Merck Earnings Rise On Cancer-Drug Sales
July 28 2017 - 8:29AM
Dow Jones News
By Imani Moise
Merck & Co. said its second-quarter earnings rose as the
drugmaker recorded blockbuster growth for its cancer drug
Keytruda.
New products helped lift pharmaceutical revenue 0.7% to $8.76
billion but increased competition from generic drugs weighed down
the growth.
Merck shares rose 1.3% to $64.50 during premarket trading Friday
after gaining 8.2% so far this year.
The market for lower-cost generic versions of biotechnology
drugs continues to hurt New Jersey-based Merck in Europe. But in
the U.S., the drugmaker is setting itself to benefit from
biosimilar competition.
Recently the company announced a partnership with Samsung
Bioepis Co. to market a biosimilar version of Johnson &
Johnson's Remicade in the U.S. at a 35% discount, hoping to steal
market share. In Europe, where Merck has a longstanding partnership
with Johnson & Johnson, the introduction of biosimilars by
other companies knocked Merck's Remicade sales down 39% in the
second quarter.
Keytruda sales jumped to $881 million from $314 million a year
earlier as the Merck continued to market the product with new uses
around the world.
The company also said it expects a smaller negative impact from
foreign currencies and raised the top end of its full-year guidance
range. Merck now sees 2017 sales between $39.4 billion and $40.4
billion, compared with prior guidance of $39.1 billion to $40.3
billion. Analysts polled by Thomson Reuters had forecast $40.1
billion in annual revenue.
In all Merck topped views reporting earnings of $1.95 billion,
or 71 cents a share, up from $1.21 billion, or 43 cents a share, a
year earlier. Excluding certain items, earnings rose to $1.01 a
share from 93 cents. Revenue grew 0.9% to $9.93 billion.
Analysts polled by Thomson Reuters had forecast earnings of 87
cents a share on $9.75 billion in sales.
On Thursday, AstraZeneca PLC said it would share the rights to
its ovarian cancer drug Lynparza with Merck. Under the terms of the
deal, Merck will pay $1.6 billion to AstraZeneca up front, $750
million in option payments and another $6.15 billion over time
based on development and sales targets. The companies will share
profits generated from the drug and work together on developing it
to treat other cancers, including combinations with their
respective immuno-oncology drugs. The deal also gives Merck access
to AstraZeneca's experimental lung cancer drug selumetinib.
Write to Imani Moise at imani.moise@wsj.com
(END) Dow Jones Newswires
July 28, 2017 08:14 ET (12:14 GMT)
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