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How Are Merck’s Revenues Trending in 2019?

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Revenue guidance and projections

On its first-quarter earnings conference call, Merck & Co. (MRK) guided for 2019 revenue of $43.9 billion–$45.1 billion, a YoY (year-over-year) rise of 4%–7% driven by its Oncology, Hospital and Specialty, Vaccines, and Animal Health segments.

Analysts expect Merck’s revenue to rise 5.78% YoY to $44.74 billion in 2019, 5.80% to $47.33 billion in 2020, and 4.94% to $49.67 billion in 2021. Analysts also expect the company’s revenue to rise 4.55% YoY to $10.94 billion in the second quarter, 5.31% to $11.37 billion in the third quarter, and 5.24% to $11.58 billion in the fourth quarter of 2019.

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Keytruda’s growth trends

Keytruda continues to be a key revenue driver for the company, driven mainly by solid uptake in its first-line non-small cell lung cancer indications both as a monotherapy and in combination with chemotherapy. The drug is approved in 18 indications and for 11 tumor types, including bladder cancer, melanoma, microsatellite instability-high tumors, and head and neck cancer. Besides the US, Keytruda is also reporting robust demand in international markets such as Japan, the European Union, and China.

In the first quarter, Keytruda reported revenue of $2.27 billion, a YoY rise of 55% on a reported basis and 60% on a constant currency basis. The drug accounted for 20.97% of the company’s total sales in the first quarter.

The recent FDA approvals for a Keytruda monotherapy in adjuvant melanoma and first-line head and neck squamous cell carcinoma indications and for a Keytruda-Inlyta combination in first-line advanced renal cell carcinoma indications are expected to boost Keytruda’s revenues in future years.

Vaccine growth trends

In the first quarter, the HPV vaccine Gardasil/Gardasil 9 reported revenue of $838 million, a YoY rise of 27% on a reported basis and 31% on a constant-currency basis. The vaccine accounted for 7.75% of the company’s total sales in the first quarter. The demand for Gardasil continues to be robust in international markets such as the European Union and China.

On May 8, Merck issued a press release announcing the positive results of its Phase 2 trial highlighting the non-inferiority of its 15-valent pneumococcal conjugate vaccine, V114, with an already marketed 13-valent pneumococcal conjugate vaccine, PCV13, for the shared serotypes in infants. V114 also demonstrated an immune response for an additional two serotypes of pneumonia.

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