Merck beat fourth-quarter expectations thanks to more sales of its blockbuster cancer drug Keytruda, but the company’s early view on 2023 underwhelmed Wall Street.
Shares of the drugmaker slid Thursday after Merck released an earnings forecast that fell well short of projections by industry analysts.
In the final quarter of 2022, Keytruda sales grew 19% to $5.45 billion. Overall revenue climbed 2% to $13.83 billion.
Sales of the company’s COVID-19 treatment, Lagevrio, slipped 13% to $825 million. Merck said a strong dollar hurt international sales, which included growth in Japan and the United Kingdom.
Overall, Merck’s net income fell 20% to $3 billion compared to the final quarter of 2021, as research and development costs also jumped.
Adjusted earnings totaled $1.62 per share.
Analysts expected earnings of $1.53 per share on $13.66 billion in revenue for the quarter, according to FactSet.
Keytruda again led Merck in full-year revenue last year by bringing in nearly $21 billion. Lagevrio, which U.S. regulators approved in late 2021, recorded $5.7 billion in sales. Most of that came in the year's first two quarters.
The company expects sales for the COVID-19 treatment to tumble to around $1 billion in 2023.
Merck leaders have cited the evolving pandemic and the amount of inventory still in the marketplace as factors behind the drop.
Merck expects adjusted earnings to range between $6.80 and $6.95 per share in 2023 on revenue of $57.2 billion to $58.7 billion.
Analysts forecast earnings of $7.33 per share on $57.94 billion in sales, according to FactSet.
Shares of Rahway, New Jersey-based Merck & Co. Inc. fell 3%, or $3.41, to $103.57 after markets opened Thursday. The Standard & Poor's 500 index climbed slightly.