Merck narrows full-year sales guidance

Investing.com - Merck has narrowed its full-year sales forecast, as a boost from an amended collaboration agreement with peer AstraZeneca and lower tariff costs was mitigated by costs connected to its purchase of Verona Pharma.

The group said in now expects annual sales to be in a range of $64.5 billion to $65 billion, compared to a prior estimate for $64.3 billion to $65.3 billion. Annual adjusted earnings per share are also seen at $8.93 to $8.98, versus a previous projection of $8.87 to $8.97.

In a statement, Merck said the outlook reflected several items not included in its guidance in the past. This included a benefit from changes to a collaboration agreement with AstraZeneca, which discontinued a revenue and cost sharing provision between the two companies.

The company, which announced a plan to pour over $70 billion in investments into its U.S. operations in a bid to shore up domestic manufacturing and avert elevated import tariffs under President Donald Trump, added that it expects to see a decline in expenses from the levies. A more favorable estimated tax rate also bolstered Merck’s guidance, despite being partially offset by a negative impact related to its acquisition of U.K.-based Verona Pharma.

Merck unveiled the roughly $10 billion deal for Verona in July, as the firm looked to add a promising respiratory treatment as part of an ongoing drive to diversify its portfolio of drug offerings.

Key patents around cancer treatment Keytruda, the world’s top-selling drug with around $30 billion in full-year sales, are set to expire in 2028, fueling a scramble by Merck to lessen its reliance on the medicine.

In its third quarter, sales grew by 3.7% versus a year ago to $17.28 billion, surpassing Bloomberg consensus estimates, as solid Keytruda demand helped to limit the blow from falling sales of human papillomavirus vaccine Gardasil in China. Adjusted earnings stood at $2.58 per share.

Shares of Merck were lower by more than 1% in premarket U.S. trading on Thursday.

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