© Reuters. FILE PHOTO: Signage at the Merck & Co. headquarters in Kenilworth, New Jersey, U.S., November 13, 2021. REUTERS/Andrew Kelly
by Michael Herman
(Reuters) – Merck & Co on Thursday forecast 2023 earnings below Wall Street estimates along with an expected sharp drop in sales of its COVID-19 antiviral treatment, with its shares falling about 2%.
The US drugmaker reported a higher-than-expected fourth-quarter profit on strong sales of the COVID pill molnupiravir in Asia and its hit cancer drug Keytruda.
But investors appear to be focused on the outlook for this year and shares fell 2% to $104.95, after falling as low as $102.80 on Thursday.
Merck forecast 2023 adjusted earnings of $6.80 to $6.95 per share, below analysts’ median estimate of $7.36.
The forecast was affected by a tax hit that Merck will have to pay in connection with its $1.35 billion acquisition of cancer drug developer Imago BioSciences, the company said.
The company also forecasts a sharp decline in molnupiravir sales in 2023, falling to around $1 billion from $5.68 billion in 2022. It forecast 2023 sales of $57.2 to $58.7 billion, down from $59.3 billion last year.
“Merck faces a more challenging 2023” as molnupiravir sales momentum builds in 2022, said Andrew Baum, an analyst at Citi.
Merck’s sales for the quarter were $13.83 billion, compared with $13.52 billion a year earlier. Analysts had expected sales of $13.67 billion, according to Refinitiv data.
Cancer immunotherapy Keytruda continues to grow, with fourth-quarter sales of $5.45 billion, up 19% from a year ago and roughly in line with analyst estimates.
Excluding items, Merck earned $1.62 per share, beating Wall Street expectations by 8 cents, according to Refinitiv.
Molnupiravir sales were $825 million in the quarter, well above double analyst estimates of around $358 million.
Merck Chief Executive Rob Davis said the pandemic wave that swept through Asia in the fourth quarter boosted sales of molnupiravir, which is sold under the brand name Lagevrio, particularly in Japan, South Korea and other areas of the Asia region. Peaceful.
“That was really the strength, and we’ve seen very good demand for Lagevrio in those markets,” Davis said in an interview. “In Japan, we are market leaders.”
The drug was not approved for use in China until December 30, so sales there were not a factor in the fourth quarter.
The human papillomavirus (HPV) vaccine Gardasil had sales of $1.47 billion, slightly exceeding analysts’ expectations.
