Merck raises 2024 profit forecast on strong cancer, HPV drugs sales

By Thomson Reuters Apr 25, 2024 | 5:33 AM

By Patrick Wingrove

(Reuters) – Merck & Co on Thursday raised its annual profit and revenue forecast on the back of strong sales for its blockbuster cancer drug Keytruda and human papillomavirus (HPV) vaccine Gardasil.

The New Jersey-based drugmaker said it expected earnings of $8.53 and $8.65 per share, up from its previous prediction of $8.44 to $8.59, and sales of $63.1-$64.3 billion for the year.

Merck’s new forecast includes a $0.26 per share charge for its $680 million acquisition of cancer drug developer Harpoon Therapeutics, which closed in the first quarter of 2024, the company said.

The drugmaker in February forecast 2024 sales between $62.7 billion and $64.2 billion. Analysts, on average, estimate annual earnings per share of $8.56 and sales of $63.83 billion, according to LSEG data.

Merck reported first-quarter profit of $2.07 per share on an adjusted basis, compared with analysts estimates of $1.88 per share, according to LSEG data. Sales came in at $15.8 billion, rising 9% and beating average analyst predictions of $15.2 billion for the quarter.

Sales of Keytruda stood at $6.9 billion for the quarter, jumping 20% from the previous year and surpassing analysts’ average estimate of $6.66 billion.

Keytruda, the world’s top selling drug in 2023, has been Merck’s key revenue driver over the last few years and is expected to top $30 billion in sales by 2026 before losing exclusivity towards the end of the decade.

Gardasil, Merck’s vaccine that prevents cancers caused by HPV, brought in first quarter sales of $2.25 billion, rising 14%in line with analysts’ average estimate of $2.27 billion.

Merck said Gardasil growth was driven by strong demand in China, where it is seeking approval for use of the vaccine in men.

Sales of Vaxneuvance, a shot that helps protect against infection caused by pneumococcus bacteria, rose 106% to $219 million for the first quarter.

The U.S. Food and Drug Administration last month approved Merck’s potential blockbuster treatment for adults with high blood pressure, although the company said it expected to launch the drug by the end of this month.

The therapy, branded Winrevair, is approved for treating pulmonary arterial hypertension, which affects around 40,000 people in the United States.

Merck said in February it expects $20 billion from new oncology products in development by the mid-2030s, nearly double its prior oncology pipeline forecast for over $10 billion.

The drugmaker also said it has launched a restructuring program to optimize its manufacturing operations related to human and animal health, and expects to complete the program by the end of 2031.

(Reporting by Patrick Wingrove in New York; Additional reporting by Leroy Leo in Bengaluru; editing by Miral Fahmy)