Merck sales grow globally

July 27, 2018 - 8:01 am

Soaring sales of most of its cancer drugs and vaccines boosted Merck & Co.'s second-quarter revenue by 5 percent, but restructuring and acquisition costs helped drag profits down 12 percent. However, revenue and net income both beat Wall Street expectations and the drugmaker raised its profit forecasts for the year a bit.

The maker of diabetes pill Januvia and Keytruda, an immune-oncology drug that works by boosting the immune system, on Friday posted net income of $1.71 billion, or 63 cents per share. Earnings, adjusted for $1.15 billion in one-time costs, came to $1.06 per share, 3 cents better than expected, according to a survey of analysts by Zacks Investment Research.

The Kenilworth, New Jersey, drugmaker reported second-quarter revenue of $10.47 bill, topping analysts' projections for $10.32 billion, on average.

Revenue from prescription drug sales increased 6 percent, to $9.28 billion, led by Keytruda, Januvia and the Gardasil vaccine against cervical and other cancers caused by the human papilloma virus.

Merck has been shifting its focus more to cancer treatments as increased brand or generic competition cuts into sales of some drugs in other categories, particularly its shingles vaccine Zostavax and hepatitis C drug Zepatier. Both saw sales plunge more than 70 percent in the quarter as rivals' newer or better drugs make minor players. Meanwhile, sales of its former top sellers, Januvia and Janumet for Type 2 diabetes, are starting to flatter out.

However, Keytruda sales have been growing rapidly as the injected biologic drug keeps winning approvals for treating additional types of cancer, most recently in the U.S. for advanced cervical cancer and a type of lymphoma. It was recently approved in China, a huge market, for treating melanoma. Merck recently began getting revenue from partnerships selling two new oncology drugs, Lynparza for ovarian cancer and Lenvima for thyroid cancer. And the company acquired Viralytics Ltd., an Australian biotech company developing cancer cell-kiling viruses.

Sales of veterinary medicines for pets and livestock jumped 14 percent, to $1.08 billion.

Merck said it now expects full-year earnings in the range of $4.22 to $4.30 per share, up from its May forecast for 2018 earnings between $4.16 and $4.28 per share. Merck also tweaked its 2018 revenue forecast. It now expects $42 billion to $42.8 billion, a narrower range than its May forecast for between $41.8 billion and $43 billion.


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