Merck & Co. (MRK) posted better-than-expected fourth quarter earnings Thursday, thanks in part to impressive sales of its blockbuster cancer treatment Keytruda, but forecast softer near-term profits thanks in part to fading demand for its Covid therapies.
Merck said adjusted earnings for the three months ending in December came in at $1.62 per share, down 10% from the same period last year but firmly ahead of the Street consensus forecast of $1.54 per share. Group revenues, Merck said, rose 2% to $13.83 billion, against the $13.67 billion tally forecast by analysts that cover the pharma giant.
Keytruda sales surged 19% from last year to $5.45 billion, Merck said, while sales of its Covid antiviral pill Lagevrio, which it developed with Ridgeback Theraputics, fell 13% to $825million.
Looking into the 2023 financial year, Merck said it sees full-year non-GAAP earnings in the range of $6.8 to $6.95 per share, well shy of the Refinitiv forecast of $7.36 per share, with worldwide sales pegged between $57.2 billion and $58.7 billion.
"2022 was an exceptional year for Merck, which is a testament to the profound impact our medicines and vaccines are having on patients globally," said CEO Robert Davis. “I am extremely proud of what our talented and dedicated colleagues have accomplished scientifically, commercially and operationally."
"Our science-led strategy is working as we continue to build a sustainable engine that will drive innovation and generate long-term value for patients and shareholders well into the next decade,” he added.
Merck shares were marked 4.3% lower in early Thursday afternoon trading following the earnings release to change hands at $102.37 each, a move that still leaves the stock with a six-month gain of around 16.8%.
"Keytruda continues to be Merck’s most important value driver, generating 39% of the company’s total worldwide revenue last quarter," said Lee Brown, Global Sector Lead for Healthcare at Third Bridge.
"Merck remains focused on maximizing Keytruda’s value through expansion of indications, ongoing exploration of combo therapies, and migration to adjuvant treatment," he added.
