Medicine Despite pandemic, Merck increases 2Q net, profit forecast

Medicine Despite pandemic, Merck increases 2Q net, profit forecast

Medicine

FAIRLESS HILLS, PA (AP) — Surging sales of its cancer medicines and reduced spending across the board helped Merck overcome a big hit from the coronavirus pandemic and increase its profit 12% in the second quarter.

The drugmaker boosted its financial forecast for the year Friday even as it spends heavily on the development of two experimental vaccines and a possible treatment for COVID-19. The results blew past analysts’ expectations, and the improved forecast helped drive up Merck shares early Friday.

“Despite the impact COVID-19 had on patient access to health care providers, Merck continued to execute well with business momentum improving through the quarter,” CEO Kenneth Frazier said in a prepared statement.

Merck said the pandemic kept many people away from doctors and veterinarians, cutting into sales for nearly all medicines produced by the Kenilworth, New Jersey, company. Revenue fell 8%, to $10.87 billion, from $11.76 billion.

However, sales of immuno-oncology blockbuster Keytruda and other cancer drugs rose, partly due to approvals for new uses or patient groups.

The maker of Januvia diabetes pills posted net income of $3.0 billion, or $1.18 per share, up from $2.67 million, or $1.03 per share, a year earlier.

Adjusted for one-time items, income came to $3.48 billion, or $1.37 per share.

Analysts surveyed by FactSet were expecting adjusted earnings of $1.06 per share and sales of $10.4 billion.

Merck said it now expects revenue for all of 2020 to range from $47.2 billion to $48.7 billion, and adjusted earnings per share of $5.63 to $5.78. That’s up from its April forecast of $46.1 billion to $48.1 billion in revenue and earnings per share of $5.17 to $5.37.

Sales of prescription medicines dropped 7%, to $9.68 billion. Sales of medicines for pets and livestock dipped 2%, to $1.1 billion.

Keytruda continued its impressive growth toward potentially becoming the world’s top-selling medicine, with revenue soaring 29% in the quarter, to $3.39 billion. Revenue also jumped for Lynparza and Lenvima, two cancer drugs it cells with partner AstraZeneca.

In premarket trading, Merck shares rose $2.03, or 2.3%, to $81.10.

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