Merck’s 2Q16 Estimates: Expected Growth Contributors



The growth contributors

As discussed earlier, nearly 90% of total 2Q16 revenue for Merck and Co. (MRK) is expected to come from the Pharmaceutical segment. Major growth is expected from its blockbuster drugs including Januvia, Janumet, the Gardasil vaccine, and new drug Keytruda.

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Januvia and Janumet

Januvia and Janumet are two blockbuster drugs in Merck’s diabetes franchise. These drugs are used to lower blood sugar levels in patients with type 2 diabetes. The combined sales of these drugs is estimated to remain nearly flat at $1.58 billion for 2Q16 as compared to $1.59 billion for 2Q15, including the impact of currencies. The overall contribution of these drugs to total revenue was ~16.3% in 2Q15, which is expected to decrease to ~16.1% in 2Q16.

The competitors for Januvia and its combination version Janumet are Onglyza, jointly made by Bristol-Myers Squibb (BMY) and AstraZeneca (AZN), and Galvus from Novartis (NVS).

Gardasil franchise

The Gardasil franchise is Merck’s leading vaccine franchise. Gardasil is used for prevention of certain strains of human papillomavirus, or HPV, which is sexually transmitted. Gardasil’s revenue is estimated to grow by 6% in 2Q16. The estimated revenue for Gardasil is $451 million for 2Q16, as compared to $427 million in 2Q15. Gardasil 9 accounted for over 70% of total HPV sales in the United States during the last few quarters.

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Keytruda, a prescription medicine classified under Merck’s immuno-oncology franchise, is used to treat non-small cell lung cancer and melanoma, a type of skin cancer. Keytruda was launched by Merck in the fourth quarter of 2014. The global revenue this blockbuster drug in 2Q16 is estimated to be $285 million, which represents growth of more than 100% as compared to $110 million for 2Q15.


Zetia is the blockbuster drug from Merck’s cardiovascular franchise. The drug is used to lower LDL (low-density lipoprotein) cholesterol levels in the blood. Analysts estimate an increase of 2% in 2Q16 revenue for Zetia. The drug Zetia has lost its exclusivity in Canada, and its competitors include Niaspan from AbbVie (ABBV) and Lipitor from Pfizer (PFE).

To diversify exposure to Merck, you can consider the Health Care Select Sector SPDR Fund (XLV), which holds 5.9% of its total assets in Merck.


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