Merck posts a loss of $2.1B in Q4; longtime CEO Frazier to retire
Merck recently announced that it was scrapping its two COVID-19 vaccine candidates.
Merck posted a big fourth-quarter loss due to a hefty charge and higher spending on research, production and overhead. The company also announced Ken Frazier, its longtime chief executive, will retire on July 1.
Frazier, Merck’s CEO for the past decade, will be replaced by Rob Davis, the chief financial officer, the company said on Feb. 4. Frazier will become executive chairman of the board during a transition period.
Merck, one of the world’s vaccine makers, recently announced that it was scrapping its two COVID-19 vaccine candidates, but is continuing to develop a pair of potential treatments for the new coronavirus.
The Kenilworth, New Jersey, company lost $2.09 billion, or $0.83 per share. Adjusted income came to $3.4 billion, or $1.32 per share, well short of the $1.38 Wall Street was looking for, according to a survey by FactSet.
A year earlier, Merck posted net income of 2.36 billion, or $0.92 per share.
The fourth-quarter results included two sizeable charges: an asset impairment charge of $1.6 billion for antibiotic Zerbaxa, which instituted a recall in December and has temporarily suspended sales, and a $2.7 billion charge for acquiring cancer drug developer VelosBio.
The VelosBio deal was aimed at expanding Merck’s cancer drug franchise, which is focused on immunotherapy treatment Keytruda, now approved for dozens of cancer types and patient groups. One of the world’s most lucrative drugs, Keytruda brought in a whopping $14.4 billion in 2020 sales.
Keytruda sales came in just under $4 billion in the quarter, up 28% from a year earlier. Gardasil, a vaccine to prevent the cancer-causing human papilloma virus, had sales of $998 million, up 44%, while Januvia and Janumet diabetes pills had combined sales of $1.3 billion.
Overall revenue was $12.51 billion, up 5% from a year earlier. That was also shy of the $12.67 billion projected by analysts.