Merck Gets Q1 Beat as Sales of Cancer Blockbuster Keytruda Jump 20%

Merck HQ/iStock, JHVEPhoto

Pictured: Merck headquarters in Kenilworth, NJ/iStock, JHVEPhoto

Merck exceeded Wall Street expectations with 9% sales growth in the first quarter of 2024 on the strength of its oncology and vaccine products, the company announced in an earnings report Thursday. 

With $14 billion reported for pharmaceutical sales in Q1, Merck’s blockbuster cancer treatment Keytruda remains its biggest earner, raking in $6.9 billion in the quarter. That’s a 20% sales increase compared to the same period in 2023 and higher than analyst expectations of $6.71 billion, according to estimates from FactSet. 

The immunotherapy has been approved in earlier-stage indications for non-small cell lung cancer, breast and renal cancers, driving the uptake in demand. It’s expected to top $30 billion in annual sales by 2026 before falling off the patent cliff as biosimilars hit the market as soon as 2028. 

Gardasil, Merck’s HPV vaccine, posted 14% growth in Q1 compared to the prior year period with $2.25 billion in sales due to strong demand, particularly in China. The company’s Vaxneuvance vaccine for pneumococcal disease in infants through adults saw major growth in the quarter as its pediatric indication grew in popularity. The shot brought in $219 million, up 106% from the prior year period.  

However, it wasn’t all good news for Merck in Q1. Diabetes drug Januvia posted a 24% decline in sales, dropping to $670 million for the quarter. The company pointed to falling demand and generic competition. The drug is one of 10 medications from other large pharma companies currently targeted by Medicare in its ongoing price negotiations under the Inflation Reduction Act.  

Merck’s latest approval, Winrevair, is now being launched for pulmonary arteria hypertension. The pharma is charging $14,000 a vial for the subcutaneous shot given every three weeks, putting its annual cost at $238,000. Analysts have projected peak sales from anywhere between $2 billion and $4 billion. The drug is a primary focus for Merck, who dropped $11 billion on an acquisition deal with Acceleron to scoop up the asset in 2021. 

Revenue for the quarter was $15.78 billion, exceeding the $15.2 billion consensus analyst estimate. Merck also raised and narrowed its sales outlook for the year to a range of $63.1 billion to $64.3 billion, a slight uptick from its prior forecast of $62.7 billion to $64.2 billion. The forecast is in line with analysts' projections. 

Prepping for the loss of Keytruda’s exclusivity, Merck announced a restructuring program for 2024 in its fourth-quarter 2023 earnings posted in February. The program is intended to improve manufacturing for both its pharma and animal health businesses. 

Kate Goodwin is a freelance life science writer based in Des Moines, Iowa. She can be reached at kate.goodwin@biospace.com and on LinkedIn

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