Key Highlights
- The pharmaceutical company delivered an adjusted Q1 loss of $1.28 per share, surpassing analyst expectations of a $1.47 loss
- Global revenue climbed 5% to reach $16.3 billion, exceeding the Street’s $15.8 billion projection
- Blockbuster cancer drug Keytruda generated $8 billion in sales with 12% growth, while Gardasil revenue plunged 22% amid soft Chinese market conditions
- Winrevair revenue jumped 88% to $525 million; Januvia saw a 29% decline as its May patent expiration approaches
- Annual revenue outlook increased modestly to $65.8B–$67B with adjusted earnings per share guidance of $5.04–$5.16
Merck delivered first-quarter financial results on Thursday that exceeded analyst projections, propelling shares higher by 4.8% during premarket hours.
The pharmaceutical giant reported an adjusted quarterly loss of $1.28 per share, performing better than the anticipated $1.47 loss from Wall Street analysts. The company’s reported net loss totaled $4.24 billion, translating to $1.72 per share, primarily due to a $3.62 per share charge connected to its January acquisition of Cidara Therapeutics for $9.2 billion.
This represents a shift from the year-ago period, which saw earnings of $5.08 billion, or $2.01 per share.
Global sales advanced 5% to $16.29 billion, outperforming the FactSet consensus projection of $15.85 billion.
The company’s flagship oncology therapy Keytruda continued to serve as the primary revenue driver. The medication generated $8 billion during the quarter, representing 12% growth and accounting for roughly half of overall company revenue. These figures encompass both the conventional intravenous formulation and the recently introduced subcutaneous version, Keytruda SC.
Industry observers have been closely monitoring the drug as its U.S. patent protection expires in 2028, at which point lower-priced biosimilar alternatives are anticipated to launch.
Chief Executive Robert Davis has outlined strategies to establish a “patent wall” protecting Keytruda through additional indications and combination therapies, with certain patents extending through 2029.
HPV Vaccine Faces Headwinds
Some product lines showed declining performance. Revenue from Gardasil, Merck’s human papillomavirus vaccine, declined 22% on a currency-adjusted basis during the first quarter.
This decrease stems from ongoing challenges in the Chinese market, coupled with reduced sales in Japan following the conclusion of a nationwide catch-up vaccination initiative. Unfavorable purchasing patterns in the U.S. public sector also contributed to the shortfall.
The diabetes medication Januvia is experiencing erosion even ahead of its May patent expiration. First-quarter sales dropped 29% as generic alternatives capture market share in advance of the official exclusivity conclusion.
PAH Treatment Shows Momentum
Conversely, Winrevair — the company’s therapy for pulmonary arterial hypertension — delivered another impressive quarterly performance. Revenue soared 88% compared to the prior year, reaching $525 million.
Bridion also made positive contributions, with sales increasing 7% to $472 million, although international generic competition partially offset these gains.
Merck made slight upward adjustments to its full-year financial outlook. The organization now anticipates global revenue between $65.8 billion and $67 billion, revised from the previous range of $65.5 billion to $67 billion.
Adjusted earnings projections were elevated to $5.04 to $5.16 per share, compared with the former range of $5.00 to $5.15.
Earlier in the year, the company had cautioned that annual performance would face headwinds from patent expirations affecting Januvia and other medications. This guidance had pressured the stock following fourth-quarter earnings.
The pharmaceutical company secured FDA clearance last week for a once-daily two-drug HIV-1 treatment combination, introducing another product to its development portfolio as it works to broaden revenue sources in preparation for the Keytruda patent expiration.
Shares of MRK gained 4.8% in premarket activity Thursday.
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