Yahoo Finance UPDATE 3-Merck raises 2024 profit forecast on surging sales of cancer drug Keytruda
(Adds details from investor call in paragraphs 7 and 8, updates shares)
By Patrick Wingrove and Leroy Leo
April 25 (Reuters) - Merck & Co on Thursday raised its annual profit and revenue forecasts on the back of double-digit growth for its blockbuster cancer drug Keytruda, the world's top selling prescription medicine.
The New Jersey-based drugmaker said it expected annual earnings of $8.53 to $8.65 per share, up from its previous forecast of $8.44 to $8.59. Analysts had estimated earnings of $8.56 per share, below the midpoint of the new range.
Merck forecast 2024 sales between $63.1 billion and $64.3 billion, up from its previous view of $62.7 billion to $64.2 billion. Analysts are estimating sales of $63.83 billion.
Cancer immunotherapy Keytruda has been Merck's most important revenue driver over the past few years and is on track to reach $30 billion in sales by 2026 before losing exclusivity toward the end of the decade.
The drug is seeing growth from its use for additional types of cancers as well as higher patient demand, Chief Financial Officer Caroline Litchfield said.
Keytruda recorded sales of $6.95 billion for the first quarter, jumping 20% from the previous year and surpassing analysts' estimates of $6.66 billion, according to LSEG data.
The company also said on an investor call that it had seen good insurance coverage for Winrevair, a new potential blockbuster treatment for adults with high blood pressure caused by constriction of lung that won U.S. approval last month.
"At this stage, we are seeing a real acceptance of the value proposition of Winrevair in the United States," said Litchfield, adding that Merck had seen equal coverage across the government Medicare and Medicaid patient populations, as well as in commercial plans.
JP Morgan analyst Chris Schott said he expected rapid uptake of the drug from the second half of the year.
"Overall, we see today's results as consistent with the recent solid trends seen from Merck's business," Schott said.
Merck shares were up 2% in morning trade.
Gardasil, Merck's vaccine that prevents cancers caused by human papillomavirus (HPV), had sales of $2.25 billion for the quarter, up 14% and largely in line with analysts' estimates of $2.27 billion.
Merck said Gardasil growth was driven by strong demand in China, where it is also seeking approval for use of the vaccine in men.
Sales of Vaxneuvance, a shot that helps protect against infection caused by pneumococcus bacteria, rose 106% to $219 million for the first quarter.
The company's new forecast includes a 26 cents per share charge for its $680 million acquisition of cancer drug developer Harpoon Therapeutics, which closed in the first quarter of 2024.
On an adjusted basis, Merck earned $2.07 per share in the first quarter, beating estimates of $1.88. (Reporting by Patrick Wingrove in New York and Leroy Leo in Bengaluru; Editing by Shounak Dasgupta and Bill Berkrot)
