Merck & Co. said its second-quarter earnings rose as the drugmaker recorded blockbuster growth for its cancer drug Keytruda.
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New products helped lift pharmaceutical revenue 0.7% to $8.76 billion but increased competition from generic drugs weighed down the growth.
Merck shares rose 1.3% to $64.50 during premarket trading Friday after gaining 8.2% so far this year.
The market for lower-cost generic versions of biotechnology drugs continues to hurt New Jersey-based Merck in Europe. But in the U.S., the drugmaker is setting itself to benefit from biosimilar competition.
Recently the company announced a partnership with Samsung Bioepis Co. to market a biosimilar version of Johnson & Johnson's Remicade in the U.S. at a 35% discount, hoping to steal market share. In Europe, where Merck has a longstanding partnership with Johnson & Johnson, the introduction of biosimilars by other companies knocked Merck's Remicade sales down 39% in the second quarter.
Keytruda sales jumped to $881 million from $314 million a year earlier as the Merck continued to market the product with new uses around the world.
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The company also said it expects a smaller negative impact from foreign currencies and raised the top end of its full-year guidance range. Merck now sees 2017 sales between $39.4 billion and $40.4 billion, compared with prior guidance of $39.1 billion to $40.3 billion. Analysts polled by Thomson Reuters had forecast $40.1 billion in annual revenue.
In all Merck topped views reporting earnings of $1.95 billion, or 71 cents a share, up from $1.21 billion, or 43 cents a share, a year earlier. Excluding certain items, earnings rose to $1.01 a share from 93 cents. Revenue grew 0.9% to $9.93 billion.
Analysts polled by Thomson Reuters had forecast earnings of 87 cents a share on $9.75 billion in sales.
On Thursday, AstraZeneca PLC said it would share the rights to its ovarian cancer drug Lynparza with Merck. Under the terms of the deal, Merck will pay $1.6 billion to AstraZeneca up front, $750 million in option payments and another $6.15 billion over time based on development and sales targets. The companies will share profits generated from the drug and work together on developing it to treat other cancers, including combinations with their respective immuno-oncology drugs. The deal also gives Merck access to AstraZeneca's experimental lung cancer drug selumetinib.
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(END) Dow Jones Newswires
July 28, 2017 08:14 ET (12:14 GMT)