Merck expects at least $5 billion in sales of its Covid pill this year, but Merck stock fell Thursday on lighter-than-expected earnings guidance.
The company calls for $5 billion to $6 billion in sales of its Covid pill this year. That would account for roughly 10% of total revenue expectations. Molnupiravir, developed with Ridgeback Biotherapeutics, is one of two antiviral pills on the U.S. market. The other is Pfizer's Paxlovid.
Evercore ISI analyst Umer Raffat says Merck already has contracts in place for roughly $5.4 billion. The U.S. government also has options for about $1.4 billion. The company hasn't yet announced its contracts with the European Union. So, there could be upside to the outlook.
But guidance for $7.12-$7.27 per share in adjusted earnings lagged forecasts. Analysts saw $7.30 per share. Overall, Merck expects full-year sales to be $56.1 billion to $57.6 billion. At the midpoint, sales would grow nearly 17%. Sales guidance narrowly topped expectations.
On the stock market today, Merck stock fell 3.7% to 79.01. Shares are currently consolidating with a buy point at 91.50, according to MarketSmith.com.
Merck Stock: Keytruda Continues Strong Growth
During the fourth quarter, adjusted Merck earnings were $1.80 a share. Earnings rocketed 84% and beat forecasts by 27 cents per share. Sales popped 24% to $13.52 billion. That easily topped the Street call for $13.16 billion in sales, according to FactSet.
Importantly, sales of oncology blockbuster Keytruda surged 16% to $4.58 billion. Keytruda is Merck's biggest moneymaker. Human papillomavirus vaccine Gardasil generated $1.53 billion, rocketing 50%. Revenue from diabetes med, Januvia, inched up 6% to $1.39 billion.
Animal-health sales also jumped 8% to $1.26 billion despite rivalry from Zoetis with a new parasiticide.
Evercore's Raffat reiterated his outperform rating on Merck stock.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
