Merck's fourth-quarter results top estimates, fueled by key cancer drugs and vaccines

By Eleanor Laise

Facing patent loss for top-selling Keytruda, drugmaker eyes near-term product launches

Merck & Co. Inc. on Thursday reported fourth-quarter earnings and sales that beat analysts' expectations, powered by strong growth in cancer and vaccine products.

The drugmaker reported a net loss of $1.226 billion, or 48 cents a share, after income of $3.017 billion, or $1.18 a share, in the year-earlier period. Adjusted earnings came to 3 cents a share, down from $1.62 a year earlier but beating the FactSet consensus of a loss of 11 cents a share. Revenue totaled $14.63 billion in the quarter, up 6% from a year earlier and topping the FactSet consensus of $14.489 billion.

The fourth-quarter earnings include a charge of $1.69 per share for Merck's collaboration with Japanese healthcare company Daiichi Sankyo.

For the full year 2024, Merck (MRK) said it expects total sales of $62.7 billion to $64.2 billion and adjusted earnings per share of $8.44 to $8.59. The 2024 earnings guidance includes a 26 cents-per-share one-time charge related to Merck's recently announced deal to buy cancer drugmaker Harpoon Therapeutics Inc.

As it faces a key patent expiration in 2028 for the blockbuster cancer drug Keytruda, which accounted for more than half of its total pharmaceutical sales in the fourth quarter, Merck is also banking on some near-term product launches to help power its future growth. U.S. regulatory decisions are expected in the first half of this year for Merck's sotatercept, a treatment for pulmonary arterial hypertension, and its V116 pneumococcal vaccine for adults.

"We have to be successful with sotatercept, and we have to be successful with V116," Merck CEO Robert Davis said at the J.P. Morgan Healthcare conference in January. "We're very focused on those near-term launches."

Fourth-quarter sales of Keytruda totaled $6.608 billion, up 21% from a year earlier and beating analyst expectations. Sales of the human papillomavirus vaccine Gardasil came to $1.871 billion, up 27% from a year earlier but missing the FactSet consensus of $1.917 billion.

Diabetes drug Januvia, which was one of the 10 drugs selected for the first round of Medicare drug price negotiation under the Inflation Reduction Act, generated $787 million in sales in the fourth quarter, down 14% from a year earlier, largely due to generic competition in some international markets and lower demand in the U.S., Merck said.

Sales of the COVID antiviral Lagevrio dropped 77% from a year earlier, to $193 million in the fourth quarter, partly due to lower demand in Japan and Australia.

Merck shares have climbed 10.8% in the year to date, while the S&P 500 SPX has gained 1.6%.

-Eleanor Laise

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

02-01-24 0632ET

Copyright (c) 2024 Dow Jones & Company, Inc.