Merck's recent Keytruda label expansion in NSCLC is more of a 'long-term' opportunity, CEO says

Merck’s most recent label expansion for Keytruda—signed off on by the FDA just last week—was hailed as a key breakthrough, allowing its use in earlier stages of non-small cell lung cancer (NSCLC).

But don’t expect the approval to boost sales of the megablockbuster much in the near future, CEO Rob Davis said on Thursday as the company presented its fourth quarter and 2022 earnings. “This is a meaningful opportunity long-term, but it’s going to take us time to ramp as we work to change the (diagnosis) paradigm,” Davis said during a conference call.

The nod clears Keytruda for use as an adjuvant after surgery and chemotherapy for early NSCLC across stages 1B through 3A, regardless of their tumor’s PD-L1 expression. It also sets Keytruda up to challenge Roche’s Tecentriq, the first immunotherapy to be sanctioned in the postsurgery adjuvant setting, 16 months ago. Keytruda’s green light covers a broader population, as Tecentriq’s approval is limited to stage 2 and 3A patients who are PD-L1 positive.

But as Davis and Dean Li, the president of Merck Laboratories, explained, that population is much lower than it should be. Of the 230,000 lung cancers detected last year in the U.S., the majority of the diagnoses were for patients already in the metastatic setting. “Only 6% of individuals who should be screened are being screened in the United States,” Li said, meaning that a huge chunk of an addressable population of 30,000 are missing out on potentially life-saving treatment.

Meanwhile, in the fourth quarter, Keytruda continued its juggernaut trajectory, raking in sales of $5.4 billion, which was a 20% increase year-over-year and matched its third-quarter performance. For the year, Keytruda pulled in $20.9 billion, up from $17.2 billion in 2021.

Another Merck stalwart, Gardasil pulled in sales of $6.9 billion last year, which was an increase of 22% from 2021.The biggest boost to the top line in 2022, though, came from COVID-19 oral antiviral Lagevrio, which pulled in sales of $5.7 billion.

Lagevrio’s sales are eroding fast, however. In the fourth quarter, it accounted for $825 million in revenue and the company projects sales to be $1 billion for all of 2023. The company was quick to point out that excluding sales of Lagevrio, revenue still was up by 12%.

Merck’s revenue for the year came in at $59.3 billion, which was a 22% increase on last year’s figure of $48.7 billion. As for revenue this year, Merck is guiding to a range of between $57.2 billion and $58.7 billion.