As had been foreshadowed, a drop-off in routine doctor appointments during lockdown put a dent in Merck’s (US:MRK) second-quarter numbers. A $1.5bn (£1.1bn) hit to the group’s pharma business and a $100m blow to its animal health division took overall revenues down by 8 per cent to $10.9bn. Still, this result was better than expected; consensus estimates were for a decline of 12 per cent.
Moreover, Merck believes that the brunt of the Covid-19 damage is now behind it. Management anticipates a “return to normal operating levels” in Q4. It follows that the group has narrowed and raised its full-year revenue guidance range from $46.1bn-48.1bn to $47.2bn-48.7bn, with earnings-per-share (EPS) of $5.63-5.78.
In a story presaged days earlier by British peer GlaxoSmithKline (GSK), Merck’s vaccine sales suffered as Covid-19 took hold. Indeed, amid widespread ‘stay at home’ orders, fewer people received the likes of the ‘Gardasil’ injection to protect against human papillomavirus (HPV) – meaning that revenues for this product slid by 29 per cent to $656m. Likewise, children’s inoculations for diseases such as measles, mumps and rubella fell by 44 per cent to $378m.
However, helping to mitigate some of the impact of those contractions, Merck’s blockbuster immuno-oncology drug ‘Keytruda’ did not reveal any signs of waning momentum. Revenues here marched forward by 29 per cent to $3.4bn. The group also advanced its pipeline for Keytruda, announcing four new US approvals, a China approval and two US filing acceptances.
Akin to several of its big pharma peers across the globe, Merck is also battling it out against the new coronavirus on multiple fronts. In collaboration with non-profit organisation IAVI, it is working on a vaccine candidate called ‘V590’ which is currently in preclinical development. It also acquired Themis – which specialises in vaccines and immune-modulation therapies – earlier this year, in order to develop another potential vaccine. Human studies are due to start in the third quarter of 2020. At the same time, Merck has united with Ridgeback bio to develop an oral antiviral therapy to treat the symptoms of Covid-19.
Merck’s latest figures landed a day after those of American biotech firm Gilead (US:GILD). Gilead has captured worldwide attention in recent months for its approved antiviral coronavirus treatment ‘Remdesivir’. But the group endured a 10.5 per cent dip in Q2 sales, partly due to lower demand for chronic hepatitis C virus (HCV) products – a trend which led to fewer healthcare professional visits and screenings.
Analysts had expected Gilead to endure a 7.2 per cent second-quarter revenue decline – and the group’s quarterly adjusted EPS missed consensus projections by 23 per cent. Still, it has lifted its full-year sales guidance range from $21.8bn-22.2bn to $23-25bn.
