Biotech and Pharma

Merck profit rose 10% in the first quarter but coronavirus uncertainty weighs on its outlook

Key Points
  • Merck posted a 10.4% rise in first-quarter profit, helped by strong sales of cancer therapy Keytruda.
  • The drugmaker lowered its 2020 profit forecast due to uncertainty from the COVID-19 pandemic.
  • "The company anticipates reduced demand for its physician-administered products while pandemic-related access measures remain in place," Merck said in a statement.
Youssef Cohen, 68, undergoes cancer treatment with the drug Keytruda
John Moore | Getty Images

Merck beat analysts' estimates for quarterly profit on Tuesday on strong demand for its blockbuster cancer drug, Keytruda, but expects coronavirus-led lockdowns to weigh on the treatment's sales in the next few quarters.

Merck, which lowered its full-year 2020 profit forecast, said roughly 66% of its revenue is made up of drugs that are administered at a doctor's office, including Keytruda, and social distancing measures are hitting their sales.

"The company anticipates reduced demand for its physician-administered products while pandemic-related access measures remain in place," Merck said.

The company also said it was suspending its share buyback program.

Sales of Keytruda jumped 45% in the first quarter to $3.28 billion.

Net income attributable to shareholders rose to $3.22 billion, or $1.26 per share, in the quarter from $2.92 billion, or $1.12 per share, a year earlier.

Excluding items, Merck earned $1.50 per share, beating estimates of $1.34 per share, according to IBES data from Refinitiv.

The company now expects full-year adjusted profit of $5.17 to $5.37 per share, down from its prior estimate of $5.62 to $5.77 per share.