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Affected by reduced demand for Covid drug Molnupiravir, Merck has published reduced revenue figures according to its Q1 2023 report.
Multinational pharmaceutical giant Merck & Co Inc (NYSE: MRK) has released its Q1 2023 report. The company’s figures show a reduction in revenue due to several factors, including a plunge in sales. According to published figures, Merck’s Q1 revenue is 9% lower than reported in Q1 2022. This is mainly because its Molnupiravir Covid treatment drug has seen a considerable drop in demand. At the press time, MRK stock is 1% down, trading at $112.23.
According to the report, Merck pulled in $14.5 billion in total revenue for the quarter, a $1.5 billion reduction from the first quarter of last year. However, Merck said its revenue climbed 11%, outside of the Molnupiravir sales crash. In the first three months of 2023, Merck sold $392 million’s worth of the antiviral treatment. This is a heavy 88% crash compared to the $3.2 billion recorded for the same period in 2022. According to Merck, this plunge was largely felt in Australia, Japan, the US, and the UK.
Molnupiravir was one of the first drugs approved for the treatment of COVID. In 2021, the UK’s Medicines and Healthcare Products Regulatory Agency (MHRA) approved the drug under the name Lagevrio. In the same year, the FDA also issued an emergency use authorization (EUA) for Molnupiravir. Following the approval, Merck said it would deliver up to 10 million courses that year, and more than 20 million last year.
Merck Q1 2023 Figures
Merck’s total revenue of $14.49 billion beat the $13.78 billion expected by analysts surveyed by Refinitiv. The analysts also expected adjusted earnings per share (EPS) of $1.32, lower than the $1.40 reported. For net income, Merck said it pulled in $2.82 billion ($1.11 per share), much lower than the $4.31 billion ($1.70) the company reported for Q1 2022.
The New Jersey-based pharma giant has now raised its forecast for 2023. In early February, Merck’s sales guidance was $57.2 to $58.7 billion, now slightly changed to the $57.7 billion to $58.9 billion range. This new figure accounts for $1 billion in expected Molnupiravir sales. In addition to raised sales, Merck increased its 2023 adjusted earnings outlook to between $6.88 and $7.00 per share. This is higher than the earlier $6.80 to $6.95 forecast.
Interestingly, Merck’s official report specifies that the projected outlook does not accommodate any impact from its planned acquisition of biotech firm Prometheus Biosciences. The acquisition should finalize sometime in Q3 2023.
Merck and Seagen
The expected deal with Prometheus Biosciences is not Merck’s first attempt at acquiring a biotech company. Last year, Merck entered advanced talks with biotech and drug manufacturing firm Seagen Inc (NASDAQ: SGEN). The deal was reportedly worth $40 billion at approximately $200 per Seagen share. Unfortunately, the deal fell through for antitrust reasons. There were more than a few concerns that the deal would attract an antitrust investigation from the Federal Trade Commission (FTC). As of last month, Pfizer (NYSE: PFE), Pfizer is now set to acquire Seagen for $43 billion or $229 per share. Pfizer said it hopes to advance the battle against cancer through Seagen.