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Merck Hikes Forecast as Keytruda Tops $3 Billion for Quarter

Merck Raises Forecast as Cancer Drug Tops $3 Billion for Quarter

(Bloomberg) -- Merck & Co. raised its full-year sales and profit forecast for the third time in a row on Tuesday, after the drugmaker’s market-leading cancer drug Keytruda handily beat an average of analysts’ estimates for the third quarter.

  • Merck now expects 2019 sales of $46.5 billion to $47 billion, and adjusted earnings of $5.12 to $5.17 a share. Both are increases from July. For more on the results, click here.

Key Insights

  • Keytruda posted sales of $3.07 billion in the quarter, up 62% from a year prior. Earlier this month, it was approved to treat some types of lung cancer in China, a major market, and the therapy gains sales every time global health authorities expand its use. The drug is on pace to sell more than $10 billion this year.
  • Gardasil, Merck’s vaccines for human papillomavirus, also saw a surge in sales. There, too, China was a factor -- the company said its 84% sales growth in the country was driven in large part by the shot.
  • The company didn’t make any news on one of the big questions about its future: Who will replace Chief Executive Officer Ken Frazier and research and development head Roger Perlmutter. The Kenilworth, New Jersey-based company told investors this summer that it is making preparations, but on Tuesday offered no new details.

Market Reaction

  • Merck shares rose 1.8% to $83.65 at 9:39 a.m. in New York. The shares are up 7.6% this year as of Monday, the best gain among the major U.S. brand-name drug companies.
  • Merck’s cancer immunotherapy drug Keytruda has been dominant, but its competitors are catching up. AstraZeneca Plc and Bristol-Myers Squibb Co. both recently reported positive clinical trial results lung cancer, the biggest market for the new drugs.
  • That’s put investors’ focus on what’s next, including deals to bring in new assets: “We will continue to prioritize business development aimed at supplementing our portfolio and strengthening our pipeline,” Frazier said on a call with investors Tuesday.
  • The drugmaker’s net income was $1.90 billion, down from $1.95 billion a year prior.
  • To read Merck’s press release, click here.
Merck Hikes Forecast as Keytruda Tops $3 Billion for Quarter

To contact the reporter on this story: Riley Griffin in New York at rgriffin42@bloomberg.net

To contact the editor responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net

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