NEW YORK – Merck reported on Thursday that in the first quarter of 2024 Keytruda (pembrolizumab) sales grew 20 percent compared to the year-ago quarter.
For the three months ended March 31, the Rahway, New Jersey-based firm reported worldwide sales of $15.78 billion, a 9 percent increase from $14.49 billion during the same period in 2023 and beating the consensus Wall Street revenue expectation of $15.20 billion. Excluding the impact from foreign exchange, worldwide sales grew 12 percent.
Pharmaceuticals contributed $14.01 billion to Q1 2024 revenues, increasing 10 percent compared to $12.72 billion in Q1 2023, driven partly by increased oncology product sales.
Merck's top-selling product, the checkpoint inhibitor Keytruda, brought in $6.94 billion in Q1 2024 versus $5.80 billion in the year-ago period. The growth was "driven by increased uptake in earlier-stage cancers and continued strong demand in metastatic indications," Merck CFO Caroline Litchfield said during a call to discuss Q1 financials.
In the US, the revenue increase was attributable to Keytruda's availability in earlier-stage NSCLC indications, such as in the neoadjuvant setting, and in advanced urothelial cancer, regardless of PD-L1 status. Outside of the US, Merck saw greater use of Keytruda among early-stage triple-negative breast cancer patients and in other settings.
In Q1 2024, the PARP inhibitor Lynparza (olaparib) recorded $292 million in revenue for Merck, a 6 percent increase from $275 million in Q1 2023. Merck comarkets Lynparza with AstraZeneca in several tumor types characterized by mutations in BRCA1/2 and other homologous recombination repair genes. Litchfield attributed the growth to higher demand in international markets.
Merck recently advanced several clinical development programs for key therapeutic assets, including starting a Phase III trial of Keytruda and the selective KRAS G12C inhibitor, MK-1084, in first-line metastatic non-small cell lung cancer characterized by KRAS G12C mutations and high PD-L1 expression.
KRAS G12C mutations show up in 12 percent to 15 percent of NSCLC patients. Although the KRAS inhibitor space is crowded, the differentiating factor for Merck, according to Dean Li, president of Merck Research Laboratories, is in combining this "potent KRAS inhibitor" with an immune-oncology agent to try to move it into the first-line setting.
"The race for us is to get it in first line," said Li during the call, noting that the company reported an overall response rate of 71 percent with the MK-1084-Keytruda combo from a Phase I study at the European Society for Medical Oncology's annual congress last year. "What you're looking for is a potent compound that has tremendous monotherapy efficacy, but most importantly, when you combine it with, for example, pembrolizumab, you maintain the dose; you maintain the ability to not have dose modifications."
Merck also recently initiated the Phase II/III REJOICE-OVARIAN01 trial with partner Daiichi Sankyo for the CDH6-targeted antibody-drug conjugate (ADC) raludotatug deruxtecan in platinum-resistant ovarian cancer. It's not yet clear if this therapy will be biomarker directed, though Merck seems intrigued by raludotatug deruxtecan's broad activity seen to date. Initial data on raludotatug deruxtecan "is striking to us," Li said, because the agent appears to benefit all comers. "In some situations, you think about a biomarker but for the CDH6 [inhibitor], the impact across biomarker subsets was quite impressive," he noted.
Although patients aren't required to have a certain level of CDH6 expression to be eligible for the REJOICE-OVARIAN01 trial, researchers will retrospectively analyze associations between CDH6 expression and treatment efficacy. Up to 85 percent of advanced ovarian cancer patients overexpress CDH6, which is associated with poor prognosis.
In December, Merck and Daiichi Sankyo submitted a premarket approval application to the US Food and Drug Administration for the ADC patritumab deruxtecan as a treatment for EGFR-mutated advanced NSCLC. The companies submitted data from the 225-patient Phase II HERTHENA-Lung01 trial, in which 29.8 percent of patients responded to third- or later-line treatment with patritumab deruxtecan. Merck and Daiichi are expecting the FDA to issue a decision on this application by June 26.
Merck executives highlighted during the call that the firm completed its acquisition of Harpoon Therapeutics during Q1 and brought into its pipeline Harpoon's T-cell engager candidates, including the DLL3-targeting candidate HPN328 (renamed MK-6070).
Merck recorded net income of $4.76 billion, or $1.87 per share, in Q1 2024, compared to $2.82 billion, or $1.11 per share, in Q1 2023. On a non-GAPP basis, Merck recorded EPS of $2.07, which exceeded the Wall Street consensus expectation of $1.87.
For the full year, Merck now expects worldwide sales in the range of $63.1 billion to $64.3 billion and non-GAAP EPS between $8.53 and $8.65. Previously, the company had estimated its 2024 revenues would be in the range of $62.7 billion to $64.2 billion and its non-GAAP EPS would be between $8.44 and $8.59.
Litchfield noted that the increase and narrowing of the 2024 sales guidance implies between 5 percent and 7 percent growth year over year and reflects Merck's expectation that Keytruda sales will continue to grow driven by approvals in additional indications and increasing patient demand.
Merck will update investors on its oncology pipeline and strategy on June 3. The webcast investor event will take place in Chicago and coincide with the American Society of Clinical Oncology's annual meeting.