A nurse holds a one-dose bottle and a prepared syringe of the measles, mumps, and rubella virus vaccine made by Merck at the Utah County Health Department on April 29, 2019 in Provo, Utah.
George Frey | fake pictures
Pharmaceutical giant Merck beat Wall Street expectations in the second quarter on Friday and raised its overall earnings guidance for the year, saying the worst of the coronavirus pandemic is behind it.
The company, which is struggling to develop two vaccines as well as a treatment to fight Covid-19, told investors that “most of the negative impact” reached its earnings during the quarter. A gradual recovery is expected during the third quarter “with a return to normal operating levels in the fourth quarter.”
The company’s shares rose nearly 3% in premarket trading. The Covid-19 pandemic cost Merck $ 1.6 billion in lost revenue during the quarter, as fewer people visited doctors’ offices. The company estimated the pandemic’s impact on total revenue at $ 1.95 billion by 2020, slightly less than previous projections.
Sales of its successful cancer drug Keytruda helped offset an 8% decrease in revenue to $ 10.87 billion during the three months ended June 30 from $ 11.76 billion the year before.
The New Jersey-based company previously warned that the coronavirus would hit sales in 2020, as the pandemic prevented people from coming to doctor’s offices in the second quarter. Two-thirds of the company’s products, including Keytruda, are administered by doctors, chief financial officer Robert Davis said during the company’s first-quarter conference call.
Keytruda sales increased 29% to $ 3.9 billion from $ 2.36 billion the year before.
This is how the company performed against what Wall Street expected, according to the average analyst estimates compiled by Refinitiv.
- Adjusted EPS: $ 1.37 versus $ 1.04 expected.
- Revenue: $ 10.87 billion versus $ 10.39 billion expected.
Merck said it now expects adjusted full-year earnings of $ 5.63 to $ 5.78 per share, compared to its previous forecast of $ 5.17 to $ 5.37 per share. Net income attributable to shareholders increased to $ 3 billion, or $ 1.18 per share, in the quarter from $ 2.67 billion, or $ 1.03 per share, a year earlier.
Merck is among several companies working to develop Covid-19 vaccines and therapies, though the company launched into the race later than many others, including pharmaceutical giants Pfizer, Johnson & Johnson, and Moderna.
Merck acquired Austrian vaccine maker Themis Bioscience, which is developing a Covid-19 vaccine with the Pasteur Institute and the University of Pittsburgh. The company said Friday that clinical trials for the candidate are scheduled to begin in the third quarter.
It is also collaborating with IAVI nonprofit scientific research on a separate Covid vaccine. The company also announced a collaboration with Ridgeback Biotherapeutics to develop oral antiviral therapy against Covid. Merck said Friday that clinical trials for this candidate vaccine will begin later this year.
Julie Gerberding, Merck’s chief patient officer, told Congress on July 21 that the company would not sell its vaccines at cost if regulators approved it, although she added that the company was “very far from understanding the cost.” Merck has yet to begin human trials for its vaccine candidates, far behind some competitors such as Moderna and Pfizer, which began their late-stage human trials on Monday.
Merck executives will detail the results at 8 am ET on Friday.