Earlier this year, Merck warned investors that the COVID-19 pandemic would take a multbillion-dollar bite out of its revenue expectations for 2020. And in the second quarter, that prediction took shape.
The pandemic hurt Merck's pharmaceutical sales by about $1.5 billion from April to June, the drugmaker reported, despite continued growth for its cancer medicines. Sales for vaccines and hospital acute products fell dramatically amid lockdowns to slow the spread of COVID-19.
As societies shut down earlier this year, Merck’s oncology business was “particularly resilient," CFO Rob Davis said on Friday’s conference call with analysts. Sales for Lynparza and Lenvima, two oral cancer medications, grew 62% and 57%, respectively. Keytruda, a physician-administered IV, also posted sales growth despite challenges associated with getting patients into doctors’ offices. The med’s sales jumped 29% to $3.39 billion thanks to uptake in multiple cancers, including lung cancer, melanoma and kidney cancer.
In April and May, new patient starts for Keytruda slid between 5% and 10% depending on cancer type, chief commercial officer Frank Clyburn told analysts on Friday’s conference call. But now, oncologists are “figuring out ways to be able to get patients into their practices” and new patient starts are improving to “almost pre-COVID" levels, he said.
On the flip side, vaccines tumbled due to a drop in wellness visits. Doctor visits were down “significantly” in April and May, Clyburn said, but the company is seeing an “encouraging” recovery in pediatric visits more recently. Still, visits for adolescents are “lagging behind,” he said, so the company is keeping an eye on its important HPV vaccine Gardasil, which is recommended for children ages 11 to 12. Sales for that shot fell 26% during the quarter to $656 million.
Pediatric vaccines, meanwhile, sunk even more during the second quarter, toppling 44% to $378 million. Overall, Merck’s sales slipped 8% versus the same period last year, but CEO Ken Frazier said the company exited the quarter with “accelerating business momentum" and execs predicted a recovery during the second half of the year.
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As for Merck's participation in the hunt for a COVID-19 vaccine, the company plans to start human testing on one of its candidates soon, execs said Friday. The Big Pharma isn’t among the group of initial frontrunners, but R&D chief Roger Perlmutter voiced optimism Friday in how the industry's development efforts are going so far. The data he’s seen are “as good as one could hope for,” he noted.