Merck profit beat clouded by NotPetya attack, shares dip
(Reuters) – Merck & Co (MRK.N) reported profit ahead of Street estimates on strong sales of its cancer drug Keytruda but total revenue fell in the quarter from disruptions due to the NotPetya cyber attack and loss of market share for many of its older drugs.
Sales of Keytruda more than doubled to $1.05 billion in the third quarter, but were not enough to boost Merck’s total revenue, which fell about 2 percent to $10.33 billion.
Merck’s shares were trading down 2.4 percent at $60.50 before the bell on Friday.
Total sales were also hurt as Merck borrowed Gardasil vaccine from the U.S. Centers for Disease Control and Prevention post the NotPetya cyber attack in the second quarter.
“The sales reflect a loss of market exclusivity for several products,” Guggenheim Securities analyst Tony Butler said in a client note.
Rheumatoid arthritis drug Remicade’s sales fell 39 percent in the second quarter and 34 percent in the first quarter on a year-over-year basis.
Sales of Zetia, Merck’s cholesterol therapy, declined 45 percent in the second quarter and 35 percent in the first quarter.
Merck on Friday also narrowed and raised its full-year adjusted earnings per share forecast to $3.91-$3.97 from $3.76-$3.88.
Net loss attributable to the drugmaker was $56 million, or 2 cents per share, in the third quarter, compared with a year-ago profit of $2.18 billion, or 78 cents per share.
Merck had a $2.35 billion charge related to its collaboration with AstraZeneca Plc (AZN.L) for cancer drug Lynpraza, which it had announced in July.
Excluding items, the company earned $1.11 per share, beating analysts’ average estimate of $1.03, according to Thomson Reuters I/B/E/S.
Analysts had expected total revenue of $10.54 billion.
(This story corrects fourth paragraph to say Merck borrowed Gardasil vaccine from U.S. CDC, not the other way around.)
Reporting by Manas Mishra in Bengaluru; Editing by Martina D’Couto