from the identical period last 12 months.

Analysts had expected Keytruda sales of $6.71 billion, in line with FactSet estimates.

Litchfield said the expansion reflects increased uptake amongst patients within the earliest stages of cancer and continued demand for treatment of metastatic cancer, which is when the disease spreads to a distinct a part of the body than where it began.

Merck also reported a jump in sales of Gardasil, a vaccine that forestalls cancer brought on by HPV, probably the most common sexually transmitted infection within the United States

Gardasil posted sales of $2.25 billion, up 14% from the primary quarter of 2023. That’s in keeping with the $2.24 billion analysts had expected, in line with FactSet estimates.

Litchfield said the rise reflected strong demand, particularly in China.

Another vaccine got here calling Vaxneuvance, which prevents patients from contracting pneumococcal disease, also saw strong growth within the quarter. The shot brought in $219 million in sales, up 106% from the identical period last 12 months.

Meanwhile, Merck’s type 2 diabetes drug Januvia posted sales of $670 million, down 24% from the identical period last 12 months. The company said the decline was primarily on account of lower drug prices, declining demand within the U.S. and generic competition in several international markets.

Analysts had expected Januvia sales of $687.3 million, in line with FactSet estimates.

Januvia is one in every of 10 drugs subject to ongoing Medicare pricing negotiations, a policy under the Inflation Reduction Act geared toward making expensive drugs more cost-effective for seniors.

Sales of Merck’s antiviral Covid pill Lagevrio also fell 11% to $350 million within the quarter. Still, that total revenue beat analysts’ expectations of $106.4 million, in line with FactSet.

The demand for Lagevrio and other Covid products from corporations like Pfizer And Modern has declined sharply over the past 12 months as cases and public concern in regards to the virus have declined from their pandemic peak.

Merck’s animal health division, which develops vaccines and medications for dogs, cats and cattle, posted first-quarter sales of $1.51 billion. That’s just 1% greater than the identical period a 12 months ago.

In February, Merck announced a purchase order Elanco Animal Health‘s water business for $1.3 billion in money. The deal includes Elanco’s entire portfolio of aquatic medicines, vaccines and dietary supplements, in addition to two manufacturing facilities and a research facility.