Merck's Top-Selling Diabetes Drugs Miss Sales Estimates

Updated on
  • Januvia, Janumet generate $1.44 billion in fourth quarter
  • Full-year revenue may decline as low as $38.7 billion

Merck & Co.’s top-selling and closely watched diabetes drugs missed analysts’ expectations in the fourth quarter, and the company offered guidance for 2016 with a low end of its range that fell short of estimates.

The Kenilworth, New Jersey-based pharmaceutical giant reported fourth-quarter adjusted profit of 93 cents a share, which beat expectations for 91 cents because of the performance of drugs including cholesterol treatment Zetia and its new cancer immunotherapy Keytruda.

Still, the diabetes pill Januvia is Merck’s top-selling product, and sales of $1.44 billion for that drug and another formulation, Janumet, fell short of estimates for $1.67 billion, according to data compiled by Bloomberg. The company said the sales decline was largely due to the timing of purchases. Januvia sales haven’t been growing in recent years, and the company could face even tougher competition if Eli Lilly & Co. is allowed to market a rival diabetes drug with new data that shows it significantly reduces the risk of cardiac events. Merck is relying on newer products like Keytruda and a recently approved hepatitis C treatment to help boost sales after four straight years of declines.

Fourth-quarter net income fell to $976 million, or 35 cents a share, from $7.32 billion, or $2.54, a year ago, when results were boosted by the sale of Merck’s consumer care unit. Fourth-quarter revenue fell 2.5 percent to $10.2 billion, while full-year sales dropped 6.5 percent to $39.5 billion.

The shares fell 2.8 percent to $49.02 in New York before the market opened.

Merck also issued its forecast for 2016, predicting that sales, at the low end of the range, will fall:

  • Adjusted per-share profit will be in a range of $3.60 to $3.75, compared to analysts’ estimates for $3.72
  • Sales will be $38.7 billion to $40.2 billion, compared to estimates for $40.25 billion

The drugmaker also gave details on the performance of key drugs: 

  • Januvia sales of $921 million missed expectations for $1.06 billion
  • Sales of human papillomavirus vaccine Gardasil totaled $497 million, topping estimates for $375.8 million
  • Cholesterol drug Zetia’s sales of $691 million exceeded forecasts for $639.3 million

Merck’s new hepatitis C drug was approved in January for use in adult patients with genotype 1 and 4 infections, and the company priced it at $54,600 for a 12-week regimen. That’s 42 percent lower than Gilead Sciences Inc.’s Harvoni, which retails at $94,500.

(Updates with shares in fifth paragraph.)
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