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Pharmaceutical company Merck on Friday exceeded Wall Street expectations in the second quarter and raised its general profit forecasts for the year. The worst of the coronavirus pandemic is behind it.
The company, which plans to develop two vaccines and one treatment for Covid-19, told investors that the "majority of negative effects" weighed on earnings in the quarter. A gradual recovery is expected through the third quarter, "with a return to normal operating levels in the fourth quarter."
The company's shares rose almost 3% in premarket trading. The Covid 19 pandemic cost Merck $ 1.6 billion in lost revenue in the quarter as fewer people visited doctors' offices. The company estimated the pandemic's impact on total sales in 2020 at $ 1.95 billion, slightly less than previous forecasts.
Sales of the blockbuster cancer drug Keytruda helped offset an 8% decrease in sales to $ 10.87 billion in the three months ended June 30, compared to $ 11.76 billion a year earlier.
The New Jersey-based company previously warned that the coronavirus would reach sales in 2020 as the pandemic prevented people from going to doctors' offices in the second quarter. Doctors manage two-thirds of the company's products, including Keytruda, said CFO Robert Davis during the company's first-quarter conference call.
Keytruda's revenue increased 29% from $ 2.36 billion a year earlier to $ 3.9 billion.
Based on Refinitiv's average analyst estimates, the company performed as follows compared to Wall Street expectations.
Adjusted earnings per share: $ 1.37 vs. $ 1.04 expected. Revenue: $ 10.87 billion expected, compared to $ 10.39 billion.
Merck now expects full-year adjusted earnings of $ 5.63 to $ 5.78 per share compared to its previous forecast of $ 5.17 to $ 5.37 per share. Net income attributable to shareholders rose in the quarter from $ 2.67 billion, or $ 1.03 per share last year, to $ 3 billion, or $ 1.18 per share.
Merck is one of several companies that are working on the development of Covid-19 vaccines and therapeutics, although the company later entered the race than many others, including pharmaceutical giants Pfizer, Johnson & Johnson and Moderna.
Merck acquired the Austrian vaccine manufacturer Themis Bioscience, which is developing a Covid-19 vaccine together with the Pasteur Institute and the University of Pittsburgh. The company announced that clinical trials for the candidate should begin on Friday in the third quarter.
It is also working with the non-profit IAVI for scientific research on a separate Covid vaccine. The company also announced a collaboration with Ridgeback Biotherapeutics to develop an oral antiviral therapeutic against Covid. Merck said Friday’s clinical trials for this vaccine candidate will start later this year.
Julie Gerberding, Merck's chief patient officer, told Congress on July 21 that the company would not sell its vaccines at cost if approved by regulators, although it added that the company was "far from that." To understand the cost base ". Merck has not yet started human trials for its vaccine candidates, far behind some of its competitors, such as Moderna and Pfizer, who began their late-stage trials on Monday.
Merck executives will announce their results on Friday at 8:00 a.m. [CET].