Merck reported strong first-quarter revenue and adjusted earnings, exceeding expectations due to the success of its cancer drug Keytruda and vaccine products. The company has raised and narrowed its full-year revenue and adjusted earnings forecasts, now expecting 2024 sales between $63.1 billion and $64.3 billion, up from previous guidance. Merck’s net income for the first quarter was $4.76 billion, or $1.87 per share, compared to $2.82 billion, or $1.11 per share, in the year-earlier period, with revenue of $15.78 billion. Keytruda’s patent expiration in 2028 is expected to impact sales, but Merck has new deals and drug launches to offset these losses, such as Winrevair, approved to treat a lung condition, and cost-cutting efforts under a restructuring program announced in February.
Merck’s pharmaceutical unit saw a significant revenue increase of 10% in the first quarter, generating $14.01 billion in revenue. Keytruda was a major driver of growth, bringing in $6.95 billion in revenue, a 20% increase from the previous year. Sales of Gardasil, a vaccine against HPV-related cancers, reached $2.25 billion, while Vaxneuvance, a pneumococcal disease prevention vaccine, saw sales of $219 million, a 106% increase. However, sales of Januvia, a Type 2 diabetes treatment, declined by 24% to $670 million due to lower prices, falling demand, and generic competition. Sales of Merck’s Covid antiviral pill Lagevrio also fell by 11% to $350 million.
Merck’s animal health division, which focuses on vaccines and medicines for animals, generated $1.51 billion in sales for the first quarter, up 1% from the previous year. The company recently announced plans to acquire Elanco Animal Health’s aquatic business for $1.3 billion in cash, including their portfolio of medicines, vaccines, and supplements for aquatic species. Merck’s ongoing efforts to cut costs under the restructuring program aim to improve its pharmaceutical and animal health manufacturing networks while offsetting potential revenue losses from Keytruda’s patent expiration in 2028.
Analysts had expected Merck’s first-quarter earnings per share to be $1.88 but it came in at $2.07, while revenue was higher than the expected $15.20 billion, at $15.78 billion. The company’s full-year adjusted earnings per share are forecasted to be between $8.53 and $8.65, up from the prior guidance. The growth in sales of Keytruda, Gardasil, and Vaxneuvance, along with successful launches of new drugs like Winrevair and ongoing efforts to reduce costs, have contributed to Merck’s positive financial performance in the first quarter of the year. Despite some declines in sales of certain products like Januvia and Lagevrio, the overall outlook for the company remains strong.
