Merck (MRK) earnings Q2 2024

Merck on Tuesday reported second-quarter revenue and adjusted earnings that topped Wall Street’s expectations because it saw strong sales from its blockbuster cancer drug Keytruda in addition to other treatments in its oncology and vaccines portfolios and a newly launched cardiovascular drug. 

The pharmaceutical giant also raised its full-year sales forecast to a variety of $63.4 billion to $64.4 billion on increased demand for key products, particularly its oncology treatments. That is only barely higher than the $63.1 billion to $64.3 billion guidance the corporate provided in April. 

Merck lowered its adjusted profit guidance to a variety of $7.94 and $8.04 per share, from a previous forecast of $8.53 to eight.65 per share. That updated outlook reflects one-time charges of 26 cents and 51 cents per share for the corporate’s acquisitions of Harpoon Therapeutics and EyeBio, respectively, Merck said.

Still, shares of Merck were down almost 9% on Tuesday as investors appeared to mull over lighter-than-expected sales of Gardasil, a vaccine that stops cancer from HPV, essentially the most common sexually transmitted infection within the U.S. Merck pointed to shipment issues in China, which makes up a big share of the shot’s international sales.

Here’s what Merck reported for the second quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG: 

• Earnings per share: $2.28 adjusted vs. $2.15 expected
• Revenue: $16.11 billion vs. $15.84 billion expected

The drugmaker posted net income of $5.46 billion, or $2.14 per share, for the second quarter. That compares with a net lack of $5.98 billion, or $2.35 per share, in the course of the year-earlier period, which included a charge related to its acquisition of Prometheus Biosciences.

Excluding acquisition and restructuring costs, the corporate earned $2.28 per share for the three-month period.

Merck reported $16.11 billion in revenue for the quarter, up 7% from the identical period a 12 months ago. 

The outcomes come as Merck prepares to offset losses from Keytruda’s patent expiration in 2028 with a handful of latest deals under its belt and key drug launches. 

That features Winrevair, a medicine approved within the U.S. in March to treat a progressive and life-threatening lung condition. Some analysts expect that worldwide sales of Winrevair could reach $5 billion by 2030. 

It also includes Capvaxive, a vaccine designed to guard adults from a bacteria known as pneumococcus that may cause serious illnesses and lung infection. The shot was approved within the U.S. last month. 

Merck’s pharmaceutical division booked $14.41 billion in revenue in the course of the second quarter, up 7% from the identical period a 12 months ago. The unit develops a wide selection of medicine for a wide range of disease areas. 

The corporate’s immunotherapy Keytruda recorded $7.27 billion in revenue in the course of the quarter, up 16% from the year-earlier period. Analysts had been expecting $7.12 billion in Keytruda sales, in line with estimates from StreetAccount. 

That increase was driven by higher uptake of Keytruda for earlier-stage cancers and robust demand for metastatic cancers, which spread to other parts of the body, the corporate’s Chief Financial Officer, Caroline Litchfield, said during an earnings call on Tuesday.

Gardasil brought in $2.48 billion in sales, up just 1% from the second quarter of 2023. Merck said that growth was driven by higher prices within the U.S. but hampered by lower sales in China as a result of shipment timing. 

“As we learn more, we are going to assess future shipments to our partner and work to bring their inventory back to a more normal level,” Litchfield said.

The segment results were barely below the $2.51 billion that analysts expected, in line with StreetAccount. 

Winrevair posted $70 million in revenue for the second quarter following its approval in March. Analysts had expected the treatment to book $59.4 million in sales. 

Merck estimates that roughly 40% of Winrevair sales are from doses administered to U.S. patients, with the rest coming from distributors constructing a list for the drug, Litchfield said. She noted that greater than 1,000 patients began Winrevair within the second quarter, largely reflecting prescriptions written in April and May.

Meanwhile, the corporate’s Type 2 diabetes treatment, Januvia, saw $629 million in sales, down 27% from the identical period a 12 months ago. Merck said the decline was primarily as a result of lower demand and costs of the drug, together with generic competition in several countries. 

Januvia is one in all 10 drugs targeted in ongoing Medicare drug price negotiations, a policy that goals to make costly medications more cost-effective for seniors. Those price talks, a key provision of President Joe Biden’s Inflation Reduction Act, will end initially of August.