Merck Q2 2021 Earnings Report
Key Takeaways
Merck reported a strong second quarter in 2021, with pharmaceutical sales increasing by 22% to $10.0 billion and animal health sales totaling $1.5 billion, up 34% year-over-year. GAAP EPS was $0.48, which includes a $1.7 billion charge for the acquisition of Pandion Therapeutics, Inc, and non-GAAP EPS was $1.31.
Pharmaceutical sales increased 22% to $10.0 billion, driven by oncology and vaccine growth.
KEYTRUDA sales rose 23% to $4.2 billion, reflecting strong momentum in non-small-cell lung cancer and other indications.
GARDASIL/GARDASIL 9 sales rebounded to $1.2 billion, growing 88% due to COVID-19 recovery and strong demand.
Animal Health sales totaled $1.5 billion, an increase of 34%, driven by companion animal products.
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Forward Guidance
Merck expects sales growth of 12% to 14% in 2021, with full-year revenue estimated between $46.4 billion and $47.4 billion. Full-year 2021 GAAP EPS is expected to be between $4.24 and $4.34, and non-GAAP EPS is expected to be between $5.47 and $5.57.
Positive Outlook
- Strong global underlying demand across the business
- Sales growth of 12% to 14% expected in 2021
- Full-year 2021 revenue estimated to be between $46.4 billion and $47.4 billion
- Full-year 2021 GAAP EPS expected to be between $4.24 and $4.34
- Full-year 2021 non-GAAP EPS expected to be between $5.47 and $5.57
Challenges Ahead
- Pandemic will have a net unfavorable impact to 2021 revenues of less than 3%, all of which relates to the pharmaceutical segment
- Unfavorable effects of foreign exchange
- Pricing pressure
- Higher manufacturing costs
- The sales nor the EPS guidance ranges provided above include the impact of the potential launch of Merck’s COVID-19 antiviral drug candidate, molnupiravir.