The exterior view of the entrance to Merck headquarters in Rahway, New Jersey, on Feb. 5, 2024.
Spencer Platt | Getty Images
Merck on Thursday reported third-quarter revenue and adjusted earnings that topped expectations as the company saw strong sales from its top-selling cancer drug Keytruda, recently launched treatments and its animal health business.
But Merck’s vaccine that prevents cancer from HPV, the most common sexually transmitted infection in the U.S., posted another quarter of lighter-than-expected sales. Revenue from the shot, Gardasil, fell 11% compared with the year-earlier period.
The pharmaceutical giant narrowed its full-year sales forecast to a range of $63.6 billion to $64.1 billion, from a previous guidance of $63.4 billion to $64.4 billion.
Merck also lowered its adjusted profit guidance to a range of $7.72 to $7.77 per share, from a previous forecast of $7.94 to $8.04 per share. That updated outlook reflects a one-time charge of 24 cents per share related to business development deals with Curon Biopharmaceutical and Daiichi Sankyo.
Shares of Merck fell nearly 3% on Thursday.
Here’s what Merck reported for the third quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
- Earnings per share: $1.57 adjusted vs. $1.50 expected
- Revenue: $16.66 billion vs. $16.46 billion expected
Merck posted net income of $3.16 billion, or $1.24 per share, for the third quarter. That compares with net income of $4.75 billion, or $1.86 per share, during the year-earlier period.
Excluding acquisition and restructuring costs, Merck earned $1.57 per share for the three-month period.
The company booked $16.66 billion in revenue for the third quarter, up 4% from the same period a year ago.
The results come as Merck shows substantial progress in preparing for Keytruda’s patent expiration in 2028. The loss of exclusive rights to the medicine will likely cause sales to fall, forcing the company to draw revenue from elsewhere.
Merck has a handful of new deals under its belt and key drug launches that will help it offset those losses. That includes Winrevair, a medication approved in the U.S. in March to treat a progressive and life-threatening lung condition.
And Capvaxive, a vaccine designed to protect adults from a bacteria known as pneumococcus that can cause serious illnesses and lung infection, was approved in the U.S. in June.
The company’s pipeline of drugs in late-stage development has nearly tripled over the past roughly three years to more than 20 unique products, Merck CEO Rob Davis said during an earnings call Thursday.
He said that will fuel a significant number of medicine and vaccine launches over the next five years, the majority of which will have “blockbuster-plus potential.” Blockbuster drugs rake in at least $1 billion in annual revenue.
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Sales of Merck’s Covid antiviral pill, Lagevrio, also fell 40% to $383 million during the quarter.
Still, that topped analysts’ expectations of $124.2 million in sales, according to StreetAccount.
Merck’s animal health division, which develops vaccines and medicines for dogs, cats and cattle, posted $1.49 billion in sales for the third quarter. That is up 6% from the year-earlier period and slightly above what analysts surveyed by StreetAccount were expecting.
