Merck's blockbuster cancer drug, Keytruda, continued to pull its weight in the third quarter, helping deliver a beat-and-raise report. Merck stock posted a moderate gain.
During the September quarter, Merck earned an adjusted $2.13 per share on $15.96 billion in sales. Sales popped 7% and topped expectations for $15.3 billion, according to FactSet. Earnings jumped 15% and were easily north of forecasts for $1.85.
Keytruda accounted for roughly 40% of the company's sales and continues to be Merck's biggest single product. Revenue from the cancer drug ran up 17% to $6.34 billion, besting projections for $6.2 billion.
On the stock market today, Merck stock rose 1.9%, closing at 105.55. Shares have fallen off somewhat after peaking in May. Today, Merck stock has a Relative Strength Rating of 66, putting it in the top third of all stocks when it comes to 12-month performance, according to IBD Digital.
Covid Benefit Continues For Merck Stock
The best performances in the quarter came from Merck's Lagevrio and Lenvima. The former is a Covid pill developed in partnership with Ridgeback Biotherapeutics. Lagevrio sales surged 47% to $640 million. Lenvima, a cancer drug, brought in $260 million, up 29%.
But Merck doesn't expect Lagevrio to be a long-term sales contributor. Excluding that drug, sales rose a modest 6%.
Notably, revenue from human papillomavirus vaccine Gardasil climbed 13% to $2.59 billion. However, sales of diabetes medicine Januvia slumped 26% to $835 million.
For the year, Merck guided to $59.7 billion to $60.2 billion in sales. That's up from Merck's guidance for $58.6 billion to $59.6 billion issued three months ago. Merck stock analysts expected a lower $59.3 billion in sales.
The company expects earnings per share of $1.33 to $1.38. That's well below earnings forecasts for $3.03, but now includes a negative impact from an agreement with Daiichi Sankyo to co-develop a new cancer treatment.
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