Merck (MSD) has raised its full-year earnings forecast after posting higher-than-expected profits in its third quarter results yesterday.
Sales in the third quarter were up by a modest 2%, with $12.55bn reported in the period this year compared to $12.39bn last year.
With regards to its net income, adjusted for GAAP, Merck reported a 55% increase to $2.94 from $1.90 in the same period last year.
The growth in profits was mainly due to increasing demand for certain drugs, including its blockbuster checkpoint inhibitor Keytruda (pembrolizumab), and its bacterial pneumonia vaccine.
In the third quarter, sales of Keytruda grew by 24% to $2.2bn reflecting growing momentum in a number of non-small cell lung cancer indications, as well as uptake in other areas including adjuvant melanoma and bladder cancer.
While sales of its papillomavirus vaccine Gardasil declined due to lower demand in the US and Hong Kong thanks to the COVID-19 pandemic, Merck reported higher sales of its pneumococcal vaccine Pneumovax 23.
This growth was particularly driven by higher sales volumes in the US, Europe and Japan, which can be attributed to an increased demand for pneumococcal vaccination during the COVID-19 pandemic.
On the expenses front, research and development costs were up by 6% to $3.4bn in the quarter, as a result of an increase in upfront payments related to collaborations and licence agreements.
On top of that, expenses related to clinical development and investments in discovery research and early drug development climbed in the period.
For the full year, Merck is now expecting a negative impact to revenue of approximately $2.35bn due to the COVID-19 pandemic, up from the previously forecasted $1.95bn.
The company has narrowed and raised its full-year revenue estimates to be between $47.6bn and $48.6bn, while it has narrowed and lowered its full year GAAP earnings per share (EPS) to between $4.55 and $4.65.
Merck is currently developing an oral antiviral candidate for the treatment of COVID-19, as well as two vaccine candidates for the novel coronavirus – V591 and V950.
V591 uses a measles virus vector platform to target the virus and is currently in phase 1 development, whereas V590 uses a recombinant vesicular stomatitis virus platform and is set to enter phase 1 shortly.
We have made significant progress over the last few months across our COVID programme and our learnings reinforce our confidence that the approaches we’ve selected are among the most promising,” said Ken Frazier, chief executive officer of Merck in the Q3 earnings call.
“We are moving forward with dispatch and diligence, designing our clinical studies in a manner that, if successful, will provide physicians and patients confidence that our candidates are safe, effective, simple to administer and distribute, and capable of being used not just in millions but billions of people,” he added.