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Merck cyber attack halted manufacturing, will hurt profits
[BENGALURU] Merck & Co said the international cyber attack it suffered in June halted some of its manufacturing and other operations and cut its profit forecast for the year.
The drugmaker said, while announcing its second quarter-earnings on Friday, that it is in the process of restoring its manufacturing operations and does not yet know the magnitude of the impact of the disruption.
Merck expects to have temporary delays fulfilling orders for some of its drugs, but said it was confident in the continuous supply of key products, including cancer drug Keytruda, diabetes drug Januvia and hepatitis C drug Zepatier.
"Full recovery from the cyber-attack will take some time, but we are making steady progress," chief executive Ken Frazier said on the company's conference call.
The company said on the conference call that its full-year forecast for earnings excluding one-time items, which it held steady, would have been higher if not for the attack, but would not specify how big the effect was.
Merck's quarterly profit blew past analysts' estimates as demand surged for top selling cancer drug Keytruda and the company reined in expenses.
Sales of Keytruda, which works by taking the brakes off the immune system, nearly tripled to US$881 million in the second quarter, handily beating consensus estimates of US$777 million, according to Barclays.
First approved in 2014 to treat melanoma, Keytruda has since won approvals to treat lung as well as head and neck cancer and is being tested against other cancers.
The drugmaker's position as the market leader in previously untreated lung cancer was bolstered on Thursday after AstraZeneca said its combination of two injectable immunotherapies failed to help patients as hoped in a closely-watched advanced lung cancer trial.
Merck also reduced its full-year net profit forecast to between US$1.60 per share and US$1.72 per share due to expenses from a collaboration with AstraZeneca announced Thursday.
The company will pay up to US$8.5 billion to work together on drug combinations using the British drugmaker's cancer drug, Lynparza.
Net income rose to US$1.95 billion, or 71 US cents per share, in the second quarter, from US$1.21 billion, or 43 US cents per share, a year earlier.
Excluding items, Merck earned US$1.01 per share, above analysts' average estimate of 87 US cents, according to Thomson Reuters.
Sales inched up about one per cent to US$9.93 billion. Analysts, on average, had expected US$9.75 billion.