Merck topped Wall Street's second-quarter expectations Tuesday, though it reported a per-share loss following its acquisition of Prometheus Bio. Merck stock closed down.
Overall, Merck's sales inched 3% higher, helped by double-digit jumps from blockbusters Keytruda and Gardasil. Keytruda is a cancer treatment while Gardasil protects against human papillomavirus. But that came amid an 83% decline for Lagevrio, Merck's Covid pill that it produces with Ridgeback Biotherapeutics.
Analysts expected the Lagevrio drop-off. Pfizer also reported massive sales declines for antiviral pill Paxlovid and Covid vaccine Comirnaty. Moderna has offered the same outlook for its Covid shot due to waning demand for pandemic-tied products.
On today's stock market, Merck stock skidded 1.3% to close at 105.28. Shares are on the low end of a flat base with a buy point at 119.65, according to MarketSmith.com.
Merck Stock: Lagevrio Decline Weighs
Total revenue came in at $15 billion, ahead of analyst projections for $14.49 billion, FactSet shows. Excluding the impact of exchange rates and Lagevrio's decline, Merck said total revenue climbed 14%. That's "the kind of growth that gets us excited," Third Bridge analyst Lee Brown said in a note to clients.
Merck also reported a per-share loss of $2.06, lower than estimates for a $2.18 loss. That included a charge of $4.02 per share related to the acquisition of Prometheus in June. Merck spent $10.8 billion to buy the company, which is working on a new way of tackling inflammation and fibrosis in the intestines.
Keytruda sales surged 19% to $6.3 billion while Gardasil revenue rocketed 47% to $2.5 billion. Both handily beat expectations. According to FactSet, Merck stock analysts called for $5.8 billion in sales of Keytruda and $2.1 billion from Gardasil.
"We expect continued growth of Keytruda, as we see the potential for increased usage in earlier stages of cancer and a solid update in approved (uses)," Edward Jones analyst John Boylan said in his note to clients. "Gardasil, an HPV vaccine, again saw strong sales in China, leading to better-than-forecast growth."
Though Lagevrio sales plummeted 83% to $203 million, that still topped expectations for $193 million.
Merck raised and narrowed its outlook for the year. The company now expects $58.6 billion to $59.6 billion in sales. That includes about $1 billion in sales from Lagevrio. Merck stock analysts had predicted full-year sales of $58.67 billion and $940 million from Lagevrio.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
