Merck’s Heavyweight Cancer Drug Delivered Another Beat And Raise

Merck‘s (MRK) blockbuster cancer drug, Keytruda, continued to pull its weight in the third quarter, helping deliver a beat-and-raise report. Merck stock posted a moderate gain.

X

During the September quarter, Merck earned an adjusted $2.13 per share on $15.96 billion in sales. Sales popped 7% and topped expectations for $15.3 billion, according to FactSet. Earnings jumped 15% and were easily north of forecasts for $1.85.

Keytruda accounted for roughly 40% of the company’s sales and continues to be Merck’s biggest single product. Revenue from the cancer drug ran up 17% to $6.34 billion, besting projections for $6.2 billion.

On the stock market today, Merck stock rose 1.9%, closing at 105.55. Shares have fallen off somewhat after peaking in May. Today, Merck stock has a Relative Strength Rating of 66, putting it in the top third of all stocks when it comes to 12-month performance, according to IBD Digital.

Covid Benefit Continues For Merck Stock

The best performances in the quarter came from Merck’s Lagevrio and Lenvima. The former is a Covid pill developed in partnership with Ridgeback Biotherapeutics. Lagevrio sales surged 47% to $640 million. Lenvima, a cancer drug, brought in $260 million, up 29%.

But Merck doesn’t expect Lagevrio to be a long-term sales contributor. Excluding that drug, sales rose a modest 6%.

Notably, revenue from human papillomavirus vaccine Gardasil climbed 13% to $2.59 billion. However, sales of diabetes medicine Januvia slumped 26% to $835 million.

For the year, Merck guided to $59.7 billion to $60.2 billion in sales. That’s up from Merck’s guidance for $58.6 billion to $59.6 billion issued three months ago. Merck stock analysts expected a lower $59.3 billion in sales.

The company expects earnings per share of $1.33 to $1.38. That’s well below earnings forecasts for $3.03, but now includes a negative impact from an agreement with Daiichi Sankyo to co-develop a new cancer treatment.

Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.

YOU MAY ALSO LIKE:

Thermo Fisher, The Biggest Name In Medical Equipment, Just Made A ‘Drastic’ Guidance Cut — Again

Alkermes Plummets In Huge Volume. Why One Analyst Says The Reaction Is Overdone.

Watch IBD’s Investing Strategies Show For Actionable Market Insights

Looking For The Next Big Stock Market Winners? Start With These 3 Steps

IBD Stock Of The Day: See How To Find, Track And Buy The Best Stocks