Merck Swings Into Q2 Loss On Prometheus Biosciences Acquisition Charge, But Raises FY23 Revenue Outlook

Merck & Co Inc's MRK Q2 sales reached $15.04 billion, up 3% Y/Y, beating the consensus of $14.39 billion.

Excluding Lagevrio (COVID-19 treatment), sales growth was 11%; excluding Lagevrio and the impact of foreign exchange, growth was 14%.

Pharmaceutical sales increased by 6% to $13.46 billion, primarily due to higher sales in oncology, vaccines, and hospital acute care, partially offset by Lagevrio and diabetes.

Ketruda sales grew 19% to $6.27 billion. Lagevrio Q1 sales declined 88% Y/Y to $392 million, and Gardasil/Gardasil sales grew 47% to $2.45 billion.

Adjusted EPS loss came in at $(2.06), a turnaround from EPS income of $1.87, surpassing the consensus of $(2.17), impacted by the acquisition charge of $4.02 per share for Prometheus Biosciences deal of $200.00 per share in cash for a total equity value of ~$10.8 billion.

2023 Guidance: Merck has revised FY23 revenue guidance to $58.6-$59.6 billion versus consensus of $53.18 billion and prior guidance of $57.7-$58.9 billion.

It forecasts adjusted EPS of $2.95-$3.05 versus consensus of $2.60 and prior guidance Of $6.88-$7.00 due to a charge of $10.2 billion, or $4.02 per share, for the acquisition of Prometheus.

Merck anticipates FY23 sales Of $57.7-$58.9 billion compared to previously expected $57.2-$58.7 billion and the consensus of $58.28 billion.

Price Action: MRK shares are up 1.74% at $108.51 during the premarket session on the last check Tuesday.