Merck & Co on Thursday forecast a sharp decline in sales of its COVID-19 antiviral pill as the pandemic eases globally.
The company estimated sales of molnupiravir, which is sold under the brand Lagevrio, to fall to about $1 billion this year from $5.68 billion in 2022.
The lower forecast for the COVID drug is the latest signal that a boost to global drugmakers from the pandemic is fading.
Roche also warned on Thursday that profits will decline in 2023 due to falling demand for its COVID-19 therapy and diagnostics kits.
Merck also forecast 2023 earnings below analysts’ estimates on a tax hit from a recent acquisition.
The company said it expects adjusted earnings of $6.80 to $6.95 per share, lower than analysts’ average estimate of $7.36.
The U.S. drugmaker’s shares were down 3% in premarket trade.
Revenue is projected to be $57.2 billion to $58.7 billion, compared with expectations of $58.1 billion.
The earnings forecast was hit by taxes that Merck will have to pay on the $1.35 billion acquisition of cancer drug developer Imago BioSciences, the company said.
The company, however, reported higher-than-expected fourth-quarter earnings on strong sales of its COVID-19 pill in Asia.
Sales in the quarter were $13.83 billion, up from $13.52 billion a year earlier. Analysts had expected sales of $13.67 billion, according to Refinitiv data.
Excluding items, Merck earned $1.62 per share, exceeding Wall Street expectations of $1.54, according to Refinitiv.
Sales of molnupiravir were $825 million in the quarter, compared with estimates of around $358 million.
Merck Chief Executive Rob Davis said the pandemic wave that moved through Asia in the fourth quarter drove sales of molnupiravir, particularly in Japan, South Korea and other areas of the Asia Pacific region.
“That really was the strength, and we’ve seen very good demand for Lagevrio in those markets,” Davis said in an interview. “In Japan, we are a market leader.”
The drug was not approved for use in China until Dec. 30, so sales there were not a factor in the fourth quarter.
Sales of Merck’s blockbuster cancer immunotherapy, Keytruda, rose 19% to $5.45 billion, largely in line with estimates.
The human papillomavirus vaccine Gardasil had sales of $1.47 billion, slightly underperforming expectations.