Merck, Bristol Dive As Cancer Blockbusters Struggle To Outweigh Other Declines

Merck (MRK), a pharmaceutical giant, topped Wall Street’s expectations for the first quarter of this year on Thursday. Bristol Myers Squibb delivered a mixed result. Both Merck and BMY stocks fell in the morning.

Keytruda, a cancer treatment, and Opdivo, a drug that treats cancer, helped Merck and Bristol grow. Keytruda's sales increased by 20%, to $5.8 billion. Opdivo's sales rose 15%, to $2.2 billion. Both drugs exceeded analyst expectations.

Gardasil was also a major contributor to Merck's success, with sales of $1.97 billion, up 35%. Bristol Myers' top-selling drug was Eliquis, an anticoagulant that brought in $3.42 billion. Eliquis sales grew 7%.

Both companies had to deal with steep declines. Merck's Covid tablet Lagevrio, and Bristol's cancer drug Revlimid both experienced double-digit sales declines. Lagevrio has been struggling since January, when Covid cases reported by the Centers for Disease Control and Prevention reached a peak. Since then they have trended downwards. Revlimid faces new generic competition.

Merck's stock fell 1.5% in morning trading today, trading at around 111.70. BMY also fell 1.5% to 67.

Merck Stock: Lighter Declines

Merck's adjusted profits fell 35%, to $1.40 a share. Sales dropped 9%, to $14.49 Billion. Earnings fell by 30% excluding the effect of exchange rates while sales dropped 5%.

FactSet reports that Merck analysts had expected a much more dramatic decline in adjusted earnings to $1.32 per share and $13.79billion in sales. Sales grew by 15%, even after excluding the effects of Covid pill Lagevrio, exchange rates and Covid pill Lagevrio.

The sales of Lagevrio plummeted by 88%, to $392 millions. In a client note, Lee Brown, Global Sector Lead for Health Care at Third Bridge, said that this "painfully" (underscores the transition to a new post-pandemic world.

Merck isn’t the only one feeling the decline of Covid. GSK (GSK), and Roche (RHHBY), both reported first-quarter declines in their Covid products, after the number of Covid cases in the U.S. fell early in the quarter.

Sales of Merck's diabetes medication Januvia also fell 29%, to $880 millions. Sales were below expectations of $923 million. Merck said it faces competition abroad, especially in Europe, in the diabetes market. The U.S. market also saw a decline in revenue due to lower prices and demand.

Merck has raised its sales forecast for the coming year. It now expects $57,7 billion to $58,9 billion. This is in line with Merck's stock analysts who predicted $58.33billion. The company has also increased its profit forecast to $6.88-$7 a share. Merck's midpoint forecast was higher than the $6.91 expected by analysts.

MarketSmith.com reveals that Merck recently broke through a consolidation, with a buying point of 115.59. The shares dropped below the entry point on Wednesday, and continued to drop Thursday.

BMY Stock: "Rather Lackluster" Report

Bristol Myers struggles to reverse sales declines in its generics, Revlimid, and Abraxane (a cancer drug), Brown stated separately.

He said that "Bristol’s overall performance across their portfolio felt rather lackluster despite the management's description as a strong showing. Many product lines fell below expectations, with notable exceptions of Eliquis, and Opdivo where results were basically in line."

Bristol's total sales fell 3%, to $11.34 Billion. FactSet reported that BMY analysts had expected slightly higher sales of $11.5 billion. Earnings adjusted up 5%, to $2.05 per shares. This exceeded expectations of $1.97.

Revlimid's sales fell 37%, to $1.75 Billion. Abraxane revenues rose 12% to $239 Million.

Bristol Myers has maintained its sales guidance for the coming year. The company expects a 2% increase in sales. The company expects to earn between $7.95 and $8.25 per share. Analysts at BMY expect $46.86 Billion in sales (up 1.5%), and $8.05 per share in adjusted earnings.