Merck’s Global Human Health Segment Performance



Global human health segment

Merck & Co.’s (MRK) global human health segment contributed over 90% of the total revenue. There are ten blockbuster drugs with a yearly contribution of over $1 billion each. These drugs include Januvia, Janumet, Zetia, Remicade, Vytorin, Vytorin, Isentress, Gardasil, Singulair, Proquad/Varivox, and Nasonex.

Apart from these, Merck is optimistic about how its recently launched products and its late-stage pipeline will perform in the coming years. The European Commission approved Keytruda for the treatment of advanced melanoma in July 2015. Now, the company is focused on launching Keytruda in the EU (European Union) markets. Also, the FDA (U.S. Food and Drug Administration) accepted sBLA for Keytruda in the treatment of advanced non-small cell lung cancer in June 2015. The HCV (Hepatitis C virus) doublet is under priority review with the FDA. It’s under assessment for the EU markets. It’s expected to launch in 2016.

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Diabetes franchise—Januvia and Janumet   

Januvia and Janumet are used to lower blood sugar levels in patients with type 2 diabetes. The combined sales for these drugs were $1.6 billion during 2Q15. This was an ~9% rise at constant currencies over the previous year. Januvia sales rose by ~14% in the US markets. It rose ~4% at constant currencies in international markets due to volume growth in the US, Europe, and emerging markets.

Onglyza is a drug that’s made by Bristol-Myers Squibb (BMY) and AstraZeneca (AZN). Along with Galvus from Novartis (NVS), Onglyza competes with Merck’s diabetes products. Recently, Januvia was confirmed for a high safety profile and no risk of major adverse cardiovascular events or hospitalization for heart failure by the American Diabetes Association. There were a few concerns with the safety profile for Onglyza, according to the FDA’s report.

Cardiovascular franchise—Zetia and Vytorin

Zetia and Vytorin are used to lower the LDL cholesterol levels in the blood. The combined revenue for these drugs fell by 8% at constant currencies. Zetia sales were flat in the US while the Vytorin sales fell. Worldwide sales were affected due to the loss of exclusivity of Vytorin in the US and Zetia in Canada.

Zetia’s competitors include Niaspan from AbbVie (ABBV) and Lipitor from Pfizer (PFE).

We’ll discuss the performance of other franchise including immunology and vaccines in the next part of this series. Investors can consider ETFs like the Health Care Select Sector SPDR ETF (XLV). It holds 5.70% of its total investments in Merck.


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