In the first quarter of this year, pharmaceutical giant Merck reported strong revenue and adjusted earnings, driven by the success of its cancer drug Keytruda and vaccine products. The company also raised its full-year revenue forecast to between $63.1 billion and $64.3 billion, up from previous guidance. Merck now expects full-year adjusted earnings of $8.53 to $8.65 per share, reflecting a one-time charge related to the acquisition of Harpoon Therapeutics and foreign exchange changes. The company continues to develop immune-based cancer drugs and has a positive outlook despite impending challenges such as Keytruda’s patent expiration in 2028.
Merck’s first-quarter net income was $4.76 billion, or $1.87 per share, compared to $2.82 billion, or $1.11 per share, in the same period last year. The company earned $2.07 per share for the quarter, excluding acquisition and restructuring costs. Revenue for the period reached $15.78 billion, a 9% increase year-over-year. Despite the upcoming expiration of Keytruda’s patent, Merck has launched new drugs like Winrevair to offset potential sales losses. The company is also cutting costs through a restructuring program announced in February to enhance its manufacturing network in the pharmaceutical and animal health divisions.
Merck’s pharmaceutical unit recorded $14.01 billion in revenue for the first quarter, up 10% from the previous year. Keytruda sales, the main driver of growth, reached $6.95 billion, a 20% increase. Sales of Gardasil, a vaccine for HPV-related cancer, totaled $2.25 billion, while Vaxneuvance, a pneumococcal disease preventive vaccine, saw a 106% increase in sales. However, sales of Januvia, a Type 2 diabetes treatment, declined by 24% due to lower prices, reduced demand, and generic competition. Merck’s Covid antiviral pill Lagevrio sales also fell by 11% during the quarter.
Merck’s animal health division generated $1.51 billion in sales for the first quarter, a modest 1% increase from the same period last year. In February, the company announced the acquisition of Elanco Animal Health’s aquatic business for $1.3 billion in cash. This transaction includes Elanco’s range of medicines, vaccines, and supplements for aquatic species, along with manufacturing plants and a research facility. The animal health division contributes to Merck’s overall revenue and diversification strategy, alongside the pharmaceutical unit.
Overall, Merck’s strong performance in the first quarter was driven by robust sales of Keytruda and vaccine products, which exceeded analysts’ expectations. The company’s revised full-year forecast indicates continued growth and profitability despite challenges like Keytruda’s impending patent expiration. Merck’s focus on developing new drugs, cost-cutting measures, and strategic acquisitions in both pharmaceutical and animal health sectors position it well for sustained success in the highly competitive healthcare industry.
