Merck Posts Surprise Quarterly Profit Against An Expected Loss, Oncology And Vaccines Drive Growth

Merck & Co Inc’s MRK fourth-quarter 2023 sales reached $14.63 billion, up 6% Y/Y, beating the consensus of $14.50 billion.

Excluding Lagevrio and the impact of foreign exchange, growth was 14%.

Pharmaceutical sales increased by 8% to $13.14 billion, driven by oncology, vaccines, and hospital acute care growth, partially offset by a decline in virology due to Lagevrio (COVID-19 treatment) and diabetes.

Cancer drug Ketruda sales grew 21% to $6.61 billion. Lagevrio’s fourth-quarter sales declined 77% Y/Y to $193 million, and Gardasil/Gardasil sales grew 27% to $1.87 billion.

Adjusted EPS came in at $0.03, down from $1.62 a year ago, surpassing the consensus loss of $(0.11), primarily due to the charge in 2023 related to the collaboration with Daiichi Sankyo and the unfavorable impact of foreign exchange.

Also Read: Medicare’s Historic Negotiations To Lower Drug Prices, Analysts Anticipate Upto Potential Price Cuts Of 60%.

“We also made investments of approximately $30 billion in research and development in our ongoing effort to discover, develop, and collaborate to propel the next generation of impactful innovations, said Robert Davis, chairman and CEO.

Guidance: Merck forecasts fiscal year 2024 sales of $62.7 billion -$64.2 billion versus the consensus of $63.31 billion.

The company sees 2024 adjusted EPS of $8.44-$8.59 compared to the consensus of $8.42.

In early January 2024, Merck announced the acquisition of Harpoon Therapeutics Inc HARP, which is expected to close in the first half of 2024 and result in a non-tax deductible charge of approximately $650 million of R&D expense included in non-GAAP results. 

The guidance includes the impact of Harpoon’s transaction of full-year non-GAAP EPS of approximately $0.26 per share.

Read Next: Merck’s Multi-Billion Cancer Drug Keytruda Improves Disease-Free Survival In Advanced Bladder Cancer After Surgery, Data Shows.

Price Action: MRK shares are up 2.59% at $123.92 on the last check Thursday.

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