Merck sees recovery by year end after better-than-feared second quarter
(Reuters) - Merck & Co Inc (MRK.N) on Friday said it was expecting a more limited impact to the sales of its treatments and vaccines due to coronavirus lockdowns and expects a recovery by the end of the year.
Merck, which is testing vaccines and treatments for COVID-19, now expects a $1.95 billion hit to 2020 revenue from a drop in visits to hospitals and doctors’ offices due to the pandemic, a decrease from its prior estimates of $2.1 billion.
The company said it had seen veterinarian offices opening faster than prior expectations, helping sales at its animal health business, and resilient demand for its blockbuster cancer drug Keytruda.
“Business conditions have clearly improved and ... we believe the healthcare system is better positioned to provide patient access as we move through the balance of the year,” said Chief Financial Officer Robert Davis
Company shares were up 2.5% before the bell after Merck raised its full-year earnings forecast.
Merck said it was planning to move an experimental antiviral therapy it is developing along with Ridgeback Bio to large studies in September.
An experimental coronavirus vaccine that Merck acquired through its acquisition of Themis Bioscience is also on track to move to human trials in the third quarter
Merck is developing a separate vaccine for the coronavirus in collaboration with research non-profit IAVI.
Merck’s total sales fell 7.6% to $10.87 billion, as it took a $1.6 billion hit due to the COVID-19 pandemic, but beat analysts’ estimates of $10.39 billion.
Quarterly sales of Keytruda, Merck’s key growth driver, rose nearly 29% to $3.39 billion, beating the average estimate of $3.13 billion, according to Refinitiv data.
The company raised its full-year adjusted profit of between $5.63 to $5.78 per share, from a prior forecast of between $5.17 and $5.37.
Excluding items, Merck earned $1.37 per share, beating estimates of $1.04, according to IBES data from Refinitiv.
Reporting by Manas Mishra in Bengaluru and Michael Erman in Maplewood, New Jersey.; Editing by Saumyadeb Chakrabarty, Bernard Orr and Jonathan Oatis