US pharma giant Merck reported better-than-expected quarterly earnings, fuelled by sales of its new Keytruda immuno-oncology drug and Januvia diabetes treatment, sending its shares up 2 per cent in premarket trading on Friday.
The second biggest US drug-maker, which operates as MSD outside the US and Canda, employs about 2,000 people in Ireland across six locations in Dublin, Cork, Carlow, Wicklow and Tipperary. It said revenue grew 1 per cent in the second quarter to $9.84 billion (€8.7bn), above analysts' average estimate of $9.78 billion.
Keytruda, a recently-approved treatment for melanoma and lung cancer that Merck is counting on to boost its earnings for years to come, posted sales of $314 million (€281m), about $20 million more than analysts had forecast.
The medicine, which takes the brakes off the immune system, is competing with Bristol-Myers Squibb’s similar Opdivo treatment. They belong to a new family of medicines called PD-1 inhibitors.
Previous treatments
Keytruda was approved in October 2015 for patients with advanced lung cancer who had failed to benefit from previous treatments.
A recent clinical trial suggested Keytruda is also effective in previously untreated patients, spurring hopes US regulators will soon expand approved use of the drug to that far larger population.
Combined sales of Januvia and a related diabetes drug called Janumet rose 2 per cent to $1.63 billion, topping forecasts by about $56 million.
Merck’s new Zepatier treatment for hepatitis C, which has been on the US market for about six months, contributed $112 million in sales during the quarter.
Credit Suisse analyst Vamil Divan said growing sales of newer drugs like Keytruda and Zepatier will likely be offset by future declines for older products, including Januvia and cholesterol fighters, Vytorin and Zetia.
Overweight
But JP Morgan analyst
Chris Schott
maintained his “overweight” rating on Merck, citing confidence in prospects for Keytruda, which is also being studied for many other types of cancer.
Merck earned $1.21 billion, or 43 cents per share, in the quarter. That compared with $688 million, or 24 cents per share, in the year-earlier period, when Merck took charges for its acquisition of Cubist Pharmaceuticals.
Excluding special items, the company earned 93 cents per share, ahead of the average analyst estimate of 91 cents, according to Thomson Reuters.
Merck now expects full-year earnings per share of $3.67 to $3.77, excluding special items. It previously forecast $3.65 to $3.77 per share.
