Latest news with #Capvaxive
CNBC
24-04-2025
- Business
- CNBC
Merck lowers profit outlook, partly due to $200 million expected tariff hit
Merck on Thursday lowered its full-year profit guidance, citing $200 million in estimated costs for tariffs and a charge tied to a recent deal. The company now expects its 2025 adjusted earnings to come in between $8.82 and $8.97, down slightly from a previous outlook of 8.88 to $9.03 per share. The company said the expected tariff charge primarily reflects levies between the U.S. and China, and Canada and Mexico to a lesser degree. Merck has built a robust presence in China, which is considered one of the company's most important markets and is home to some of its partners and manufacturing and research and development sites. Merck noted that the new outlook does not account for President Donald Trump's planned tariffs on pharmaceuticals imported into the U.S., which is prompting some drugmakers to bolster their U.S. manufacturing footprints. That includes Merck, which has invested $12 billion in U.S. manufacturing and research and development and expects to put more than $9 billion more into the country by the end of 2028. But the guidance does include a one-time charge of roughly 6 cents per share related to the company's license agreement with Hengrui Pharma, which it announced in March. Merck reiterated its full-year sales forecast of between $64.1 billion and $65.6 billion. Also on Thursday, the drugmaker reported first-quarter revenue and profit that beat expectations, as it said it saw strength in its oncology portfolio and animal health products. Merck also cited "increasingly meaningful" sales contributions from two recently launched drugs. They are Winrevair, which is used to treat a rare, deadly lung condition, and Capvaxive, a vaccine designed to protect adults from a bacteria known as pneumococcus that can cause serious illnesses and lung infection. Sales of those drugs will likely be critical to Merck's efforts to offset losses from its top-selling cancer therapy Keytruda, which will lose exclusivity in 2028. Here's what Merck reported for the first quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG: The company posted net income of $5.08 billion, or $2.01 per share, for the quarter. That compares with a net income of $4.76 billion, or $1.87 per share, during the year-earlier period. Excluding acquisition and restructuring costs, Merck earned $2.22 per share for the first quarter. Merck raked in $15.53 billion in revenue for the quarter, down 2% from the same period a year ago. Merck's pharmaceutical unit, which develops a wide range of drugs, booked $13.64 billion in revenue during the first quarter. That's down 3% from the same period a year ago. Keytruda recorded $7.21 billion in revenue during the quarter, up just 4% from the year-earlier period. That increase was driven by higher uptake of Keytruda for earlier-stage cancers and strong demand for the drug for metastatic cancers, which spread to other parts of the body. Still, sales came under the $7.43 billion that analysts had expected, according to StreetAccount estimates. Notably, Merck continued to see trouble with China sales of Gardasil, a vaccine that prevents cancer from HPV, the most common sexually transmitted infection in the U.S. In February, Merck announced a decision to halt shipments of Gardasil into China beginning that month and going through at least mid-2025. Investors will likely be looking for updates on that effort during the earnings call on Thursday. The Chinese market makes up the majority of the blockbuster shot's international revenue. Merck is hoping that Gardasil's expanded approval for men ages 9 to 26 in China will help boost uptake of the shot. Gardasil raked in $1.33 billion in sales, down 41% from the first quarter of 2024 primarily due to lower demand in China. That's below the $1.45 billion that analysts were expecting, according to StreetAccount estimates. China has retaliated with tariffs of 125% on goods from the U.S. Some experts said China's tariffs on U.S. products could lead to increased prices or limited supply of some popular Western medicines for Chinese patients, Reuters reported. Merck's animal health division, which develops vaccines and medicines for dogs, cats and cattle, posted nearly $1.59 billion in sales, up 5% from the same period a year ago. The company said higher demand for livestock products and sales from Elanco's aqua business, which it acquired last year, drove that growth.
Forbes
23-04-2025
- Business
- Forbes
Will Q1 Earnings Send MRK Stock Lower?
CHONGQING, CHINA - APRIL 20: In this photo illustration, the Merck logo is displayed on a smartphone ... More screen, with the company's green-themed branding visible in the background, on April 20, 2025, in Chongqing, China. (Photo by) Merck is scheduled to release its earnings report on Thursday, April 24, 2025. Historical data suggests that MRK stock often reacts negatively to such announcements. Over the past five years, the stock has recorded a negative one-day return in 65% of cases, with a median decline of -2.4% and a maximum drop of -9.8%. While the actual market reaction will depend on how Merck's results compare to consensus estimates and investor expectations, understanding these historical patterns could offer an edge for event-driven traders. Two potential strategies emerge: first, traders can assess the probability of a negative reaction based on historical odds and position themselves before the earnings release. Second, they can analyze the relationship between immediate and medium-term returns post-announcement and adjust their positions accordingly. Current consensus estimates anticipate earnings per share of $2.14 on revenues of $15.31 billion. This compares to last year's earnings of $2.07 per share on sales of $15.78 billion. While Merck's newer drugs, Winrevair and Capvaxive, are expected to continue gaining market share, sales of Gardasil are projected to decline due to ongoing drops in China. Additionally, increased competition will likely pressure Januvia and Janumet sales. Although Keytruda remains the main growth driver, overall revenues are expected to decline in the first quarter. That said, for upside with lower volatility than a single stock, the Trefis High-Quality portfolio offers an alternative, having outperformed the S&P 500 with returns exceeding 91% since inception. See the earnings reaction history for all stocks Key observations on one-day (1D) post-earnings returns: Additional data for observed 5-day (5D) and 21-day (21D) returns post-earnings are summarized along with statistical details in the table below. MRK 1D, 5D, and 21D Post-Earnings Return A lower-risk approach (assuming the correlation is strong) is to identify the relationship between short-term and medium-term post-earnings returns and trade accordingly. For instance, if the correlation between 1D and 5D returns is highest, a trader could go 'long' for five days when the 1D post-earnings return is positive. Below is the correlation data based on both five-year and three-year histories. Note that '1D_5D' represents the correlation between one-day post-earnings returns and subsequent five-day returns. MRK Correlation Between 1D, 5D and 21D Historical Returns Occasionally, peer performance can influence a stock's post-earnings reaction, and the market may start pricing this in before the announcement. The following historical data compares Merck's one-day post-earnings returns with those of peers that reported immediately before Merck. For fairness, peer returns shown are also one-day (1D) post-earnings returns. MRK Correlation With Peer Earnings Learn more about the Trefis RV strategy, which has outperformed its all-cap stocks benchmark—a blend of the S&P 500, S&P mid-cap, and Russell 2000—to deliver strong returns. And if you prefer an upside with less volatility than a single stock like Merck, consider the High Quality portfolio, which has outperformed the S&P with returns exceeding 91% since inception. Invest with Trefis Market Beating Portfolios | Rules-Based Wealth
