Merck Revenue and Profit Rise on Cancer Drugs, Vaccines -- Update
October 25 2016 - 02:02PM
Dow Jones News
By Peter Loftus and Austen Hufford
Merck & Co. posted increases in third-quarter revenue and
profit, helped by higher sales of a closely watched cancer
treatment and vaccines.
The drugmaker's shares rose 1.7% Tuesday afternoon as results
beat analysts' expectations. The company also narrowed and raised
its full-year 2016 earnings forecast range.
Merck is trying to overcome ongoing pressure on sales of its top
products because of competition from lower-cost copies. Sales of
the anti-inflammatory drug Remicade, which Merck markets in Europe,
have declined because of the availability of copycat versions
there. And Merck expects a significant sales decline for its
anti-cholesterol drugs Zetia and Vytorin after competing generics
become available in the U.S. in December.
To help offset the sales pressure, the Kenilworth, N.J., company
is counting on rising sales of its new cancer drug Keytruda, which
works by harnessing patients' immune systems to destroy tumor
cells. The U.S. Food and Drug Administration approved the drug
Monday as a first treatment option for certain patients with
advanced lung cancer, widening its use beyond second-line treatment
after patients tried other drugs.
For the third quarter, Keytruda posted sales of $356 million, up
from $159 million in the same quarter last year. J.P. Morgan
analysts expect the latest regulatory approval in lung cancer to
help more than double annual sales of the drug to $3.5 billion in
2017 from an expected $1.3 billion this year.
"Keytruda is changing the cancer treatment landscape," Roger
Perlmutter, president of Merck Research Laboratories, said on a
conference call with analysts. Merck is studying the drug's
potential to treat more than 30 tumor types, with about 360
clinical trials under way.
Merck's total pharmaceutical revenue for the third quarter
increased 5.8% to $9.44 billion, driven by growth in vaccines,
oncology, cardiovascular drugs and hospital acute care.
In January, the FDA approved Merck's new treatment, Zepatier,
for hepatitis C, the latest entrant in a booming market for drugs
for the viral infection -- a market now dominated by Gilead
Sciences Inc. Zepatier had sales of $164 million, compared with
$112 million in the second quarter and $50 million in the first
quarter.
In the company's vaccines business, combined sales of Gardasil
and Gardasil 9, which protect against human papillomavirus, jumped
38% to $860 million on increased pricing and demand in the U.S. The
Centers for Disease Control and Prevention last week recommended
younger adolescents should get just two shots of the HPV vaccines,
not three as previously recommended, which could reduce sales.
Sales of Proquad, a measles, mumps, rubella and varicella virus
vaccine, increased 27% as the CDC bought the drug for its pediatric
vaccine stockpile.
Sales of drugs and vaccines for pets and livestock increased 5%
to $865 million, helped by flea-and-tick treatment Bravecto.
Research and development costs increased 11% to $1.7 billion on
higher clinical development spending.
The company posted a profit in the quarter of $2.18 billion, or
78 cents a share, up from $1.83 billion, or 64 cents a share, a
year prior. Excluding restructuring and acquisition-related costs
and other items, per-share earnings rose to $1.07 from 96
cents.
Sales grew 4.6% to $10.54 billion.
Analysts polled by Thomson Reuters had forecast per-share
earnings of 99 cents a share on revenue of $10.18 billion.
For the year, Merck now projects per-share adjusted earnings
between $3.71 and $3.78 on revenue between $39.7 billion and $40.2
billion. It had previously expected earnings of $3.67 to $3.77 and
revenue of $39.1 billion to $40.1 billion.
Write to Peter Loftus at peter.loftus@wsj.com and Austen Hufford
at austen.hufford@wsj.com
(END) Dow Jones Newswires
October 25, 2016 13:47 ET (17:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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