Will Merck’s #1 Therapeutic Area With $10 Billion In Revenue Grow?

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Downside
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Market
122
Trefis
MRK: Merck logo
MRK
Merck

Merck’s (NYSE:MRK) anti-infectious drugs business is the company’s largest therapeutic area and it will likely decline in low-single-digits from about $10.9 billion in 2018 to $10.4 billion in 2021, according to Trefis estimates. This decline will likely be driven by lower sales from Zepatier, Invanz, and Cubicin among others, as some of these drugs have lost market exclusivity in the recent past, or they face competition from other pharmaceutical companies. In this analysis, we also compare Merck’s anti-infectious drugs’ sales growth vis-à-vis its primary competitors. You can view our interactive dashboard analysis ~ Will Merck’s #1 Therapeutic Area With $10 Billion In Revenue Grow? ~ for more details. In addition, you can see more of healthcare companies data here.

Merck’s Anti-Infectious Drugs Portfolio Revenue Is Bigger Than That of Pfizer, Johnson & Johnson, And Bristol-Myers Squibb

  • Average Annual Growth:
    • Merck: 3.7%
    • Pfizer: 0.3%
    • Johnson & Johnson: -11.0%
    • Bristol-Myers Squibb: -20.2%
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Merck’s Anti-Infectious Drugs Revenue Could Decline In The Coming Years

  • Merck’s anti-infectious drugs’ sales have grown at a faster pace, when compared to its peers.
  • They grew from $9.45 billion in 2014 to $10.86 billion in 2018.
  • This can primarily be attributed to higher Proquad and Gardasil sales.
  • Looking forward, the sales will likely decline in low-single-digits on average to $10.38 billion in 2021, as growth in Gardasil and Proquad’s sales will be offset by a decline in other drugs’ sales.

Merck’s Share In Anti-Infectious Drugs Market Could Grow As Its Peers Could See Decline At A Faster Pace

  • Combined Anti-Infectious drugs revenue for Merck, Pfizer, Johnson & Johnson, and Bristol-Myers Squibb declined at an average annual rate of 3.8% from $27.4 billion in 2014 to $23.4 billion in 2018.
  • Merck’s share has grown from around 34% in 2014 to 46% in 2018, as it saw growth in anti-infectious drugs’ sales while the combined sales were down during the same period.
  • Looking forward, this trend could continue with Merck’s share increasing to 49%, as it is expected to decline at a slower pace, when compared to its peers.

While Gardasil And Proquad Have Made Up For The Declines From Zepatier, Invanz, and Cubicin, It Hasn’t Been Enough And The Trend Is Expected To Continue

  • Gardasil continues to do well for Merck, and annual sales could remain north of $3 billion over the next three years, given it is an important vaccine for prevention against HPV (human papillomavirus) virus, which has been linked to certain types of cancers. Proquad sales growth will likely be led by higher volume, and pricing gains, a trend seen in the recent past.
  • The decline in anti-infectious drugs’ sales will likely be led by Zepatier, Isentress, Cubicin, Noxafil, and Invanz. These drugs will likely offset the expected growth in Gardasil and Proquad.
  • Zepatier saw a massive decline in sales from $1.6 billion in 2017 to $455 million in 2018, due to increasing competition and declining patient volume.
  • Isentress sales could see some headwinds from strong competition from other players, including Gilead Sciences’ Truvada, Atripla, Stribild, Johnson & Johnson’s Prezista, and GlaxoSmithKline’s Triumeq.
  • Cubicin lost its marketing exclusivity in 2016, and now faces generic competition. Noxafil market exclusivity period ends in 2019, and it will likely see a drop in sales going forward. Invanz lost its patent exclusivity in December 2017, and it is now witnessing a decline in sales.

Here Are The Key Patent Expiration Milestones For Merck’s Anti-Infectious Drugs

  • Isentress: 2024 (US)  2022 (EU)
  • Gardasil 9: 2028 (US) 2025 (EU)
  • Noxafil: 2019 (US) 2019 (EU)

Anti-Infectious Drugs Also Account For Over A Quarter of Merck’s Total Sales; However, Its Contribution To Merck’s Top Line Has Shrunk And The Trend Is Expected To Continue

  • Merck’s Anti-Infectious drugs sales accounted for 22.4% of the company’s total revenues in 2014.
  • The figure increased to 28.3% in 2017 before falling to 25.7% in 2018, primarily due to lower Zepatier sales. We expect the figure to fall further to 24.2% in 2021, as the company’s other therapeutic areas, such as oncology, could grow at a faster pace, and contribute more to the company’s top line.

 

 

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