TLDR
- Merck delivered an adjusted Q1 loss of $1.28 per share, surpassing analyst expectations of a $1.47 loss
- Total revenue climbed 5% year-over-year to $16.3 billion, exceeding Wall Street’s $15.8 billion projection
- Keytruda revenue reached $8 billion with 12% growth, while Gardasil declined 22% due to soft China market
- Winrevair revenue jumped 88% to $525 million; Januvia fell 29% as patent expiration approaches in May
- Annual revenue forecast increased to $65.8B–$67B with adjusted EPS 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 reported an adjusted loss of $1.28 per share in Q1, which was better than the anticipated $1.47 loss per share. The reported net loss stood at $4.24 billion, or $1.72 per share, primarily influenced by a $3.62 per share charge related to its $9.2 billion purchase of Cidara Therapeutics completed in January.
This represents a contrast to the year-ago period, when the company recorded a profit of $5.08 billion, or $2.01 per share.
Global revenue increased 5% to $16.29 billion, comfortably exceeding the FactSet consensus 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 roughly half of Merck’s total revenue. This figure encompasses both the traditional intravenous formulation and the recently introduced subcutaneous version, Keytruda SC.
The medication has attracted significant attention as its U.S. patent protection expires in 2028, at which point competing biosimilars are anticipated to launch.
Chief Executive Robert Davis has previously outlined strategies to construct a “patent wall” surrounding Keytruda through additional indications and combination therapies, with certain patents extending to 2029.
Gardasil Weakness Continues
Not all products demonstrated positive momentum. Gardasil, Merck’s HPV vaccine, experienced a 22% decline in sales on a foreign exchange-adjusted basis during Q1.
The decrease stems from persistent challenges in China, combined with reduced sales in Japan after the conclusion of a nationwide catch-up vaccination campaign. Unfavorable purchasing patterns in the U.S. public sector further contributed to the decline.
Januvia, the company’s diabetes medication, continued losing market share even before its May patent expiration. Q1 sales dropped 29% as generic alternatives captured market share ahead of the official exclusivity period ending.
Winrevair Picks Up the Slack
Counterbalancing these declines, Winrevair — Merck’s pulmonary arterial hypertension therapy — delivered another impressive performance. Revenue soared 88% compared to the prior year, reaching $525 million.
Bridion also made a positive contribution, with revenue advancing 7% to $472 million, though generic competition in overseas markets partially tempered this growth.
Merck increased its full-year outlook slightly. The pharmaceutical company now anticipates global revenue between $65.8 billion and $67 billion, an upward revision from the previous range of $65.5 billion to $67 billion.
Adjusted earnings per share guidance was enhanced to $5.04 to $5.16, compared with the earlier forecast of $5.00 to $5.15.
Earlier in the year, Merck cautioned that annual performance would face headwinds from patent expirations affecting Januvia and additional products. This outlook had negatively impacted the stock following fourth-quarter earnings.
The pharmaceutical firm secured FDA clearance last week for a once-daily two-drug HIV-1 treatment combination, expanding its product portfolio as it works to broaden revenue streams in advance of the Keytruda patent cliff.
MRK traded up 4.8% in premarket activity Thursday.
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