Merck lifted by soaring sales of go-to lung cancer drug
Sales of Keytruda grew 62.5% in the third quarter with its HPV vaccine Gardasil growing 26%
Bengaluru — On Tuesday, Merck said it expected drug Keytruda to continue its market dominance as an initial treatment for advanced lung cancer as sales of the drug topped $3bn in a quarter for the first time, beating Wall Street estimates.
Merck shares rose more than 2% to $84 in early trading.
Keytruda has become the go-to treatment for newly diagnosed advanced lung cancer, with eight out of 10 eligible US patients now receiving the therapy.
“We still think we are in the early innings of growth for this product,” CEO Robert Davis said in an interview. “In addition to new indications across different tumour types, you also see us moving into earlier lines of therapy.”
Rivals AstraZeneca and Bristol-Myers Squibb have been testing combinations of their cancer drugs in a bid to catch up in first-line advanced lung cancer, the most lucrative oncology market.
“While we know it’ll be eventually competitive,” Merck chief commercial officer Franklin Clyburn told analysts and investors. “We feel very confident in our position. What we’re hearing ... in the physician community is that they really believe Keytruda now has established itself as a standard of care in lung cancer.”
Keytruda sales in the third quarter surged 62.5% to $3.07bn, topping analysts’ estimates of $2.88bn, according to data from Refinitiv.
Higher demand in China, along with higher prices in the US, boosted third-quarter sales of Gardasil, the company’s vaccine to prevent cancer caused by human papillomavirus (HPV). Gardasil sales rose 26% to $1.32bn, topping estimates of $994.3m.
The company noted that sales growth for Gardasil will be constrained in 2020 as demand for the vaccine outpaces supply. It said it intends to significantly ramp up production by 2023 to meet demand outside the US.
Merck said it is increasing production from existing plants and commissioned construction of two new facilities for the vaccines.
Sales of medicines in China grew by 90%, excluding the impact of a stronger dollar, helping overall revenue grow nearly 15% to $12.40bn. Analysts had expected sales of $11.64bn.
Merck raised its 2019 adjusted earnings forecast to between $5.12 and $5.17 a share from a prior range of $4.84 to $4.94. Analysts were expecting $4.92 per share.
Excluding items, Merck earned $1.51 per share, sailing past the average analyst estimate of $1.24.