Merck & Co. lifts outlook as Keytruda's Q3 sales top $4.5 billion

Headline results for the third quarter:

  • Pharmaceutical product sales: $11.5 billion, up 18%
  • Overall revenue: $13.2 billion (forecasts of $12.3 billion), up 20%
  • Profit: $4.6 billion, up 97%

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"Merck & Co. delivered another strong quarter with positive momentum across our business and meaningful progress across our pipeline," remarked CEO Rob Davis.

The company said the performance of its pharmaceuticals segment reflects strength in both its oncology and vaccine businesses. During the quarter, oncology was largely driven by Keytruda sales, which showed continued growth in non-small-cell lung cancer, as well as uptake in other indications, including renal cell carcinoma, head and neck squamous cell carcinoma, triple-negative breast cancer and high microsatellite-instability cancers.

Other results:

  • Keytruda: $4.5 billion (forecasts of $4.3 billion), up 22%, including $2.6 billion in the US, with global sales performance showing "strong momentum" across key tumour types and recent launches
  • Vaccines: $3.3 billion, up from $2.5 billion in the prior year
    • Gardasil/Gardasil 9: $2 billion, up 68%, driven by "strong" global demand, particularly in China where there was also increased supply, as well as in the US, which benefited from the timing of public sector purchases
    • Proquad/M-M-R II/Varivax: $661 million, up 15%, reflecting ongoing recovery of wellness visits in the US
    • RotaTeq: $227 million, up 8%
    • Pneumovax 23: $277 million, down 26%, hit by lower demand in the US where COVID-19 vaccinations were prioritised
  • Januvia/Janumet: $1.3 billion, up 1%
  • Bridion: $369 million, up 16%, due in part to the ongoing COVID-19 pandemic recovery
  • Simponi: $203 million, down 3%
  • Isentress/Isentress HD: $189 million, down 8%
  • Lynparza (alliance revenue): $246 million, up 25%, reflecting continued uptake in the US and Europe
  • Lenvima (alliance revenue): $188 million, up 32%, boosted by higher demand in the US, as well as in China following listing on the country's National Reimbursement Drug List

Looking ahead:

Merck now expects full-year revenues of between $47.4 billion and $47.9 billion, lifted from a prior range of $46.4 billion to $47.4 billion. Earnings per share are predicted to be between $5.65 and $5.70 this year, revised upwards from an earlier forecast of $5.47 to $5.57 per share. Analysts expect annual revenues of $47.6 billion on earnings of $5.63 per share. The company believes "global health systems and patients have largely adapted to the impacts of the COVID-19 pandemic," but it continues to expect the pandemic will have a net unfavourable impact of less than 3% on 2021 sales, all relating to the pharmaceutical segment.

Meanwhile, Merck said its experimental COVID-19 drug molnupiravir could bring in $5 billion to $7 billion in sales through the end of 2022, including between $500 million and $1 billion this year, if the drug gains US authorisation in December. "We're on pace to have 10 million courses ready before the end of this year, and more than double that next year," Davis said. An FDA advisory committee is convening on November 30 to discuss whether to recommend the oral antiviral, which Merck is co-developing with Ridgeback Biotherapeutics.

Recent data from the Phase III MOVe-OUT trial indicated molnupiravir could halve the risk of hospitalisations or death from COVID-19 compared to placebo in patients with mild-to-moderate disease. However, there have been concerns about molnupiravir's mechanism of action and that exposure to the drug could be mutagenic to host DNA. "I can tell you through the data we've seen and the studies we've done, we think this is a safe drug," Davis added. Earlier this week, Merck inked an agreement with a UN-backed group to help produce molnupiravir around the world.

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