©Reuters. FILE PHOTO: The logo of Merck & Co. is displayed on a screen at the New York Stock Exchange (NYSE) in New York City, New York, U.S., November 17, 2021. REUTERS/Andrew Kelly/File Photo
By Michael Erman
(Reuters) -Merck & Co reported better-than-expected fourth-quarter results on Thursday thanks to strong sales of its cancer immunotherapy Keytruda, currently the world’s best-selling prescription drug.
Keytruda sales rose 21% to $6.6 billion as the company was able to increase the drug’s use in early-stage cancers, beating analysts’ forecasts of $6.5 billion.
For the full year, the cancer drug generated $25 billion, surpassing the peak sales of AbbVie’s (NYSE:) blockbuster arthritis drug Humira.
Keytruda, however, is set to lose its patent exclusivity by the end of the decade, and to offset the impact, Merck has signed numerous deals in the past year, including a $5.5 billion payment to Japan’s Daiichi Sankyo for the right to co-develop three anticancer drugs.
Merck raised its forecast for adjusted annual sales for new oncology products in its development pipeline to more than $20 billion from more than $10 billion by the mid-2030s.
It also raised the mid-2030 outlook for cardiometabolic products from more than $10 billion to about $15 billion.
Merck reported adjusted profit of 3 cents per share in the fourth quarter, despite taking a charge of $1.69 per share to account for the Daiichi deal. Analysts had expected a loss of 11 cents per share, according to LSEG data.
Revenue for the quarter rose 6% to $14.6 billion, compared to estimates of $14.5 billion.
Merck shares rose nearly 2% in premarket trading.
The pharmaceutical company also said it has launched a restructuring program to optimize its manufacturing operations related to human and animal health and expects to complete the program by the end of 2031.
Merck expects to record approximately $4 billion in cumulative pre-tax costs to implement the program. The program took a charge of $190 million in the fourth quarter.
The company expects 2024 sales of between $62.7 billion and $64.2 billion. Analysts, on average, estimate 2024 revenue of $63.5 billion.
The New Jersey-based pharmaceutical company expects 2024 earnings of $8.44 to $8.59 per share, above Wall Street estimates of $8.42.