By Michael Erman
(Reuters) – Merck & Co on Thursday reported better-than-expected fourth-quarter results on strong sales of its cancer immunotherapy Keytruda, now the world’s biggest selling prescription medicine.
Sales of Keytruda rose 21% to $6.6 billion as the company was able to increase use of the drug in earlier stage cancers, topping analyst forecasts of $6.5 billion. For the full year, Keytruda racked up $25 billion in sales, surpassing sales of AbbVie’s blockbuster arthritis drug Humira at its peak.
Merck reported adjusted earnings of 3 cents a share in the quarter, despite having to reduce its profit by $1.69 a share to account for a $5.5 billion payout to Japan’s Daiichi Sankyo for the right to co-develop three cancer drugs. Analysts, on average, had expected the company to lose 11 cents a share, according to LSEG data.
Revenue for the quarter rose to $14.6 billion from $13.8 billion last year. Analysts, on average, had expected sales of $14.5 billion.
Shares of Merck were up 1.4% in premarket trading.
The drugmaker also said it is launching a restructuring program to optimize its manufacturing operations for human and animal health, and expects to complete them by the end of 2031.
Merck said it will record about $4 billion in cumulative pre-tax costs to implement the program. The company recorded a $190 million charge to its GAAP results in the fourth quarter related to the restructuring.
Merck forecast 2024 sales of between $62.7 and $64.2 billion, suggesting growth of as much as 6.8% year over year. Analysts, on average, are estimating 2024 sales of $63.5 billion.
The New Jersey-based drugmaker expects annual earnings of $8.44 to $8.59 per share, above analyst estimates of $8.42.
Including costs from deals other than the Daiichi transaction and restructuring costs, the company reported a net loss of 48 cents per share for the quarter.
(Reporting by Michael Erman and Leroy Leo; Editing by Bill Berkrot)
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