Merck reports EPS in-line, misses on revs; guides FY17 below consensus
- Reports Q4 (Dec) earnings of $0.89 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.89; revenues fell 1.0% year/year to $10.12 bln vs the $10.23 bln Capital IQ Consensus, including a 1 percent negative impact from FX. Sales in the fourth quarter of 2016 reflect the unfavorable impact of ~$150 million of sales in Japan, which occurred in the third quarter of 2016 rather than in the fourth quarter due to the implementation of a resource planning system.
- Q4 pharmaceutical sales decreased 1 percent to $8.9 billion. The decline was driven primarily by the loss of U.S. market exclusivity in 2016 for CUBICIN (daptomycin for injection), an I.V. antibiotic; NASONEX (mometasone furoate monohydrate), an inhaled nasal corticosteroid for the treatment of nasal allergy symptoms; and ZETIA (ezetimibe), a medicine for lowering LDL cholesterol; as well as by the ongoing impact of biosimilar competition in the company's marketing territories in Europe for REMICADE (infliximab), a treatment for inflammatory diseases. In the aggregate, sales of these products declined $564 million during Q4 compared to the fourth quarter of 2015.
- These declines were largely offset by growth in oncology, hepatitis C, diabetes and vaccines, which include the ongoing launches of KEYTRUDA and ZEPATIER (elbasvir and grazoprevir), a medicine for the treatment of chronic hepatitis C virus genotypes 1 or 4 infection. Additionally, the ongoing launch of BRIDION (sugammadex) Injection 100 mg/mL, a medicine for the reversal of neuromuscular blockade induced by rocuronium bromide or vecuronium bromide in adults undergoing surgery, generated sales of $139 million during the fourth quarter of 2016.
- Growth of KEYTRUDA reflects the company's continued efforts to launch the product with new indications, particularly as a first-line treatment for NSCLC and for previously treated recurrent or metastatic head and neck cancer in the United States, and as a second-line treatment for NSCLC globally.
- Januvia/Janumet +4% to $1.5 bln; Zetia/Vytorin 13% to $873 bln; Gardasil +9% to 542 mln; Keytruda +125% to $483 mln
- Co issues downside guidance for FY17, sees EPS of $3.72-3.87, excluding non-recurring items, vs. $3.87 Capital IQ Consensus Estimate; sees FY17 revs of $38.6-40.1 bln vs. $40.19 bln Capital IQ Consensus Estimate.