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Here's Why Merck (MRK) Stock is Up Since Q2 Earnings Release
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Merck & Co., Inc. (MRK - Free Report) stock has risen 4.2% since the company announced second-quarter earnings on Jul 27.
Merck’s second-quarter results were impressive as the company beat estimates for both earnings as well as sales. Earnings of $1.06 per share rose 5% year over year. Revenues for the quarter rose 5% year over year to $10.47 billion
Strength in Keytruda, Bridion, Gardasil and Animal Health offset headwinds from loss of exclusivity for some products and competitive pressure for Zostavax and Zepatier. All eyes were on the performance of Keytruda, which is being touted as a key long-term growth driver for Merck. The drug continued its robust performance on strong demand trends.
Though Merck tightened it sales guidance for 2018, it was only due to less favorable currency impact owing to a strengthening dollar. Despite currency headwind expectations, it raised its earnings guidance for the full year.
So far this year, Merck’s shares have outperformed the industry, rising 18.5% compared with a 2.5% increase for the industry.
A significant part of Merck’s outperformance this year was driven by strong performance and positive regulatory updates related to its PD-1 inhibitor, Keytruda. In a very short span of time, Keytruda has become Merck’s largest product. It is already approved for use in 12 indications across eight different tumor types in the United States.
In June, Keytruda gained FDA approval for two new indications. These include third-line treatment of adult as well as pediatric patients with primary mediastinal B-cell lymphoma (PMBCL), a type of non-Hodgkin lymphoma and second-line treatment of recurrent or metastatic cervical cancer. In July, Keytruda was approved in China for metastatic melanoma, following failure of one prior line of therapy. This makes Keytruda the only PD-L1 inhibitor approved in China for advanced melanoma. These label expansion approvals should drive sales of Keytruda in the future quarters.
The treatment generated sales of $$1.67 billion in second-quarter 2018, up 13.8% sequentially and 89% year over year. Sales were driven by the launch of new indications globally. Keytruda sales are gaining particularly from strong momentum in the first-line lung cancer indication as it is the only anti-PD-1 approved in first-line setting.
In fact, the Keytruda development program is also progressing well and is being studied for more than 30 types of cancer in more than 800 studies, including more than 400 combination studies. Merck is collaborating with several companies including Amgen (AMGN - Free Report) , Incyte (INCY - Free Report) , Glaxo and Pfizer separately for the evaluation of Keytruda in combination with other regimens.
Several regulatory decisions for new indications in the United States as well as in Europe are pending in the second half of 2018 and 2019, which if approved can further boost sales. A key decision in October will be on the label expansion of Keytruda as a first-line treatment for metastatic squamous non-small cell lung cancer (NSCLC), which is a difficult-to-treat lung cancer patient population, based on data from the phase 3 KEYNOTE-407 study.
In fact, at the June annual meeting of the American Society of Clinical Oncology, impressive overall survival data from the KEYNOTE-407 study stole the limelight. The data was termed “practice changing” by CNBC – changing the way doctors look at prescribing these drugs to cancer patients.
Other than that, this year Merck and partner AstraZeneca (AZN - Free Report) gained approval in Europe and Japan for its PARP inhibitor Lynparza for advanced ovarian cancer and in the United States in metastatic breast cancer. Merck also announced positive data from several late-stage studies, mainly evaluating Keytruda for further line extensions. Merck also signed a deal with Japan’s Eisai Co., Ltd to jointly develop and commercialize the latter’s tyrosine kinase inhibitor, Lenvima, both as a monotherapy as well as in combination with Keytruda, for several types of cancer.It also agreed to buy Viralytics Limited, an Australian pharmaceutical company that develops oncolytic immunotherapies for a range of cancers, which should strengthen its oncology portfolio.
Conclusion
Merck, which carries a Zacks Rank #3 (Hold), has its share of challenges. It faces generic competition for several drugs, and pricing pressure and rising competitive pressure for the diabetes franchise and for products like Isentress (HIV), Zepatier (HCV) and Zostavax (vaccine)
Nonetheless, going forward, new products like Keytruda, Lynparza, and Bridion should continue to contribute meaningfully to the top line. Merck’s Animal Health unit is also strong and remains a core growth driver for the company. Meanwhile, Merck will also continue to focus on cost-cutting initiatives, which should drive its bottom line.
