Merck & Co. Inc. (MRK) delivered a solid performance in the third quarter, exceeding revenue expectations and demonstrating its continued strength in the pharmaceutical industry. The company reported total sales of $16.66 billion, representing a 4% year-over-year increase and surpassing the consensus estimate of $16.47 billion. Excluding currency fluctuations, sales growth reached 7%.
The pharmaceutical unit, Merck’s core business, generated $14.94 billion in revenue, a 5% year-over-year increase. This growth was primarily driven by strong performance in oncology and cardiovascular segments. However, the company also experienced declines in diabetes, vaccines, and virology segments, which partially offset the overall positive growth.
Merck’s flagship cancer immunotherapy, Keytruda, continued to be a major revenue driver, generating $7.43 billion in revenue during the quarter, reflecting a 17% increase from the previous year. However, the company witnessed a decline of 11% in sales of Gardasil, a vaccine that protects against HPV-related cancers. The decline in Gardasil sales was attributed to lower demand in China, partially mitigated by higher sales in the U.S. driven by public-sector buying patterns, increased pricing, and robust demand in other international regions.
Another key highlight of the quarter was the performance of Winrevair (sotatercept), a newly approved treatment for adults with pulmonary arterial hypertension. The drug generated sales of $149 million in its first quarter on the market.
Despite the positive overall performance, Merck revised its full-year 2024 forecasts, narrowing its expectations. The company now projects 2024 sales between $63.6 billion and $64.1 billion, compared to its previous guidance of $63.4 billion to $64.4 billion and the consensus estimate of $64.2 billion. Additionally, Merck anticipates adjusted EPS of $7.72 to $7.77 for the year, compared to its earlier guidance of $7.94 to $8.04 and the consensus expectation of $7.74. This revised outlook reflects a negative impact of $0.24 per share due to business development transactions with Curon Biopharmaceutical and Daiichi Sankyo.
Despite the revised forecasts, Merck’s performance in the third quarter demonstrated the company’s resilience and continued dominance in the pharmaceutical industry. However, the decline in Gardasil sales highlights the ongoing challenges facing the company in the Chinese market. Investors will be closely monitoring Merck’s future performance and its ability to navigate these challenges to maintain its market leadership position.
