Will Keytruda & Gardasil Aid Merck (MRK) Sales in Q4 Earnings?
Merck MRK boasts more than six blockbuster drugs in its portfolio, with PD-L1 inhibitor, Keytruda, approved for several types of cancer, alone accounting for around 40% of its pharmaceutical sales. Keytruda has played an instrumental role in driving Merck’s steady revenue growth in the past few years.
Keytruda is already approved for the treatment of many cancers globally. Keytruda sales in the fourth quarter are likely to have been driven by continued strong momentum in metastatic indications, including in some types of NSCLC, renal cell carcinoma, head and neck squamous cell carcinoma, TNBC and MSI-H cancers and rapid uptake across recent earlier-stage launches. The Zacks Consensus Estimate for Keytruda’s sales is $5.57 billion, while our estimate is $5.62 billion.
Merck’s stock has risen 31.8% in the past year compared with an increase of 9.1% for the industry.
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In the United States, Keytruda is expected to show strong growth across all types of cancers, including uptake from launches in earlier-stage cancers, including triple-negative breast, renal cell carcinoma and melanoma. Keytruda is presently approved to treat six indications in earlier-stage cancers in the United States.
In outside U.S. market, growth is likely to have been driven by lung cancer indications and head and neck cancer and renal cell carcinoma. Last quarter, Merck said it is witnessing a strong start to recently approved earlier stage indications. It remains to be seen how sales in early-stage cancers picked up in the fourth quarter.
Merck’s HPV vaccine, Gardasil, is expected to be another key top-line driver in the fourth quarter. Gardasil’s ex-U.S. sales are expected to have been driven by strong demand in China and increased supply in the fourth quarter. The favorable timing of CDC purchasing, which benefited U.S. sales in the third quarter, is likely to have reversed in the fourth quarter. The Zacks Consensus Estimate for Gardasil is $1.5 billion, while our estimate is $1.45 billion.
Overall, strong global underlying demand across its business, particularly for Keytruda and Gardasil, is likely to have boosted sales growth in the fourth quarter like several previous quarters.
Zacks Rank & Stocks to Consider
Merck has a Zacks Rank #3 (Hold) currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Merck & Co., Inc. Price and Consensus
Merck & Co., Inc. price-consensus-chart | Merck & Co., Inc. Quote
Some better-ranked large drugmakers are Sanofi SNY, Roche RHHBY and Novo Nordisk NVO, all with a Zacks Rank #2 (Buy).
Estimates for Sanofi’s 2023 earnings per share have increased from $4.25 per share to $4.41 in the past 60 days. Sanofi’s stock has declined 5.4% in the past year.
Sanofi beat earnings expectations in all the trailing four quarters. The company delivered a four-quarter earnings surprise of 9.50%, on average. Sanofi is scheduled to report fourth-quarter results on Feb 3.
Estimates for Roche’s 2023 earnings per share have jumped from $2.79 per share to $2.85 in the past 60 days. Roche’s stock has declined 19.4% in the past year.
Roche is scheduled to report fourth-quarter results on Feb 2.
Novo Nordisk’s earnings estimates for 2023 have increased from $4.00 per share to $4.18 in the past 60 days. Novo Nordisk’s stock has risen 39% in the past year.
Novo Nordisk beat earnings expectations in three of the trailing four quarters. The company delivered a four-quarter earnings surprise of 3.09%, on average. Novo Nordisk will report fourth-quarter results before market open on Feb 1.
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