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Merck (MRK) - Get Merck & Company Inc. Report reported better-than-expected earnings in the third quarter and raised the lower end of guidance for the remainder of the year.

Here are some highlights from the company's earnings report and conference call:

Merck will conduct an interim analysis before the end of the year of a large, phase III study investigating its cholesterol-lowering pill anacetrapib. The interim analysis will determine if the study should continue as planned or be stopped for futility, meaning anacetrapib isn't likely to reduce the number of deaths, heart attacks, strokes or other cardiovascular events compared to a placebo.

The anacetrapib interim analysis is especially important because a phase III study of a similar cholesterol-lowering pill from Eli Lilly (LLY) - Get Eli Lilly and Company Report was stopped for futility earlier this month. On its call, Merck acknowledged the Lilly failure, but reiterated its belief that the anacetrapib study was designed to be large enough to detect a benefit in reducing heart-related adverse events and deaths.

Sales of Merck's checkpoint inhibitor cancer drug Keytruda were $159 million in the third quarter, a 45% increase sequentially, but a tad short of Wall Street's consensus estimate of $164 million. Merck defended Keytruda against investor perceptions that the drug is at a competitive disadvantage to Opdivo, the rival checkpoint inhibitor from Bristol-Myers Squibb (BMY) - Get Bristol-Myers Squibb Company Report , especially in the lucrative lung cancer market. Opdivo third-quarter sales totaled $305 million.

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Merck believes Keytruda's lung cancer label, which requires patients to be tested for PDL-1 expression with an approved diagnostic test, will become the standard of care in cancer treatment.

In hepatitis C, Merck is working towards the approval and commercial launch next year of a two-drug, single-pill therapy to compete against products from Gilead Sciences (GILD) - Get Gilead Sciences Inc. Report and Abbvie (ABBV) - Get AbbVie Inc. Report . Merck declined to comment specifically about pricing for the therapy, but said it believes it will be competitive with Gilead's Harvoni and superior to Abbvie's Viekira Pak. Investors and analysts have speculated about the likelihood that Merck will try a discount pricing strategy in order to win market share from Gilead.

Merck CEO Ken Frazier took time on the conference call to throw shade on Valeant Pharmaceuticals (VRX) and other drug industry players that rely on a business model of buying older drugs and jacking up their prices. In contrast, said Frazier, Merck remains focused on research and development to develop new, innovative drugs that have real value for patients.

On the drug pricing controversy, Frazier said there is a lot of political rhetoric being thrown around Washington, D.C., but behind the scenes, there is acknowledgement by those same politicians the drug industry is important to the U.S. economy, which will lead to "rationality" in public policy related to drug pricing. Frazier met recently with President Obama at the White House to discuss the drug pricing issue.

On business development, Merck said it will continue to pursue acquisitions and licensing deals for companies and drugs that augment its research pipeline. Merck acknowledged that the prices of companies and assets have decreased due to the recent declines in biotech stocks.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.