Merck beat first-quarter expectations and hiked its 2023 forecast even as sales plunged for its COVID-19 treatment and a strong dollar hurt revenue.
Soaring sales of the drugmaker's top seller, the cancer treatment Keytruda, helped counter those hits, a drop expected by analysts.
Merck said Thursday that sales of the COVID-19 treatment Lagevrio sank 88% in the quarter to $392 million.
Lagevrio and Pfizer's Paxlovid debuted well over a year ago, as COVID-19 cases were surging and patients were eager to try the first pill treatments for the virus. Sales of Lagevrio have since cooled in both the U.S. and United Kingdom.
Merck's drug inserts tiny errors into the coronavirus' genetic code to slow its reproduction. U.S. regulators have said it should be used cautiously. In February, a European medical committee recommended rejection of the drug.
Merck still expects about $1 billion in sales from Lagevrio this year.
The drugmaker's total revenue fell 9% to $14.49 billion in the quarter. That beat analyst expectations for $13.79 billion, according to the data firm FactSet.
Not counting Lagevrio and the impact of foreign exchange rates, sales climbed 18%, Merck said.
A strong U.S. dollar can affect sales for companies that do a lot of international business. They have to convert those sales into dollars when they report earnings. The stronger dollar decreases the value of those sales.
Keytruda sales jumped 20% to $5.8 billion, and revenue from its Gardasil vaccines also soared.
Overall, Merck's profit fell 35% to $2.82 billion, and earnings adjusted for one-time items totaled $1.40 per share.
Analysts expect earnings of $1.32 per share.
Merck also raised and tightened its 2023 forecast on Thursday. The company now expects adjusted earnings to range between $6.88 and $7 per share.
FactSet says analysts expect earnings of $6.91 per share for the full year.
Merck & Co. Inc. said the forecast doesn't include any impact from the roughly $10.8 billion acquisition of Prometheus Biosciences that it announced April 16.
The drugmaker is attempting to add more variety to its product portfolio. Prometheus is developing a potential treatment for inflammatory bowel diseases like ulcerative colitis and Crohn's disease.
Shares of Rahway, New Jersey-based Merck climbed more than 2% to $116 before markets opened Thursday.