© Reuters. FILE PHOTO: The logo for 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 on strong sales of its cancer immunotherapy Keytruda, now the world’s biggest selling prescription medicine.
Keytruda sales jumped 21% to $6.6 billion as the company was able to increase use of the drug in earlier stage cancers, topping analyst forecast of $6.5 billion.
For the full year, the cancer drug generated $25 billion, surpassing peak sales of AbbVie (NYSE:)’s blockbuster arthritis drug Humira.
Keytruda is, however, set to lose its patent exclusivity by the end of the decade, and to offset the impact Merck has signed multiple deals over the last year, including a $5.5 billion payout to Japan’s Daiichi Sankyo for the right to co-develop three cancer drugs.
Merck raised its forecast for adjusted annual sales for new oncology products in its development pipeline to more than $20 billion from over $10 billion by mid-2030s.
It also lifted its mid-2030s outlook for cardiometabolic products to about $15 billion from more than $10 billion.
Merck reported adjusted earnings of 3 cents a share in the fourth quarter, despite taking a charge of $1.69 a share to account for the Daiichi deal. Analysts had expected a loss of 11 cents a share, according to LSEG data.
Revenue for the quarter rose 6% to $14.6 billion, compared with estimates of $14.5 billion.
Merck’s shares were up nearly 2% in premarket trading.
The drugmaker 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 about $4 billion in cumulative pre-tax costs to implement the program. It took a $190 million charge related to the program in the fourth quarter.
The company forecast 2024 sales between $62.7 billion and $64.2 billion. Analysts, on average, are estimating 2024 sales of $63.5 billion.
The New Jersey-based drugmaker expects 2024 earnings of $8.44 to $8.59 per share, above Wall Street estimates of $8.42.