Merck beat expectations for the first quarter and raised its 2023 forecast even as sales plummeted due to its COVID-19 treatment and a strong dollar hurt sales.
Rising sales of the drugmaker’s bestseller, the cancer treatment Keytruda, helped offset those hits, a decline analysts had expected.
Merck said Thursday that sales of its COVID-19 treatment Lagevrio fell 88% in the quarter to $392 million.
Paxlovid from Lagevrio and Pfizer debuted just over a year ago, as the number of COVID-19 cases skyrocketed and patients were eager to try the first pill treatments for the virus. Lagevrio’s sales have since cooled in both the US and the UK.
Merck’s drug adds tiny flaws to the coronavirus’s genetic code to slow down its reproduction. US regulators have said it should be used with caution. In February, a European medical committee recommended rejection of the drug.
Merck still expects sales of about $1 billion from Lagevrio this year.
The drugmaker’s total sales fell 9% in the quarter to $14.49 billion. That beat analyst expectations for $13.79 billion, according to data company FactSet.
Excluding Lagevrio and the impact of foreign exchange, sales were up 18%, Merck said.
A strong US dollar can affect sales for companies that do a lot of international business. They must convert those sales to dollars when they report earnings. The stronger dollar lowers the value of those sales.
Keytruda sales rose 20% to $5.8 billion, and revenue from Gardasil vaccines soared as well.
Overall, Merck’s earnings fell 35% to $2.82 billion, and earnings adjusted for one-time items were $1.40 per share.
Analysts expect earnings of $1.32 per share.
Merck also raised and tightened its forecast for 2023 on Thursday. The company now expects adjusted earnings to be between $6.88 and $7 per share.
FactSet says analysts expect full-year earnings of $6.91 per share.
Merck & Co. Inc. said the forecast does not account for the impact of the approximately $10.8 billion acquisition of Prometheus Biosciences it announced April 16.
The drug maker is trying to add more variety to its product portfolio. Prometheus is developing a potential treatment for inflammatory bowel diseases such as ulcerative colitis and Crohn’s disease.
Shares of Merck of Rahway, New Jersey, rose more than 2% to $116 before markets opened Thursday.
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