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Merck Hikes Forecast as Keytruda Tops $3 Billion for Quarter
Merck Raises Forecast as Cancer Drug Tops $3 Billion for Quarter
30 Oct 2019, 02:55 AM IST
(Bloomberg) -- Merck & Co. raised its full-year sales and profit forecast for the third time in a row on Tuesday, after the drugmaker’s market-leading cancer drug Keytruda handily beat an average of analysts’ estimates for the third quarter.
- Merck now expects 2019 sales of $46.5 billion to $47 billion, and adjusted earnings of $5.12 to $5.17 a share. Both are increases from July. For more on the results, click here.
Key Insights
- Keytruda posted sales of $3.07 billion in the quarter, up 62% from a year prior. Earlier this month, it was approved to treat some types of lung cancer in China, a major market, and the therapy gains sales every time global health authorities expand its use. The drug is on pace to sell more than $10 billion this year.
- Gardasil, Merck’s vaccines for human papillomavirus, also saw a surge in sales. There, too, China was a factor -- the company said its 84% sales growth in the country was driven in large part by the shot.
- The company didn’t make any news on one of the big questions about its future: Who will replace Chief Executive Officer Ken Frazier and research and development head Roger Perlmutter. The Kenilworth, New Jersey-based company told investors this summer that it is making preparations, but on Tuesday offered no new details.
Market Reaction
- Merck shares rose 1.8% to $83.65 at 9:39 a.m. in New York. The shares are up 7.6% this year as of Monday, the best gain among the major U.S. brand-name drug companies.
- Merck’s cancer immunotherapy drug Keytruda has been dominant, but its competitors are catching up. AstraZeneca Plc and Bristol-Myers Squibb Co. both recently reported positive clinical trial results lung cancer, the biggest market for the new drugs.
- That’s put investors’ focus on what’s next, including deals to bring in new assets: “We will continue to prioritize business development aimed at supplementing our portfolio and strengthening our pipeline,” Frazier said on a call with investors Tuesday.
- The drugmaker’s net income was $1.90 billion, down from $1.95 billion a year prior.
- To read Merck’s press release, click here.
To contact the reporter on this story: Riley Griffin in New York at rgriffin42@bloomberg.net
To contact the editor responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net
©2019 Bloomberg L.P.
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