Merck, the pharmaceutical giant, has exceeded earnings predictions for the first quarter of 2024. The company reported strong sales of its blockbuster cancer drug Keytruda and vaccine products, leading to higher revenue and adjusted earnings than expected. As a result, Merck has revised its outlook for the full year, raising and narrowing its revenue and earnings forecasts.
The company now expects 2024 sales to be between $63.1 billion and $64.3 billion, up from previous guidance of $62.7 to $64.2 billion. Additionally, Merck anticipates full-year adjusted earnings of $8.53 to $8.65 per share, compared to its prior forecast of $8.44 to $8.59 per share.
Merck’s positive outlook includes a one-time charge related to its acquisition of Harpoon Therapeutics and a negative impact from foreign exchange changes. Despite these factors, shares of Merck rose by 4% following the announcement of its strong financial results.
In terms of specific numbers, Merck reported adjusted earnings per share of $2.07 for the first quarter, surpassing the expected $1.88 per share. Revenue for the quarter was $15.78 billion, higher than the expected $15.20 billion.
The pharmaceutical division of Merck performed exceptionally well, with revenue increasing by 10% compared to the same period last year. This growth was largely driven by Keytruda, which generated $6.95 billion in sales, a 20% increase from the previous year. The increase in Keytruda sales can be attributed to its high demand for treating various types of cancer.
Merck also experienced significant growth in vaccine sales, particularly with Gardasil, a vaccine that prevents cancer caused by HPV. Gardasil brought in $2.25 billion in sales, a 14% increase from the first quarter of 2023. Another vaccine called Vaxneuvance, which prevents pneumococcal disease, saw a remarkable growth of 106% in sales.
While Merck celebrated its success with Keytruda and vaccines, there were some areas of decline. Sales of the Type 2 diabetes treatment Januvia decreased by 24% due to lower prices, reduced demand in the U.S., and generic competition in international markets. Additionally, sales of Merck’s Covid antiviral pill Lagevrio fell by 11% as the demand for Covid products declined with decreasing cases and public concern about the virus.
Despite these challenges, Merck remains optimistic about its future prospects. The company has a number of new deals and key drug launches in its pipeline that will help offset potential losses from the expiration of Keytruda’s patent in 2028. One notable drug is Winrevair, a medication approved in the U.S. to treat a progressive lung condition. Analysts predict that worldwide sales of Winrevair could reach $5 billion by 2030.
Furthermore, Merck is implementing a restructuring program to cut costs and improve its manufacturing network. The company recorded charges of $246 million related to restructuring in the first quarter.
Overall, Merck’s strong financial performance in the first quarter, driven by the success of Keytruda and vaccines, has positioned the company for continued growth. With a revised outlook for the full year and a promising pipeline of new drugs, Merck is poised to maintain its position as a leading pharmaceutical company in the market.
