Merck & Co. Inc. (NYSE:MRK) has cut its full year profit guidance today to reflect licensing expenses related to a deal with AstraZeneca plc (LON:AZN) to co-develop a drug for treating various cancers.
Merck revealed yesterday it had agreed to pay AstraZeneca up to US$8.5bn to share the rights for ovarian cancer drug Lynparza.
The companies will work together on developing AstraZeneca’s Lynparza to treat other cancers, including combinations with their respective immuno-oncology drugs.
Under the deal, Merck will also have access to AstraZeneca's experimental lung cancer drug, selumetinibb.
Merck lowered its full year profit forecast to between US$1.60 per share and US$1.72 per share on expenses related to the deal.
However, it narrowed and raised its full-year revenue forecast to a range of US$39.4bn to US$40.4bn to reflect its efforts in restoring manufacturing operations after a cyber-attack in June.
Merck said it was yet to determine the full impact of the so-called ‘Petya’ ransomware attack that disrupted operations at a number of firms across the globe, including Reckitt Benkiser and WPP.
The company’s revised full year estimates came as it reported quarterly profit that beat analysts’ expectations.
Results were boosted by demand for its key immuno-oncology drug, Keytruda, which offset lower sales of its diabetes drugs and loss of market exclusivity for several products.
Sales climbed 1% to US$9.93bn in the second quarter, exceeding market estimates of US$9.75bn.
Sales of Keytruda, which has been used to treat melanoma and lung cancer, nearly tripled to US$881mln in the second quarter.
Net income attributable to Merck rose to US$1.95bn, or 71 cents per share, from US$1.21 billion, or 43 cents per share, a year earlier. Excluding items, Merck earned US$1.01 per share, above analysts' estimates of 87 cents.