NEW YORK – It's been 10 years since the US Food and Drug Administration approved the first indication for Merck's Keytruda (pembrolizumab), and over that time, the immunotherapy has racked up 41 FDA-approved indications.
All those Keytruda indications have been a financial boon for Merck. The checkpoint inhibitor was the bestselling drug in 2023, grossing $25.01 billion in sales. The drug's 2024 sales might top that record, having already brought in $6.94 billion in Q1, $7.27 billion in Q2, and $7.43 billion in Q3 — totaling $21.64 billion in the first three quarters of 2024.
During the three months ending Sept. 30, Keytruda's $7.43 billion in sales were a 17 percent increase from $6.34 billion in Q3 2023. Global Keytruda growth during the last quarter was driven by increased uptake among patients with earlier-stage cancers, including those with high-risk, early-stage triple-negative breast cancer, Merck CFO Caroline Litchfield said in a Thursday morning call to discuss the Rahway, New Jersey-based drugmaker's third-quarter results.
But during the call, Merck execs were keen to underscore, as they have been in recent years as the 2028 expiration deadline for Keytruda's first patents creeps up, that the company is focused on diversifying its oncology pipeline and moving away from overreliance on the blockbuster immune checkpoint inhibitor.
Part of Merck's diversification strategy will involve deals with other drugmakers. For instance, the firm recently inked a collaboration with Exelixis to jointly develop its tyrosine kinase inhibitor zanzalintinib alongside Keytruda for PD-L1 head and neck cancer patients. Merck is also partnering to study Daiichi Sankyo's antibody-drug conjugates in combination with its own agents. For instance, Merck and Daiichi Sankyo are studying the investigational delta-like ligand 3-targeting T-cell engager MK-6070 in combination with various antibody-drug conjugates across multiple cancer indications.
Merck is focused on advancing its collaboration with Moderna to evaluate the personalized neoadjuvant cancer vaccine, V940, combined with Keytruda. Just this week, the drugmakers announced the start of the Phase III INTerpath-009 clinical trial evaluating the combination in patients with stage II, IIIA, or IIIB non-small cell lung cancer who have not experienced a pathological complete response after neoadjuvant Keytruda plus chemotherapy and surgery.
"We're launching important new products to solve for unmet medical needs, which have significant commercial potential," Merck Chairman and CEO Robert Davis said on the call. "We're advancing novel clinical programs across a pipeline of diversified therapeutic areas and modalities, and we're adding to our internal research and development efforts through value-creating business development transactions."
Indeed, Merck's R&D expenses during Q3 2024 grew 77 percent to $5.86 billion, from $3.31 billion in Q3 2023. As a result of this increased R&D focus, "Merck is moving toward a future with a much more diversified portfolio," Davis said.
For the time being, however, Keytruda sales still accounted for a significant portion, nearly 45 percent, of the $16.66 billion in overall revenue Merck recorded in the third quarter. This was a 4 percent increase from $15.96 billion in Q3 2023 and exceeded analysts' consensus revenue estimate of $16.46 billion. Excluding the impact of foreign exchange rates, Merck's overall revenue increased 7 percent during this period. Merck's pharmaceutical sales were $14.94 billion in Q3 2024, up 5 percent from $14.26 billion in Q3 2023.
Lynparza (olaparib), the PARP inhibitor that Merck jointly markets with AstraZeneca, brought in $337 million for Merck in Q3 2024, up 13 percent from $299 million in Q3 2023. The firm attributed the growth to increased global uptake.
Sales of Welireg (belzutifan) more than doubled during Q3 2024 to $139 million, from $54 million in Q3 2023. The exponential revenue growth for this HIF-2α inhibitor, which Merck sells as a treatment for patients with von Hippel-Lindau-associated renal cell carcinoma, pancreatic neuroendocrine tumors, or central nervous system hemangioblastomas, was due to increased uptake in a broader kidney cancer indication that the FDA approved last year.
During Q3 2024, Merck recorded net income of $3.16 billion, or $1.24 per share, compared to $4.75 billion, or $1.86 per share, in Q3 2023. On a non-GAAP basis, Merck's earnings per share was $1.57 in Q3 2024, which beat analysts' average estimate of $1.50 per share.
For the full year, Merck expects revenues in the range of $63.6 billion and $64.1 billion and non-GAAP EPS in the range of $7.72 and $7.77. Previously, the drugmaker was estimating revenues to fall between $63.4 billion and $64.4 billion and non-GAAP EPS to fall between $7.94 and $8.04.