Will Merck & Co.'s 1Q16 Earnings Match Analysts' Optimism?

(Continued from Prior Part)

Keytruda

Keytruda, a prescription medicine classified under Merck and Co.’s (MRK) immuno-oncology franchise, is used to treat non-small cell lung cancer as well as melanoma, a type of skin cancer.

Keytruda was launched by Merck in 4Q14, and its global sales reported for 4Q15 were ~$214 million, a 35% rise over 3Q15. Keytruda is expected to report a 15% rise in revenue in 1Q16. Further, Keytruda is expected to see noticeable growth in 2Q16 and throughout 2016.

Uses

Keytruda is used for the treatment of melanoma when it has spread or cannot be removed by surgery (advanced melanoma), when the medicine ipilimumab hasn’t worked or is no longer working, and when the tumor has an abnormal BRAF gene and BRAF inhibitors haven’t worked.

Keytruda is also used for non-small cell lung cancer when the cancer has spread and tests positive for PD-L1 (programmed death-ligand 1), when chemotherapy containing platinum hasn’t worked, and when the tumor has an abnormal EGFR or ALK gene, but EGFR or ALK inhibitors haven’t worked.

Overall, Keytruda’s clinical development program studies more than 30 tumor types in more than 160 clinical trials, which include over 80 combinations of Keytruda with other cancer treatments.

Geographical reach

In the United States, Keytruda has a ~70% anti-PD-1 patient share in melanoma. It’s the number one therapy for melanoma in the United States across all classes of treatment.

Outside US markets, Keytruda has launched in around 40 markets, including the European Union. Keytruda has been approved for advanced first-line and second-line melanoma treatment in the European Union.

Some of the EGFR inhibitors used to treat various types of cancer include Iressa from AstraZeneca (AZN), Tarceva from Astellas Pharma (ALPMY), Tykerb from Novartis (NVS), Erbitux from Eli Lilly (LLY), and Vectibix from Amgen (AMGN).

Investors can consider ETFs such as the iShares US Healthcare ETF (IYH), which holds 5.3% of its total assets in Merck, or the Market Vectors Pharmaceutical ETF (PPH), which holds ~5.4% of its total assets in Merck.

Continue to Next Part

Browse this series on Market Realist:

• Part 1 - Merck & Co.’s 1Q16 Estimates Show Revenue Growth

• Part 2 - Will Merck & Co.’s Revenue Recover Growth in 1Q16?

• Part 3 - Which Products Will Contribute to MRK’s Earnings Growth in 1Q16?