Merck’s Profit Beats Estimates on Diabetes Drug Salesby
Hepatitis C drug Zepatier is growing, gaining access
Sales of newly launched cancer drug Keytruda almost triples
Merck & Co.’s second-quarter profit topped analysts’ estimates, led by sales growth from its diabetes drug Januvia and newly introduced cancer treatment Keytruda.
Merck is trying to rebound from four consecutive years of declining revenue and is relying on products like Januvia, Keytruda and the hepatitis C treatment Zepatier to help it return to growth. Keytruda sales almost tripled to $314 million, topping the $287 million estimate of analysts surveyed by Bloomberg.
The company is optimistic about Keytruda’s approval for broader use in lung cancer, based on data released in June that showed an advantage over chemotherapy. The full results should be published soon and Merck is working with U.S. regulators, the company said in a conference call with analysts. Keytruda’s main competitor, Bristol-Myers Squibb Co.’s Opdivo, is also approved in lung cancer, though not yet as a first-line therapy, a large growth opportunity for the products.
“We have data in first-line lung that could potentially be practice-changing for physicians,” Global Human Health President Adam Schechter said in an interview Friday.
Profit excluding some items was 93 cents a share, the company said in a statement, beating the 91-cent average of estimates compiled by Bloomberg. The Kenilworth, New Jersey-based drugmaker’s revenue increased 0.6 percent to $9.84 billion, compared with the $9.79 billion predicted by analysts.
The shares gained less than 1 percent to $58.57 at 11:27 a.m. in New York.
Sales of Januvia and the related Janumet rose 2.3 percent to $1.63 billion, compared with the $1.6 billion average of analysts’ estimates. The diabetes pill -- Merck’s biggest product -- may increasingly face competition from Eli Lilly & Co.’s Jardiance, which could receive approval from regulators for claims that it reduces the risk of death from cardiac events.
Zepatier sales totaled $112 million, falling short of estimates of $124 million. Schechter said the company is pleased given it only recently entered the drug’s market, which is dominated by Gilead Sciences Inc. and AbbVie Inc.
“We’re only six months into the launch,” Schechter said in an interview. “We need to get more access” and build market share.
The company is making some progress already. Express Scripts Holding Co. and UnitedHealth Group Inc. gave Zepatier equal priority on their Medicare prescription drug plans this month, the company told analysts on a conference call. Europe also recently approved the drug, which will begin sales there later this year or in early 2017.
Arthritis drug Remicade’s sales fell to $339 million, beating estimates of $325 million. Schechter said biosimilars are siphoning use in Europe, a trend likely to accelerate. Patients there are already switching from Remicade to biosimilars, and the company is waiting on a European study for more details.
Other highlights from the second quarter:
- Merck narrowed its 2016 revenue projection to $39.1 billion to $40.1 billion, compared with a May estimate of $39 billion to $40.2 billion. Adjusted earnings should be $3.67 to $3.77 a share, compared with a past projection of $3.65 to $3.77.
- Net income jumped 75 percent to $1.21 billion, or 43 cents a share, from $687 million, or 24 cents, a year earlier.