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Here's Why Merck (MRK) Stock is Up Since Q2 Earnings Release
Merck & Co., Inc. (MRK - Free Report) stock has risen 4.2% since the company announced second-quarter earnings on Jul 27.
Merck’s second-quarter results were impressive as the company beat estimates for both earnings as well as sales. Earnings of $1.06 per share rose 5% year over year. Revenues for the quarter rose 5% year over year to $10.47 billion
Strength in Keytruda, Bridion, Gardasil and Animal Health offset headwinds from loss of exclusivity for some products and competitive pressure for Zostavax and Zepatier. All eyes were on the performance of Keytruda, which is being touted as a key long-term growth driver for Merck. The drug continued its robust performance on strong demand trends.
Though Merck tightened it sales guidance for 2018, it was only due to less favorable currency impact owing to a strengthening dollar. Despite currency headwind expectations, it raised its earnings guidance for the full year.
So far this year, Merck’s shares have outperformed the industry, rising 18.5% compared with a 2.5% increase for the industry.
A significant part of Merck’s outperformance this year was driven by strong performance and positive regulatory updates related to its PD-1 inhibitor, Keytruda. In a very short span of time, Keytruda has become Merck’s largest product. It is already approved for use in 12 indications across eight different tumor types in the United States.
In June, Keytruda gained FDA approval for two new indications. These include third-line treatment of adult as well as pediatric patients with primary mediastinal B-cell lymphoma (PMBCL), a type of non-Hodgkin lymphoma and second-line treatment of recurrent or metastatic cervical cancer. In July, Keytruda was approved in China for metastatic melanoma, following failure of one prior line of therapy. This makes Keytruda the only PD-L1 inhibitor approved in China for advanced melanoma. These label expansion approvals should drive sales of Keytruda in the future quarters.
The treatment generated sales of $$1.67 billion in second-quarter 2018, up 13.8% sequentially and 89% year over year. Sales were driven by the launch of new indications globally. Keytruda sales are gaining particularly from strong momentum in the first-line lung cancer indication as it is the only anti-PD-1 approved in first-line setting.
In fact, the Keytruda development program is also progressing well and is being studied for more than 30 types of cancer in more than 800 studies, including more than 400 combination studies. Merck is collaborating with several companies including Amgen (AMGN - Free Report) , Incyte (INCY - Free Report) , Glaxo and Pfizer separately for the evaluation of Keytruda in combination with other regimens.
Several regulatory decisions for new indications in the United States as well as in Europe are pending in the second half of 2018 and 2019, which if approved can further boost sales. A key decision in October will be on the label expansion of Keytruda as a first-line treatment for metastatic squamous non-small cell lung cancer (NSCLC), which is a difficult-to-treat lung cancer patient population, based on data from the phase 3 KEYNOTE-407 study.
In fact, at the June annual meeting of the American Society of Clinical Oncology, impressive overall survival data from the KEYNOTE-407 study stole the limelight. The data was termed “practice changing” by CNBC – changing the way doctors look at prescribing these drugs to cancer patients.
Other than that, this year Merck and partner AstraZeneca (AZN - Free Report) gained approval in Europe and Japan for its PARP inhibitor Lynparza for advanced ovarian cancer and in the United States in metastatic breast cancer. Merck also announced positive data from several late-stage studies, mainly evaluating Keytruda for further line extensions. Merck also signed a deal with Japan’s Eisai Co., Ltd to jointly develop and commercialize the latter’s tyrosine kinase inhibitor, Lenvima, both as a monotherapy as well as in combination with Keytruda, for several types of cancer.It also agreed to buy Viralytics Limited, an Australian pharmaceutical company that develops oncolytic immunotherapies for a range of cancers, which should strengthen its oncology portfolio.
Conclusion
Merck, which carries a Zacks Rank #3 (Hold), has its share of challenges. It faces generic competition for several drugs, and pricing pressure and rising competitive pressure for the diabetes franchise and for products like Isentress (HIV), Zepatier (HCV) and Zostavax (vaccine)
Nonetheless, going forward, new products like Keytruda, Lynparza, and Bridion should continue to contribute meaningfully to the top line. Merck’s Animal Health unit is also strong and remains a core growth driver for the company. Meanwhile, Merck will also continue to focus on cost-cutting initiatives, which should drive its bottom line.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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