Merck has high Keytruda hopes outside U.S., but Q1 details sparse

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Steady Keytruda sales outside the United States were noted by executives on the first-quarter earnings call by Merck ($MRK)--although details were sparse on particular markets and expansion of indications.

Ken Frazier, chairman and CEO, stated the obvious in opening remarks on the May 5 call, noting "our Keytruda (pembrolizumab) program expanded as we continued to launch this important cancer medicine around the world."

That left analyst Tim Anderson to press a host of questions, particularly what indications and geographies were driving sales as well as what to expect from the competition in Bristol-Myers Squibb ($BMY) and Opdivo (nivolumab) in lung cancer. BMS bought the originator company, Medarex, which had a previous deal with Ono Pharmaceuticals in Japan and its holding rights.

Those questions were handled by Adam Schechter, an executive vice president and president for Global Human Health, who filled in broad details--but not country-specific.

"If you look at Keytruda, as you said, we reported about $250 million of sales for the quarter, so we are now trending--if you just look--at about a billion-dollar product, just based on where we are today," Schechter said, adding that about half the sales were outside the U.S. with the "vast majority of the sales are still coming from melanoma indications."

Late last year, Merck launched Keytruda in Singapore for melanoma, marking the first foray into Southeast Asia. The therapy has been available in Australia but remains pending in New Zealand as price negotiations continue.

For other markets in melanoma, Schechter gave broad indications.

"We're launching in melanoma in approximately 50 markets globally, and in some markets we are the market leader despite being second to launch," he said. "Given the strong survival results we've demonstrated in melanoma and second-line lung cancer, the early data we've seen in more than 20 cancer types, as well as the breadth and the depth of the Keytruda development program, we remain confident that Keytruda will become foundational to the treatment of cancer over time."

On that lung cancer indication outside of the U.S., Schechter did not provide details, but Roger Perlmutter, the executive vice president and president for Research Laboratories, said details on the therapy will come out at the American Society for Clinical Oncology (ASCO) meeting next month.

Outside of Keytruda, there were also some broad trends on Type 2 diabetes treatment Januvia (sitagliptin)--which cited Japan as a growth market--but emerging markets and particularly Venezuela were down on the quarter. "Excluding Venezuela, Januvia franchise sales grew 5% outside of the U.S.," Schechter said, adding that the first-quarter figures “demonstrate that we can continue to grow volume and retain strong market share of about 75% in the United States and 65% globally.”

Schechter added later that in countries like China, overall growth in constant currency reached about 11% with "good success in the areas of vaccines, our diabetes franchise, and so forth."

Rob David, an executive vice president and chief financial officer, gave specifics on the hit from Venezuela.

"Venezuela negatively impacted Q1 revenues by approximately $240 million, reflecting the reduction of our operations in the country," he said. "As a reminder, we recorded $625 million of sales in Venezuela in 2015, which were more weighted to the first half of the year, so the year-over-year impact will be greatest in the first two quarters of this year."

- here's the Merck release (PDF)

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