Merck fourth quarter tops expectations on strong COVID pill sales

By Michael Erman

Feb 2 (Reuters) - Merck & Co on Thursday reported higher-than-expected fourth-quarter earnings on strong sales of its COVID-19 antiviral pill molnupiravir in Asia.

The U.S. drugmaker said its sales in the quarter were $13.83 billion, up from $13.52 billion a year earlier. Analysts had expected sales of $13.67 billion, according to Refinitiv data.

Excluding items, Merck earned $1.62 a share, exceeding Wall Street expectations of $1.54 a share, according to Refinitiv.

Sales of molnupiravir were $825 million in the quarter, well over double analyst estimates of around $358 million.

Merck Chief Executive Rob Davis said the pandemic wave that moved through Asia in the fourth quarter drove sales of molnupiravir, which is sold under the brand name Lagevrio, particularly in Japan, South Korea and other areas of the Asia Pacific region.

"That really was the strength, and we've seen very good demand for Lagevrio in those markets," Davis said in an interview. "In Japan, we are a market leader."

The drug was not approved for use in China until Dec. 30, so sales there were not a factor in the fourth quarter.

The antiviral pills racked up sales of $5.2 billion in 2022, but the company expects sharply lower sales this year.

It forecast $1 billion in molnupiravir sales in 2023, mostly coming from Asian markets including China. Analysts had previously forecast around $825 million for 2023 molnupiravir sales.

Other makers of COVID-19 treatments also forecast lower 2023 sales. Pfizer reported sales of around $18.9 billion for its antiviral treatment Paxlovid in 2022 and forecast 2023 sales of around $8 billion.

Merck's blockbuster cancer immunotherapy Keytruda continues to grow, with fourth-quarter sales of $5.45 billion, up 19% from a year ago and roughly in line with analyst estimates.

The human papillomavirus (HPV) vaccine Gardasil had sales of $1.47 billion, slightly underperforming analyst expectations.

The drugmaker forecast adjusted 2023 earnings of $6.80 to $6.95 a share on sales of $57.2 billion to $58.7 billion. Analysts, on average, are estimating earnings of $7.36 on sales of $58.1 billion. (Reporting by Michael Erman Editing by Bill Berkrot)