On 29th July 2021, one of the world’s largest pharmaceutical companies, Merck, announced its second-quarter 2021 earnings results. Merck holds the distinction of being the oldest major pharmaceutical company in the world, with its history going back more than 3.5 centuries. Merck wasn’t one of the “star names” when it comes to COVID treatments. That honor went to companies like Pfizer, Moderna, and Regeneron. However, Merck recently announced that it is coming out with an oral COVID pill that will act as a therapy for the treatment of the virus. If you are looking for the best health care stock, then you have your work cut out. Health care is a broad area where you have pharmaceutical companies, hospitals, generic drug makers, health insurance companies, healthcare REITs, etc. So, picking the right area and then focusing on the leaders in that segment would be a good starting point.
Merck’s Second-Quarter 2021 Earnings Release
In the second quarter of 2021, Merck’s revenue was $11.4 billion as compared to $9.3 billion in Q22020, a growth of 22% year-on-year. However, the GAAP earnings per share went down from $0.92 in Q22020 to $0.48 in Q22021, a fall of 48%. One of Merck’s significant products is Keytruda. It is the largest revenue-generating product in the company’s oncology portfolio. It delivered a strong 23% growth in sales year on year. The drug’s sales in Q22020 were $3.38 billion, while in Q22021, it jumped to $4.17 billion. In terms of the guidance, Merck provided a projection of GAAP EPS for the full year in the range of $4.24 to $4.34. The company management also revealed that it remains interested in potential M&A deals that can lead to easy integration into the larger organization. Merck continues to be among the list of top health care stock at this moment.
Merck is known as MSD outside the US. It is the trade name of the company. Merck has a business unit in electronics as well, along with life sciences and healthcare. Certain key risks facing the business are the way the pandemic plays out and any changes in the health care policy that may be brought forward by the Biden administration, especially with respect to pricing.