Sotatercept

With sales of $6.9 billion in the first quarter, cancer powerhouse Keytruda accounted for 44% of Merck's revenue of $15.8 billion. In Merck’s quarterly conference call on Thursday, it took CEO Rob Davis less than a minute to tout newly approved pulmonary arterial hypertension (PAH) treatment Winrevair (sotatercept) and what the emergence of the potential blockbuster means for the company. “We’ve demonstrated that we can leverage our deep discovery prowess to identify important acquisition targets and then add significant value through our powerful clinical research engine, our regulatory expertise and our commercial scale,” Davis said. Four months into Davis’ tenure as CEO in 2021, the company acquired sotatercept in an $11.5 billion buyout of Acceleron. Data analytics group FactSet has projected sales of Winrevair to reach $3.9 billion by 2029. “Strategic business development focused on the best external science remains an important priority,” the CEO said. With cancer powerhouse Keytruda losing patent protection in 2028 in the United States and in 2031 in Europe, Davis is anxious to show that Merck can find replacements for the juggernaut that accounted for 44% of the company’s revenue in the first quarter. “If our clinical success continues, I think you’re gonna see us with a more diversified set of growth drivers over time than frankly we’ve had in many years, if ever,” Davis said. “I see it as more of a hill than a cliff.” When asked to estimate Winrevair’s sales this year, Davis reiterated that the company does not provide guidance for its individual products. He did declare that the launch is off to a strong start, with prescriptions increasing along with repeat prescriptions. Shipments to patients’ homes is underway. And the company is seeing excellent access with “no real limits,” Davis said, which is a good sign considering the drug was approved less than a month ago, he added. R&D chief Dean Li, M.D., Ph.D., said that there will be continued “data flows that will continue to inform and strengthen,” Winrevair’s profile. The company also is working on an auto-injector that should improve uptake for the drug, which is currently provided in a vial. “We believe that the vast majority with time will use it as self-administration,” Li said. “This is a patient population that’s quite used to doing injections.”   Merck’s revenue for the quarter came in at $15.8 billion, which topped the analyst consensus of $15.2 billion. It was a 9% increase from the $14.5 billion figure from the first quarter of 2023 and an 8% increase sequentially. With the performance, Merck made a slight adjustment to its annual revenue projection to a range of $63.1 billion to $64.3 billion, up from $62.7 billion to $64.2 billion. The midpoint of the new estimate would provide a 6% revenue increase over 2023 sales of $60.1 billion. Keytruda did much of the heavy lifting in the first quarter, generating sales of $6.9 billion, which was up 20% from the first quarter of 2023 and 5% sequentially. Of the $1.29 billion increase in Merck’s revenue year over year, Keytruda accounted for $1.15 billion of the uptick. Helping fuel recent Keytruda sales have been five approvals over the last seven months, moving the PD-1 immunotherapy into earlier use for patients with kidney, breast and non-small cell lung cancers, Merck said. HPV vaccine Gardasil had a 14% year-over-year increase and a 20% sequential bump in sales to $2.2 billion in the quarter, helping compensate for a 24% drop in sales from diabetes drug Januvia to $670 million.

Merck & Co. reported better-than-expected first-quarter results on Thursday, fueled by strong sales of its blockbuster cancer drug Keytruda that prompted the pharma to raise its profit and revenue forecasts for 2024.The cancer immunotherapy saw sales surge 20% year-over-year to $6.9 billion in the first quarter, topping analyst estimates of $6.7 billion. Edward Jones analyst John Boylan called Keytruda the "star" of Merck's report, adding, "we expect that to continue due to growing acceptance of the drug and good clinical data."Merck's total sales for the three-month period were $15.8 billion, which is up 9% from 2023. Net income came in at $4.8 billion, an increase of 69% compared to the same time last year.However, with more than 40% of Merck's sales now reliant on Keytruda, the company is facing a revenue crunch once the drug's main US patent expires in 2028.Preparing for post-KeytrudaStill, analysts are becoming more confident that the company will be able to offset Keytruda’s loss of exclusivity with sales from newer products, such as its pulmonary arterial hypertension (PAH) drug Winrevair, which scored a highly-anticipated US approval last month, as well as a 21-valent pneumococcal vaccine, dubbed V116, that may be cleared by the FDA in June for use in adults."Merck has a solid pipeline of other new products and has an impressive management team," Boylan said.During an earnings call Thursday, CEO Rob Davis wouldn't provide specific sales guidance for Winrevair, but said Merck is seeing "an increasing number of prescriptions being written [as well as] repeat prescriptions…and from a payer perspective we're seeing good access," with several having already established coverage policies."Our confidence in a successful launch has not changed. We continue to see this consistent with our expectations," he said. Analysts estimate Winrevair will generate $572 million this year, growing to $1.3 billion the next, and up to $2.1 billion in 2026.Sales, profit outlook liftedBeyond Keytruda, Merck's HPV vaccine Gardasil also delivered solid growth, with sales rising 14% to $2.3 billion, largely in line with consensus. The company noted particularly strong demand for the vaccine in China, where it is seeking approval for use in men. Sales of pneumococcal vaccine Vaxneuvance more than doubled to $219 million in the first quarter.However, Merck's diabetes franchise continued its downward slide, with sales of Januvia falling 24% to $670 million, missing expectations of $687 million. It is one of the 10 drugs targeted in ongoing Medicare drug price negotiations, a policy under the Biden administration's Inflation Reduction Act that aims to make some of the more expensive treatments more affordable for seniors.Overall, Merck said pharmaceutical division sales totaled $14 billion during the quarter, a gain of 10% from the same period a year ago.The company also raised and narrowed its financial outlook for the year. It now expects sales in 2024 to be between $63.1 billion and $64.3 billion, up from previous guidance of $62.7 billion to $64.2 billion. Adjusted earnings are now seen ranging from $8.53 to $8.65 per share, versus a prior forecast of $8.44 to $8.59 per share.