Merck & Co.
2017 revenue: $40.12 billion
2016 revenue: $39.80 billion
Headquarters: Kenilworth, New Jersey
Like any global drugmaker, Merck & Co. faced a bevy of challenges in 2017, a year marked by meager growth for the company. Still, there are bright spots in the performance—notably immuno-oncology star Keytruda—and that's already paying off in 2018.
Keytruda generated $3.8 billion for the year, a 172% increase over 2016, as it continues to climb the sales rankings at the New Jersey drugmaker. Januvia and Janumet still lead Merck's sales charts, though, with the pair of diabetes meds pulling in $5.9 billion, a 3% decline, amid continuing competitive pressure in the field.
Meanwhile, the human papillomavirus vaccine Gardasil is riding strong momentum despite a temporary setback during the year; its sales were up 6% to $2.3 billion. The performance came despite a cyberattack that forced Merck to borrow doses from the CDC stockpile in the third quarter, as well as temporarily shut down production. All told, Merck executives said the hack cost the company $260 million in lost sales.
Merck's hepatitis C offering Zepatier—late to the field after megablockbusters such as Gilead's Harvoni and Sovaldi—was also a big gainer for the year, nearly tripling sales to $1.66 billion.
On the other side of the coin, however, cholesterol meds Zetia and Vytorin lost exclusivity in late 2016 and April 2017, respectively. Together, their sales crashed 43% in 2017 to $2.1 billion.
Keytruda's victories in 2017 weren't just sales-oriented. The drug set itself up for megablockbuster sales in the long run with new indications, including one in the all-important first-line lung cancer field. The I-O med won a conditional nod in combination with chemo, the first I-O med to win an approval of that sort. The med also racked up a green light in bladder cancer. Blood cancer wasn't so kind; the company paused research into multiple myeloma on safety worries. And a confirmatory trial in head and neck cancer fell short, too.
More recently, Merck carried its immuno-oncology momentum into 2018. At the Annual Association for Cancer Research meeting in Chicago, a combo of Keytruda, Eli Lilly's Alimta and platinum chemo helped first-line non-small cell lung cancer patients live significantly longer than chemo alone. The combo cut death risks by 51% in the previously untreated is already reviewing a full approval for that combo based on the new data.
Merck is among a group of U.S. drugmakers to see benefit from the tax reform package passed at the end of 2017; the company took a $5 billion charge to repatriate foreign cash. With the money, Merck intends to "invest in sustainable long-term value-creating opportunities." It pledged $12 billion in spending in capital projects over the next 5 years, with $8 billion slated for the U.S.
Even as Keytruda, Gardasil and other promising products press ahead, Merck's shingles vaccine Zostavax is under a new competitive attack from GlaxoSmithKline's Shingrix. Glaxo launched Shingrix in the U.S. in late 2017, and in the fourth quarter, Zostavax's sales crashed 45%. Thanks to a preferential vote at the CDC's Advisory Committee for Immunization Practices favoring Shingrix, that trend should continue this year.