Does Merck have everything it needs for a successful pipeline? In short, no, CEO Rob Davis told investors and analysts on the company’s third-quarter conference call on Thursday. But when it comes to mergers and acquisitions, he focuses on “a list of potential investment venues.”
The CEO took a moment during the question-and-answer session to highlight Merck’s business development plans, which may or may not include Seagen, after acquisition talks reportedly stalled in August over price concerns. Davis gave no details, vaguely acknowledging that “our urgency to the business has not changed.”
“Frankly, we continue to see a range of opportunities that interest us,” Davis said. “This is our top priority because we still believe that the best thing we can do for long-term value creation is to invest in the sustainability of our business, which means investing in future pipelines.”
However, as CFO Caroline Litchfield added: “We will only act when the science aligns with the value.”
The news comes as Keytruda’s sales soared to more than $5.4 billion last quarter, up 20% from the third quarter of 2021. Merck is doubling down on its immuno-oncology blockbuster — the drug will face a patent cliff in 2028 — with a $250 million push earlier this month to combine Keytruda with one of Moderna’s personalized cancer injections.Dean Li, president of Merck Research Laboratories, has previously expressed hope that the drug will guide Merck to become This To be a leader in oncology by 2025, Moderna’s partnership and ongoing studies of the subcutaneous version should help move it into an early treatment line, he said on the third-quarter conference call.
Keytruda’s numbers were more than enough to make up for Lagevrio’s sales, which plummeted from $1.2 billion in the second quarter to $436 million last quarter. Compared with Pfizer’s Paxlovid, Merck’s Covid-19 treatment has a far smaller dose — about 4 million, according to the HHS tracker. Of the approximately 2.5 million doses of Lagevrio delivered, nearly 759,000 doses have been administered, while 8.3 million doses of Paxlovid were delivered and 5.4 million doses were administered.
Meanwhile, Davis touted the launch of its 15-valent pneumococcal conjugate vaccine, Vaxneuvance, in the pediatric setting following approval in June. The vaccine was first approved for adults in July 2021, but by then Pfizer had beaten it with 20 of its own vaccines.
Asked how Merck plans to stack up against rivals like Pfizer, Lee said: “Our view is that more serotypes aren’t always better, and one size doesn’t fit all… It’s the right medicine, or in this case the right vaccine, for the right patient at the right time.”
Davis added on the call that Merck is conducting a Phase III trial of its 21-valent drug candidate V116 in adults — “an important part of our approach to invasive pneumococcal disease in specific populations, and also Part of our broader effort to provide strong protection for infants and adults,” he said.
Merck reported that sales of Merck’s pneumococcal polysaccharide vaccine (PPSV) Pneumovax 23, approved in 1982, fell 53% in the quarter to $131 million, reflecting lower demand as the market shifts toward newer vaccines . The PPSV vaccine did not perform well in young children, leading scientists to develop newer conjugate vaccines, such as Vaxneuvance and Pfizer’s Prevnar.
That loss was offset by Gardasil vaccine sales, which reached $2.3 billion last quarter, up 15% on strong demand in China. While global immunity levels remain low, Merck said it has invested in manufacturing capacity to handle expected demand growth “now and over the longer term.”
Overall, Merck’s revenue last quarter was $15 billion, up 14% from last year. Shares in the company, $MRK, were up 2% Thursday afternoon.
Davis, who plans to succeed former chief executive Ken Fraser as chairman, said the company had come a long way in the past year.
“Do I think we have everything we need? No,” he said. “But do I think we’ve made a lot of progress in a year? I actually think we have. It gives me confidence that we’re going to continue to push progress.”