TRENTON, N.J. (AP) — A big jump in U.S. medicine sales, particularly for its key cancer drug, helped Merck & Co. swing to a $2 billion profit from a $56 million loss a year earlier…
TRENTON, N.J. (AP) — A big jump in U.S. medicine sales, particularly for its key cancer drug, helped Merck & Co. swing to a $2 billion profit from a $56 million loss a year earlier due to large one-time charges.
The maker of blockbuster cancer drug Keytruda and Januvia diabetes pills beat Wall Street’s third-quarter profit expectations and raised its 2018 profit forecast.
The Kenilworth, New Jersey, drugmaker on Thursday reported net income of $1.95 billion, or 73 cents per share. Adjusted for merger and acquisition costs, income amounted to $1.19 per share, 3 cents better than expected.
Revenue totaled $10.79 billion, up 5 percent from 2017’s third quarter.
The increase was entirely due to sales jumping 80 percent to $1.9 billion for Merck’s top seller, Keytruda, which boosts the body’s immune system to better fight cancer. Keytruda sales should continue soaring as the immuno-oncology drug keeps winning approvals for treating additional cancer types. And last weekend at a huge cancer specialists’ conference in Europe, Merck presented numerous patient studies showing strong results for Keytruda and other medicines in treating a variety of cancer patients, data likely to increase prescriptions for its medicines.
Merck’s Gardasil 9 vaccine, which protects against a sexually transmitted virus that causes cancer, posted a 55 percent sales increase to top $1 billion. It recently won U.S. approval for use in adults aged 27 to 45, millions more potential patients than the adolescents and young adults for whom it was already approved, and its launch in China is boosting sales.
“We have great momentum as we close out the year,” CEO Kenneth Frazier told analysts during a conference call.
Total prescription drug sales climbed 5 percent to $9.66 billion in the quarter. But sales of many older medicines, including former sales leader Januvia, declined due to increasing competition and insurers demanding bigger price discounts.
Sales of veterinary medicines edged up 2 percent to $1.02 billion.
U.S. sales climbed 9 percent to $5.03 billion. Overseas sales edged up 1 percent to $5.76 billion.
“This was a solid quarter for Merck,” despite sales being slightly below expectations, Edward Jones analyst Ashtyn Evans wrote to investors.
She cited Merck’s progress in testing Keytruda and some new drugs and vaccines, plus news it will boost its quarterly dividend 15 percent to 55 cents per share and repurchase another $10 billion of its shares, as signs of executives’ confidence in long-term growth. Merck noted it now plans to spend $16 billion on capital projects through 2022, up $4 billion from its February prediction.
Merck now expects adjusted full-year earnings of $4.30 to $4.36 per share, up from its August forecast of $4.22 to $4.30 per share. Merck narrowed its 2018 revenue forecast to $42.1 billion to $42.7 billion, from its August forecast of $42 billion to $42.8 billion.
In morning trading, Merck shares fell 2.4 percent, to $68.85.
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