The benefits of being the first pharmaceutical company to launch a novel drug have been demonstrated by Merck (US: MRK). The group’s cancer drug Keytruda – which has so far been approved for the treatment of lung, melanoma, head and neck, Hodgkin's lymphoma and bladder cancer – recorded $881m (£667m) of sales in the second quarter of the group’s financial year, up from $584m in the first quarter and a whopping 180 per cent increase on the comparable period last year.
Keytruda sales have helped to offset the fall in revenue from some of the group’s former top selling drugs – such as diabetes treatment Januvia and rheumatoid arthritis medicine Remicade – which have recently lost their patent protection. Overall, revenue rose just 2 per cent to $9.9bn in the second quarter on a constant-currency basis. But margin improvements thanks to the greater prominence of Keytruda helped send like-for-like EPS up 12 per cent to 101ȼ.
This strong first-half performance has been somewhat marred by the recent cyber attack that infiltrated many of Merck’s operating divisions. The costs associated with the attack are likely to peak in the second half, meaning management has been unable to increase its full-year expectations.