Merck In its latest financial report, Merck has disclosed fourth-quarter revenue and adjusted earnings that outperformed expectations, thanks to robust sales of its flagship cancer drug, Keytruda, and the HPV vaccine Gardasil
The Merck Pharmaceutical reported a net quarterly loss due to charges associated with a collaboration deal with Japanese drugmaker Daiichi Sankyo.
Here’s a breakdown of Merck’s fourth-quarter performance compared to Wall Street estimates:
- Earnings per share: Adjusted at 3 cents, exceeding the expected loss of 11 cents per share.
- Revenue: $14.63 billion, surpassing the expected $14.50 billion.
Financial Performance
However, Merck posted a net loss of $1.23 billion, or 48 cents per share, for the quarter, compared to a net income of $3.02 billion, or $1.18 per share, in the same period the previous year. Excluding acquisition and restructuring costs, the company earned 3 cents per share for the quarter, which includes a $1.69 per share charge related to the Daiichi Sankyo deal.
Keytruda’s Resilience
Despite the net loss, Merck reported a 6% increase in revenue to $14.63 billion from the same quarter a year ago. The results align with Merck’s efforts to prepare for the patent expiration of Keytruda in 2028, with new deals and upcoming drug launches aimed at diversifying revenue streams.
The company also provided its full-year 2024 guidance, anticipating revenue between $62.7 billion and $64.2 billion, with adjusted earnings projected to be $8.44 to $8.59 per share. Analysts had expected full-year sales of $63.52 billion and adjusted earnings of $8.42 per share.
Merck’s pharmaceutical business reported notable growth, generating $13.14 billion in revenue during the quarter, an 8% increase from the same period the previous year. Keytruda, the immunotherapy drug used to treat various cancers, contributed significantly, with sales reaching $6.61 billion, a 21% increase.
Gardasil’s Growth
The HPV vaccine Gardasil also contributed significantly to Merck’s positive results, with sales reaching $1.87 billion. This represents a notable 27% increase from the fourth quarter of 2022. Although slightly below analysts’ expectations of $1.92 billion, Gardasil’s strong performance underscores its role in Merck’s diverse product portfolio and its impact on public health.
Sales of Gardasil, the HPV vaccine, rose by 27% to $1.87 billion, while the Covid antiviral pill Lagevrio saw a decline to $193 million, down 77% from the fourth quarter of 2022. Notably, Lagevrio exceeded analysts’ expectations of $69 million in sales.
On the other hand, Merck’s Type 2 diabetes treatment, Januvia, experienced a sales decline to $787 million, down 14% from the same period the previous year. The company attributed this decline to competition from cheaper generic drugs outside the U.S. and lower demand in the country.
Challenges and Future Outlook
Merck’s animal health division posted $1.28 billion in sales, up 4% from the same period the previous year, driven by increased demand for companion animal products.
In addition to the financial results, Merck announced a new restructuring program for 2024 aimed at improving the manufacturing network of its pharmaceutical division and animal health business. The company recorded charges of $190 million related to the program in the fourth quarter, which is excluded from its adjusted results, bringing the total restructuring charges for the period to $401 million.
Merck’s performance, as detailed in the financial report, will be discussed further in a conference call scheduled for 9 a.m. ET.
Conclusion
Merck’s impressive financial results, buoyed by the robust sales of Keytruda and Gardasil, showcase the company’s strategic strength and resilience in the pharmaceutical market. Despite facing challenges such as collaboration-related charges, Merck remains on a trajectory of growth, demonstrating its commitment to innovation and addressing critical healthcare needs through its diverse product portfolio. The positive outlook for 2024 further solidifies Merck’s position as a key player in the pharmaceutical industry.
