Monday, October 27, 2014

Merck Q3 2014 Non-GAAP EPS "Beat" By $0.02 -- Revenue More Than A Little Shy

First the less-than-entirely rosey news: Merck is reducing its full year 2014 guidance range -- on worldwide sales. That is a down bubble, even with help from a bit of a currency tailwind in Q3 2014.

However, in the near term, at 2014 third quarter end, Merck is slightly "ahead" -- at the EPS line. [Because that beat is on a non-GAAP EPS measure, though -- it is more "controllable" (by Merck) than straight GAAP EPS.] Even so, all in all, not a bad quarter. The continued erosion in sales though is something to keep close tabs on. Strong Remicade and Simponi growth continued the trend established in Q2 2014. That's a bright spot, for certain. Here's the release, and some detail, by principal product lines:

. . . .Combined sales of JANUVIA and JANUMET, medicines that help lower blood sugar levels in adults with type 2 diabetes, grew 5 percent to $1.4 billion in the third quarter. The growth reflects higher sales in the United States and Europe, which were partially offset by price reductions in Japan.

Combined sales of ZETIA (ezetimibe) and VYTORIN (ezetimibe/simvastatin), medicines for lowering LDL cholesterol, declined 3 percent to $1.0 billion in the third quarter, driven by lower sales in the United States. [Ed. Note: 20 days to IMPROVE-IT read-out? We shall see (check countdown clock at left).]

Combined sales of REMICADE and SIMPONI, treatments for inflammatory diseases, grew 11 percent to $774 million in the third quarter, including a 2 percent positive impact from foreign exchange. Over the last 12 months, SIMPONI has been the fastest growing anti-TNF agent in all countries where marketed by Merck.

Merck’s sales of GARDASIL, a vaccine to help prevent certain diseases caused by four types of human papillomavirus, were $590 million, a decrease of 11 percent for the third quarter. The results reflect lower purchases in the U.S. public sector.

Worldwide sales of ISENTRESS, an HIV integrase inhibitor for use in combination with other antiretroviral agents for the treatment of HIV-1 infection, decreased 3 percent to $412 million in the third quarter. The decline reflects lower sales in the United States, partially offset by growth in Europe. . . .

Separately, Merck announced that Keytruda has received "breakthrough" designation at the US FDA, in hard to treat lung cancers. That is good news. In addition, we've learned that approximately 900 patients are receiving the immuno-biologic, for advanced melanoma (under the earlier US FDA approval for treating that cancer). It should be noted that there are side effects associated with the regimen (although generally fewer, and less severe, than seen with radiation or chemo treatments).

If anything surprising transpires on the actual call and webcast, we will update this post. Onward!

1 comment:

Anonymous said...

Many of the 900 US Keytruda patients originally received the drug under the auspices of Merck's Early Access Program.