Merck profit beats, coronavirus uncertainty weighs on forecast

FILE PHOTO: The Merck logo is seen at a gate to the Merck & Co campus in Linden, New Jersey, U.S., July 12, 2018. REUTERS/Brendan McDermid

(Reuters) – Merck & Co Inc (MRK.N) beat analysts’ estimates for quarterly profit on Tuesday on strong demand for its blockbuster cancer drug, Keytruda, but expects coronavirus-led lockdowns to weigh on the treatment’s sales in the next few quarters.

Merck, which lowered its full-year 2020 profit forecast, said roughly 66% of its revenue is made up of drugs that are administered at a doctor’s office, including Keytruda, and social distancing measures are hitting their sales.

“The company anticipates reduced demand for its physician-administered products while pandemic-related access measures remain in place,” Merck said.

The company also said it was suspending its share buyback program.

Sales of Keytruda jumped 45% in the first quarter to $3.28 billion (2.63 billion pounds).

Net income attributable to shareholders rose to $3.22 billion, or $1.26 per share, in the quarter from $2.92 billion, or $1.12 per share, a year earlier.

Excluding items, Merck earned $1.50 per share, beating estimates of $1.34 per share, according to IBES data from Refinitiv.

The company now expects full-year adjusted profit of $5.17 to $5.37 per share, down from its prior estimate of $5.62 to $5.77 per share.

Reporting by Manas Mishra in Bengaluru; Editing by Shinjini Ganguli and Anil D’Silva

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