Merck’s Cardiovascular Drugs Franchise Could Witness a Modest Fall in 2017



Zetia’s revenue trends

In 2016, Merck’s (MRK) Zetia reported revenues of ~$2.6 billion, which reflected 1% year-over-year (or YoY) growth. In December 2016, generic versions of Zetia were launched in the US, and the company expects a rapid fall in revenues of Zetia in 2017. In April 2017, marketing exclusivity of Zetia in the US expired, further accelerating the decline in the drug’s revenues.

In 1Q17, Zetia generated revenues of ~$334 million, which reflected a 45% decline on a YoY basis and a 42% decline on a quarter-over-quarter basis. Outside the US, the drug is marketed as Ezetrol. The company still holds marketing exclusivity for Ezetrol in major European markets. This exclusivity is scheduled to expire after April 2018.

Zetia (ezetimibe) inhibits intestinal cholesterol absorption indicated for the reduction of elevated total cholesterol and low-density lipoprotein (or LDL) in patients with hyperlipidemia.

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Vytorin’s revenue trends

Vytorin is a combination drug consisting of ezetimibe and simvastatin. Outside the US, the drug is marketed as Inegy. In 2016, Vytorin generated revenues of ~$1.1 billion, which is an ~9% decline YoY. Merck’s Vytorin market exclusivity in the US expired in April 2017. 

Hence, the company expects a fall in revenues due to generic erosion. However, Inegy still holds market exclusivity in major European markets. This exclusivity is expected to expire after April 2019.

In 1Q17, Vytorin generated revenues of around $241 million, which is an ~13% decline on a YoY basis and a 19% decline on a quarter-over-quarter basis. The company expects a decline in revenues for the overall ezetimibe franchise in 2017.

The chart above represents the revenue curve of Merck’s cardiovascular franchise from 1Q16 to 1Q17.

Liptruzet’s revenue trends

In May 2013, the FDA approved Liptruzet, an ezetimibe and atorvastatin combination drug, for the treatment of patients with elevated LDL levels and having hyperlipidemia. In 1Q17, Liptruzet generated revenues of ~$49 million compared to $23 million in 1Q16. The drug may witness consistent growth in 2017.

Revenue trends for Adempas

Merck developed Adempas in collaboration with Bayer (BAYZF). Adempas is used for the treatment of pulmonary arterial hypertension and is marketed by Merck outside the Americas. Bayer markets the drug in the Americas. In 2016, Merck reported Adempas sales of around $169 million. 

In 1Q17, Adempas reported revenues of ~$84 million compared to $33 million in 1Q16. In 1Q17, the drug also witnessed ~71% growth on a quarter-over-quarter basis.

Merck’s peers in the cardiovascular drugs market include AstraZeneca, Pfizer (PFE), Novartis (NVS), Sanofi (SNY), and Takeda Pharmaceuticals. The Vanguard Health Care ETF (VHT) has ~4.9% of its total portfolio holdings in Merck.


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