Merck beats quarterly sales expectations as Keytruda fuels growth
By Deena Beasley and Mariam Sunny
April 30 (Reuters) - Merck on Thursday beat first-quarter sales expectations on strong demand for its aging cancer immunotherapy Keytruda, sending its shares up as much as 5% in premarket trading.
The drugmaker reported a loss for the first quarter as it booked a $3.62-per-share charge for the acquisition of antiviral drug maker Cidara Therapeutics.
Investors are focused on Merck's long‑term growth story as it absorbs short‑term acquisition costs and works to reduce reliance on Keytruda, which is set to lose patent protection later this decade.
Sales of Keytruda, the world's biggest-selling prescription medicine, rose 12% to $8 billion, topping estimates of $7.6 billion. The total includes $128 million for a newer injected version of the drug, which had been available only as an infusion.
The results came in ahead of expectations, J.P.Morgan analysts said, adding that investor focus remains on data from advanced candidates in its pipeline in 2026 and 2027.
The drugmaker has bulked up its late-stage pipeline in recent years through in-house development, acquisitions and partnerships.
"We're in the midst of initial launches of over 20 new products, almost all of which have blockbuster potential, across a broad set of therapeutic areas," CEO Rob Davis said in his prepared remarks posted on the company's website.
Merck's first-quarter revenue rose 5% to $16.3 billion, ahead of analysts' estimate of $15.8 billion, as compiled by LSEG.
Adjusted loss for the quarter was $1.28 a share, smaller than analysts' expectations for a loss of $1.51 a share.
For the full year, Merck narrowed its previous forecast range, pushing up the midpoint. The company said it now expects a 2026 profit of $5.04 to $5.16 per share on sales of $65.8 billion to $67 billion, compared with a previous estimate of $5.00 to $5.15 per share on sales of $65.5 billion to $67 billion.
"The guidance revision looks less compelling, particularly after the conservative guide to start the year," said Cantor analyst Carter Gould.
Merck said the outlook does not reflect any impact from its planned acquisition of biotech Terns Pharmaceuticals, which will result in a one-time charge of $2.35 per share.
Sales of lung disease drug Winrevair rose 88% to $525 million, exceeding the $479 million expected by analysts.
Sales of human papillomavirus vaccine Gardasil fell 19% to $1.07 billion, driven by lower demand in China and Japan.
(Reporting By Deena Beasley and Mariam Sunny; Editing by Bill Berkrot and Devika Syamnath)