Merck’s first-quarter profit dipped 1% as people continued to put off doctor and hospital visits early this year due to the COVID-19 pandemic, and it spent more on research and production.
While it fell short of Wall Street profit expectations, Merck said it expects sales of key drugs to rise for the remainder of 2021 and maintained its profit forecast for the year.
The drugmaker said it's focusing its efforts on fighting the pandemic on two fronts: its experimental COVID-19 treatment molnupiravir and helping to manufacture Johnson & Johnson's COVID-19 vaccine under a recent deal. That partnership follows the failure of two experimental vaccines that Merck dropped after early results showed they weren't very effective.
Merck & Co. plans to soon begin late-stage testing of molnupiravir, a pill meant for treating outpatients to prevent hospitalizations. The company, based in Kenilworth, New Jersey, also is evaluating the drug's potential for preventing infection in people recently exposed to the COVID-19 virus.
The maker of cancer blockbuster Keytruda and Januvia diabetes pills said Thursday that net income was $3.18 billion, or $1.25 per share, down from $3.22 billion, or $1.26 per share, a year earlier.
Excluding one-time gains and costs, adjusted earnings came to $3.56 billion, or $1.40 per share. Wall Street was expecting $1.63 per share, according to a survey by Zacks Investment Research.
Revenue totaled $12.08 billion, up just a tad from $12.06 billion last year.
In early trading, Merck shares fell $1.55, or 2%, to $75.54.
Merck’s prescription drug sales were hurt by generic competition to several drugs, and the pandemic reduced sales of medicines used in hospitals, a key business for Merck. In addition, sales of Merck’s portfolio of vaccines for children and adults fell as the country focused on a massive COVID-19 vaccination campaign at the start of the Biden administration.
Prescription drug sales were flat at $10.68 billion, while veterinary medicines jumped 17% to $1.42 billion, mainly driven by higher sales of products for pets.
As per usual, medicine sales were led by cancer immunotherapy Keytruda, which hauled in $3.9 billion in the quarter, nearly one quarter of total revenue. Januvia and combo drug Janumet for Type 2 diabetes brought in a total of $1.3 billion.
During the quarter, Merck struck a deal to partner with Gilead Sciences in developing long-acting HIV treatments that combine two drugs the companies discovered. And on April 1, Merck completed the acquisition of Pandion Therapeutics, a developer of therapies for autoimmune disorders, an area where Merck hopes to expand.
Chief executive Ken Frazier, who is retiring on June 30, said he's confident in Merck's future and new leadership.
Merck expects adjusted earnings per share for 2021 of $6.48 to $6.68, unchanged from forecasts in January. It expects revenue for the year to grow 8% to 10%, to a range of $51.8 billion and $53.8 billion, also the same as its last forecast.
Merck plans on June 2 to complete the spinoff of its Organon women’s health business, which will now also include off-patent former blockbusters like respiratory drugs Singulair and Nasonex, plus Merck’s unit that makes biosimilars, or near-copies of pricey biologic drugs.
If the spinoff happens by then, Merck plans to update its financial forecasts.
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A portion of this story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on MRK at https://www.zacks.com/ap/MRK