Merck KGaA (MKGAY) posted slightly stronger-than-expected first quarter earnings Thursday and nudged its full-year profit guidance higher after a key drug approval in the United States.
Merck said adjusted operating profits for the three months ending in March rose 14.5% to €1.2 billion, modestly ahead of an analysts' consensus compiled by Reuters. Sales for the period, Merck said, rose 5.3% to €3.9 billion, driven mainly by its Healthcare and Life Science business sectors.
"For Merck, 2017 is another year of many challenges as well as tremendous opportunities. I am confident that we will seize these opportunities by further driving our clear growth strategy for our three business sectors forward," said CEO Stefan Oschmann. "We again achieved profitable growth in the first quarter. Two approvals for our immuno-oncology medicine Bavencio in the United States within a short period of time are a great success following long and hard work."
The group said its sees full year adjusted operating profits of between €4.4 billion and €4.6 billion, a modestly stronger outlook from the previous forecast of last year's €4.5 billion.
Earlier this year, the U.S. Food & Drug Administration approved Merck's rare form of skin cancer treatment that could cost patients as much as $13,000 per month.
The FDA said that Merck, along with Pfizer Inc. (PFE) , can begin treating patients with metastatic Merkel cell carcinoma, a rare and aggressive form of skin cancer, with a new drug called Bavencio.
Rvials Bristol-Myers Squibb (BMY) , Merck & Co (MRK) . and Roche Holding AG (RHHBY) all have similar treatment forms on the market, while AstraZeneca plc (AZN) is awaiting final approval. However, Bavencio will treat patients suffering from the disease after it has spread to other parts of the body, making it the only drug approved to do so by the FDA.
The drug was developed with Pfizer as part of an agreement from 2014 that paid Merck $850 million at the time, with the potential to receive regulatory and commercial milestone payments up to approximately $2 billion," according to a statement.
Merck shares were marked 1.12% lower at €110.15 each in the opening 30 minutes of trading in Frankfurt, trimming the year-to-date gain to around 11%, largely in-line with the Stoxx Europe 600 Health Care Index.