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Jul 27, 2018

Merck’s blockbuster cancer treatment powers profit

Merck & Co

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Merck & Co.’s blockbuster cancer treatment Keytruda continued to reap rewards as its market domination expanded, leading to strong second-quarter sales and an increase in the drugmaker’s earnings forecast.

Part of a new class of drugs that harness the body’s immune system to attack tumors, Keytruda sold US$1.67 billion in the quarter, an increase of nearly 90 per cent from the same time a year ago and in line with analysts’ estimates of US$1.66 billion.

The drug has become a core element of Merck’s growth, particularly in the large and lucrative area of lung cancer. Earlier this year the drug showed what analysts called practice-changing results when combined with chemotherapy. Some analysts expect the majority of previously untreated patients to be taking the drug by the end of 2018. By 2020, analysts predict it will sell more than US$10 billion annually.

Shares of the Kenilworth, New Jersey-based company were up 1.2 per cent in premarket trading in New York. Through Thursday’s close, the stock had gained nearly 14 per cent this year.

Merck continues to see success with Keytruda in additional trials while adding indications in the U.S. and overseas. This week, China signed off on treating patients with advanced melanoma with the drug.

The Januvia and Janumet diabetes treatment franchise sold $1.54 billion last quarter, better than the US$1.51 billion forecast by analysts. Vaccine Gardasil franchise sold US$608 million, compared to analyst estimates of US$593 million.

As several rivals promised not to raise drug prices this year amid criticism of the industry by President Donald Trump, Merck said this month it plans to lower some prices. Merck said it was cutting the price on hepatitis C treatment Zepatier by 60 percent, though that drug has struggled to take market share from expensive rivals. The drug brought in $113 million in the second quarter, down from US$517 million a year ago.

Merck said its adjusted quarterly profit was US$1.06 a share, compared to the US$1.03 a share predicted by analysts. The company said in a statement that it now expects adjusted earnings per share of between US$4.22 and US$4.30, up from its previous guidance of $4.16 to $4.28.