Why Pharma Giant Merck's Shares Are Shooting Higher Today

Merck & Company, Inc. MRK Q3 sales reached $15.962 billion, up 7% Y/Y, beating the consensus of $15.320 billion, reflecting sustained growth in Oncology and Vaccines.

Lagevrio Q3 sales jumped 51% Y/Y to $640 million, and GARDASIL / GARDASIL 9 sales grew 16% to $2.585 billion.

Excluding Lagevrio (COVID-19 treatment), sales growth was 6%; excluding Lagevrio and the impact of foreign exchange, growth was 8%.

Pharmaceutical sales increased by 11% to $14.26 billion, primarily due to higher sales in oncology, vaccines, and hospital acute care, partially offset by diabetes.

KEYTRUDA sales grew 17% to $6.34 billion, driven by increased global uptake in earlier-stage indications, including triple-negative breast cancer (TNBC) and renal cell carcinoma (RCC), and continued strong global demand from metastatic indications.

Adjusted EPS came in at $2.13 (+15% Y/Y), surpassing the consensus of $1.95.

Adjusted EPS increases primarily due to operational strength in the business, as well as $0.22 of charges recorded in 2022 related to collaboration and licensing agreements with Moderna, Inc. MRNA, Orna Therapeutics and Orion Corporation.

The company's CEO Robert M. Davis highlighted "disciplined investments" to augment its diverse pipeline with the recently announced collaboration with Daiichi Sankyo.

2023 Guidance: Merck has revised FY23 revenue guidance to $59.7 billion-$60.2 billion versus the consensus of $55.98 billion (prior guidance: $58.6 billion-$59.6 billion).

Outlook includes approximately $1.3 billion of Lagevrio Sales.

MRK forecasts adjusted EPS of $1.33-$1.38 versus consensus of $2.86 (prior guidance: $2.95-$3.05).

The outlook reflects a negative impact from the upfront charge of $5.5 billion, or $1.70 per share, related to the collaboration agreement with Daiichi Sankyo.

Price Action: MRK shares are up 2.76% at $106.49 on the last check Thursday.