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Amgen or Merck: Which Will See the Most Revenue Growth?

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Revenue guidance for fiscal 2019

In its fourth-quarter conference call, Amgen (AMGN) guided for fiscal 2019 revenue of $21.8 billion–$22.9 billion, driven by robust growth anticipated for recently launched Aimovig, Repatha, and biosimilars, and the company’s international marketing strategy. In the guidance, the company considered the increasing competition for some of its products.

Amgen expects its net selling prices’ decline to expand from 1% in 2018 to a mid-single-digit percentage this year. The company expects other income of ~$1.1 billion associated with nonrecurring milestone payments.

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In its fourth-quarter conference call, Merck (MRK) reported that it expects its revenue to rise 2%–6% YoY in fiscal 2019 to $43.2 billion–$44.7 billion, assuming “an approximately 1 percentage point negative impact on foreign exchange, using mid-January rates.” The company expects Keytruda, Lynparza, and Lenvima in the oncology segment, Gardasil in the vaccines segment, Bridion in the hospital and specialty segment, and the animal health segment overall to drive revenue growth in fiscal 2019.

Wall Street’s projections

Analysts expect Amgen to report revenue of $22.83 billion, $22.90 billion, and $23.07 billion in fiscal 2019, fiscal 2020, and fiscal 2021, respectively, implying YoY changes of -3.87%, 0.32%, and 0.73%.

They expect Merck’s revenue to be $44.63 billion, $47.06 billion, and $49.22 billion in fiscal 2019, fiscal 2020, and fiscal 2021, respectively, implying YoY changes of 5.52%, 5.45%, and 4.59%. Merck is expected to report higher revenue and revenue growth than Amgen. Next, we’ll discuss Amgen’s and Merck’s fiscal 2019 EPS.

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