Merck’s loss is smaller than expected, with top drug sales surpassing Street estimates.
Merck & Co Reports Strong Q2 Results, Raises Profit Forecast
By Michael Erman
Merck & Co has exceeded expectations with its second-quarter performance, reporting a narrower-than-expected loss and raising its full-year profit forecast. The company’s success can be attributed to its two top-selling products, cancer immunotherapy Keytruda and HPV vaccine Gardasil.
In the second quarter, Merck recorded sales of $15.0 billion, surpassing last year’s figure of $14.6 billion. Despite a decline in demand for its COVID-19 therapeutic Lagevrio, the company managed to outperform analysts’ expectations, who had predicted sales of $14.4 billion.
Keytruda sales reached $6.3 billion, a 19% increase compared to forecasts of $5.9 billion. Gardasil, which prevents HPV-related cancers, saw a 47% surge in sales, reaching $2.5 billion, well above Wall Street estimates of $2.1 billion.
Merck CEO Rob Davis attributes Keytruda’s success to its growing usage in the United States and internationally, particularly in the treatment of triple negative breast cancer. Additionally, Gardasil’s growth in China has been a significant driver, with potential for further expansion into male patients and smaller cities.
On the other hand, Lagevrio sales plummeted to $200 million from $1.2 billion due to decreased demand for COVID-19 therapeutics amid low infection rates.
Despite an adjusted loss of $5.2 billion, or $2.06 per share, primarily due to an acquisition-related charge, Merck’s performance exceeded analysts’ expectations of a loss of $2.18 per share. In the same period last year, the company reported earnings of $4.7 billion, or $1.87 per share.
Merck’s recent acquisition of Prometheus Biosciences for nearly $11 billion has positioned the company to mitigate potential revenue loss as Keytruda’s patents expire. CEO Rob Davis assures that this deal will not hinder future opportunities for further acquisitions, as Merck remains committed to seeking science-driven opportunities.
With its strong Q2 performance, Merck now expects full-year sales of $58.6 to $59.6 billion, up from its previous projection of $57.7 billion to $58.9 billion. The company also anticipates earning $2.95 to $3.05 per share for 2023.
(Reporting by Michael Erman; Editing by Bill Berkrot)
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