TLDR
- The pharmaceutical giant delivered an adjusted Q1 loss of $1.28 per share, surpassing Wall Street’s $1.47 loss projection
- Global revenue climbed 5% to reach $16.3 billion, exceeding analyst expectations of $15.8 billion
- The blockbuster oncology drug Keytruda generated $8 billion in sales with 12% growth, while Gardasil declined 22% due to weakened Chinese market conditions
- Winrevair revenue jumped 88% to $525 million; Januvia experienced a 29% decline as its May patent expiration approaches
- Annual revenue forecast increased 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 company recorded an adjusted loss of $1.28 per share for the first quarter, performing better than the $1.47 per share loss that analysts had anticipated. The reported net loss totaled $4.24 billion, equivalent to $1.72 per share, influenced by a $3.62 per share charge connected to the company’s $9.2 billion purchase of Cidara Therapeutics completed in January.
This figure contrasts with the year-ago period, when the company earned a profit of $5.08 billion, translating to $2.01 per share.
Global revenue expanded 5% to $16.29 billion, surpassing the FactSet consensus estimate of $15.85 billion.
Keytruda, the company’s flagship oncology therapy, continued to serve as the primary revenue driver. The treatment generated $8 billion during the quarter, representing 12% growth and comprising nearly half of total company revenue. This figure encompasses sales from both the traditional intravenous formulation and the recently introduced subcutaneous version, Keytruda SC.
Analysts have closely monitored the drug in anticipation of its U.S. patent expiration in 2028, when competing biosimilars at lower price points are anticipated to launch.
Chief Executive Officer Robert Davis has outlined strategies to establish a “patent wall” protecting Keytruda through additional approved indications and combination therapies, with certain patents extending through 2029.
Gardasil Faces Ongoing Challenges
Several products experienced headwinds during the period. Gardasil, Merck’s vaccine for human papillomavirus, recorded a 22% sales decline on a foreign exchange-neutral basis in the first quarter.
The decrease stems from persistent challenges in the Chinese market, combined with reduced sales in Japan following the conclusion of a government-sponsored catch-up vaccination initiative. Unfavorable purchasing dynamics in the U.S. public sector further contributed to the decline.
Januvia, the company’s diabetes medication, continues losing momentum in advance of its May patent expiration. First-quarter sales dropped 29% as generic alternatives capture market share before the official loss of exclusivity.
Winrevair Demonstrates Robust Growth
Among the positive developments, Winrevair — the company’s therapy for pulmonary arterial hypertension — delivered another impressive performance. Revenue soared 88% compared to the prior-year period, reaching $525 million.
Bridion also made a solid contribution, with sales advancing 7% to $472 million, although generic competition in overseas markets partially offset this growth.
Merck increased its annual forecast by a modest amount. The organization now anticipates worldwide revenue between $65.8 billion and $67 billion, revised upward from the previous projection of $65.5 billion to $67 billion.
Adjusted earnings guidance received an upward revision to a range of $5.04 to $5.16 per share, compared to the earlier forecast 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 additional products. This outlook had created downward pressure on the stock following fourth-quarter earnings.
The pharmaceutical maker secured FDA approval last week for a once-daily, two-drug regimen for treating HIV-1, strengthening its development pipeline as the organization works to broaden its revenue sources in preparation for the Keytruda patent expiration.
MRK shares advanced 4.8% during premarket trading on Thursday.
