Merck tops Q3 forecasts, as health systems adapt to COVID-19

The blockbuster cancer treatment Keytruda and the vaccine Gardasil pushed Merck well past Wall Street’s third-quarter expectations, even as COVID-19 sapped demand for another vaccine.

The drugmaker said Thursday that sales of its pneumonia vaccine, Pneumovax 23, tumbled 26% in the quarter to $277 million mainly because people in the United States prioritized preventive shots guarding against COVID-19 instead.

Pneumovax sales had jumped 58% in last year’s quarter before any coronavirus vaccines were on the market, as people sought to grab whatever protection they could heading into the winter cold and flu season.

Merck failed in its attempt to develop a vaccine to help fight the coronavirus, but it could soon start bringing in revenue from a potential treatment, molnupiravir. The company has asked regulators in both the U.S. and Europe for authorization of what would be the first pill to treat COVID-19.

The U.S. Food and Drug Administration has said a panel of outside experts will meet late next month to consider the treatment.

In the third quarter, Merck saw Keytruda revenue jump 22% to $4.5 billion, while sales of Gardasil vaccines against cancer-causing human papilloma virus infections soared 68% to nearly $2 billion.

Total company sales rose 20% to $13.15 billion, as net income jumped 55% to $4.57 billion.

Adjusted earnings totaled $1.75 per share.

Analysts expected, on average, earnings of $1.55 per share on $12.32 billion in revenue, according to FactSet.

Merck also said Thursday that it raised and tightened its 2021 forecast. It now expects full-year adjusted earnings of between $5.65 and $5.70 per share on $47.4 billion to $47.9 billion in revenue.

Analysts expect earnings of $5.63 per share on about $47.6 billion in revenue.

Merck said global health systems...