Merck & Co.
stock was heading higher on Thursday, after a rosy earnings report and solid guidance bolstered the case that the company will do just fine despite the eventual expiration of its patent on megablockbuster Keytruda.
Merck remains a darling of Wall Street analysts, and shares are up 20.1% over the past 12 months. The stock rose 2.9% Thursday morning.
Merck posted earnings of 3 cents a share on revenue of $14.6 billion in the fourth quarter, outpacing expectations among analysts surveyed by FactSet, who had expected Merck to report an 11-cent loss on revenue of $14.5 billion.
In a presentation for the earnings call, CFO Caroline Litchfield said Merck has “ample” dealmaking capacity. “We are in a position of financial and operational strength,” she said.
The company reported fourth-quarter sales of Keytruda at $6.6 billion, ahead of the $6.4 billion figure eyeballed by analysts. Merck is facing the potential loss of U.S. exclusivity for Keytruda in 2028, but, until then, continuing to best sales expectations for its blockbuster cancer drug should boost investor confidence.
Sales of the HPV vaccine Gardasil were $1.9 billion in the quarter, up from $1.5 billion in the same quarter last year, in line with the consensus estimate.
The company also announced a restructuring program that targets its manufacturing network but provided few details.
“We also made investments of approximately $30 billion in research and development in our ongoing effort to discover, develop and collaborate to propel the next generation of impactful innovations,” Merck chairman and CEO Robert M. Davis said in a statement.
Merck said it expects earnings of $8.44 to $8.59 a share on revenue of $62.7 billion to $64.2 billion in 2024. Wall Street had been forecasting 2024 earnings at $8.40 a share and revenue at $63.5 billion, roughly in line with those projections.
The stock had gained 10.8% so far this year as of Wednesday’s close, an identical performance to peer
Eli Lilly & Co.
amid a recent surge in pharma stocks after a rough stretch.
Johnson & Johnson
stock is up less than 2% this year.
Write to Jack Denton at [email protected]
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