Januvia, Vaccines May Drive Merck’s Revenue Growth in 2017


Feb. 28 2017, Updated 10:37 a.m. ET

Januvia franchise

In 2016, Merck & Co.’s (MRK) Januvia franchise managed to report revenue of nearly $6.1 billion, a year-over-year (or YoY) rise of ~2%. This growth was mainly due to solid volume trends across the world for the company’s diabetes franchise. Since Merck has to offer significant discounts and rebates to managed care organizations, the margins of its Januvia franchise were negatively affected.

However, the company has managed to maintain a healthy payer coverage, which continues to ensure solid revenue trends for the diabetes franchise in 2017. To know more about growth trends for the Januvia franchise, read Merck Continues to Dominate with Its Januvia Franchise.

If Januvia’s revenue manages to offset Merck’s losses due to impending patent expiries, it could have a positive impact on Merck’s share price along with the share price of the iShares Russell 1000 Value ETF (IWD). Merck makes up ~1.6% of IWD’s total portfolio holdings.

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Vaccines business

Similar to its peers Pfizer (PFE), Sanofi (SNY), and GlaxoSmithKline (GSK), Merck is a major player in the vaccines space. In 2016, pneumovax 23 reported revenue worth $641 million, a YoY rise of ~18%. The rise in demand was mainly driven by the adoption of new vaccination guidelines issued by the Centers for Disease Control and Prevention.

Vaccines, Gardasil, and Gardasil 9 also reported total revenue of ~$2.2 billion in 2016, a YoY rise of ~14%. The demand for these vaccines has been on the rise as patients attempt to prevent cancers caused by the human papillomavirus (or HPV). To know more about Gardasil, read Gardasil Driving Merck & Co.’s Vaccines Business in 4Q16.

In the next article, we’ll analyze Keytruda’s label expansion in greater detail.


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