KENILWORTH, N.J.--(BUSINESS WIRE)--Merck (NYSE:MRK), known as MSD outside the United States and Canada, today announced financial results for the second quarter of 2016.

“Our results this quarter reflect our strategic focus on key launches, including KEYTRUDA and ZEPATIER, as well as our priority inline programs,” said Kenneth C. Frazier, chairman and chief executive officer, Merck. “We remain committed to advancing our pipeline, delivering a balanced and differentiated portfolio, and achieving long-term, sustainable growth.”

Worldwide sales were $9.8 billion for the second quarter of 2016, an increase of 1 percent compared with the second quarter of 2015, including a 2 percent negative impact from foreign exchange.

GAAP (generally accepted accounting principles) earnings per share (EPS) were $0.43 for the second quarter. Non-GAAP EPS of $0.93 for the second quarter excludes acquisition- and divestiture-related costs and restructuring costs.

Pipeline Highlights

In the second quarter of 2016, the company advanced its late-stage pipeline in multiple priority areas and executed on key launches, including KEYTRUDA (pembrolizumab), an anti-PD-1 therapy for the treatment of metastatic NSCLC in previously treated patients whose tumors express PD-L1, as well as advanced melanoma; and ZEPATIER (elbasvir and grazoprevir), a once-daily, fixed-dose combination tablet for the treatment of adult patients with chronic hepatitis C virus (HCV) genotype (GT) 1 or GT4 infection, with or without ribavirin.

• The company advanced its clinical development program for KEYTRUDA.
  • The company announced topline results from the KEYNOTE-024 trial investigating the use of KEYTRUDA in patients with previously untreated advanced NSCLC whose tumors expressed high levels of PD-L1 (tumor proportion score of 50 percent or more).
    • In this study, KEYTRUDA was superior compared to chemotherapy for the primary endpoint of progression-free survival and the secondary endpoint of overall survival.
    • Based on these results, an independent Data Monitoring Committee recommended that the trial be stopped and that patients receiving chemotherapy in KEYNOTE-024 be offered the opportunity to receive KEYTRUDA.
  • The U.S. Food and Drug Administration (FDA) accepted for review a supplemental Biologics License Application for KEYTRUDA for the treatment of patients with recurrent or metastatic head and neck squamous cell carcinoma with disease progression on or after platinum-containing chemotherapy. The FDA granted Priority Review with a PDUFA action date of Aug. 9, 2016.
  • The Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) adopteda positive opinion recommending approval of KEYTRUDAfor the treatment of locally advanced or metastatic NSCLC in adults whose tumors express PD-L1 and who have received at least one prior chemotherapy regimen.
  • At the 52nd Annual Meeting of the American Society of Clinical Oncology in June, data were presented evaluating the use of KEYTRUDA as a monotherapy and in combination with other therapies in more than 15 different cancers, including melanoma, NSCLC, head and neck cancer, classical Hodgkin lymphoma, multiple myeloma, colorectal cancer and esophageal cancer. Data evaluating KEYTRUDA in new tumor types were presented for the first time in cervical, endometrial, pancreatic, salivary and thyroid cancers.
  • The KEYTRUDA research program includes more than 300 clinical trials evaluating KEYTRUDA across more than 30 tumor types. To date, clinical activity has been shown in more than 20 tumor types.
• Last week, the European Commission approved ZEPATIER for the treatment of chronic HCV in adult patients, allowing marketing of ZEPATIER in all 28 European Union (EU) member states. The company continues to work to supply the EU market, with product launches estimated to begin between the fourth quarter of 2016 and the first quarter of 2017. Product launches are expected to continue across the EU through 2017.
• At the 76th Scientific Sessions of the American Diabetes Association in June, Merck and Pfizer announced that two pivotal Phase 3 studies of ertugliflozin, an investigational oral SGLT-2 inhibitor for the treatment of patients with type 2 diabetes, met their primary endpoints, showing significant reductions in A1C (a measure of average blood glucose). The companies continue to expect to submit New Drug Applications to the FDA for ertugliflozin as a monotherapy and two fixed-dose combination tablets (ertugliflozin plus JANUVIA [sitagliptin], and ertugliflozin plus metformin) by the end of 2016.

Business Development Highlights

Business development remains a critical component of Merck’s strategy, and the company is actively engaged in seeking external opportunities to complement and strengthen its pipeline and portfolio. The company recently engaged in the following scientific collaborations and acquisitions:

• Earlier this week, the company completed its acquisition of Afferent Pharmaceuticals, a leader in the development of investigational therapeutic candidates for the treatment of common, poorly managed, neurogenic conditions, such as chronic cough.
• The company announced a new collaboration with Moderna Therapeutics to develop and commercialize personalized cancer vaccines, combining KEYTRUDA and Moderna’s messenger-RNA technology.
• Merck Animal Health announced it will acquire a controlling interest in Vallée S.A., a privately held producer of animal health products in Brazil with a portfolio of more than 100 products for livestock, horses and companion animals.

Pharmaceutical Revenue

Second-quarter pharmaceutical sales increased 2 percent to $8.7 billion, reflecting higher sales in oncology, hospital acute care, the cardiovascular franchise and vaccines.

Growth in oncology was driven by higher sales of KEYTRUDA as the company continues to launch the product with new indications globally.

Growth in hospital acute care reflects higher sales of CUBICIN (daptomycin for injection), an I.V. antibiotic, partially due to price increases in the United States, and the U.S. launch of BRIDION (sugammadex) Injection 100 mg/mL, an agent for the reversal of neuromuscular blockade induced by rocuronium bromide or vecuronium bromide in adults undergoing surgery. In June 2016, the company lost U.S. patent protection for CUBICIN, and, going forward, the company anticipates a significant decline in CUBICIN sales.

Higher sales in the cardiovascular portfolio were primarily driven by an increase in sales of ZETIA (ezetimibe), a medicine for lowering LDL cholesterol, largely due to price increases in the United States, and ADEMPAS (riociguat), a medicine for treating pulmonary arterial hypertension and chronic thromboembolic pulmonary hypertension, which the company is now promoting and distributing in Europe.

Growth in vaccines resulted largely from higher sales of pediatric vaccines, partially offset by lower sales in the franchise of GARDASIL 9 (Human Papillomavirus 9-valent Vaccine, Recombinant) and GARDASIL [Human Papillomavirus Quadrivalent (Types 6, 11, 16, and 18) Vaccine, Recombinant], vaccines to prevent cancers and other diseases caused by HPV, due to the timing of public sector purchases.

Pharmaceutical sales growth also reflects the launch of ZEPATIER, which had sales of $112 million in the quarter.

Second-quarter pharmaceutical sales reflect a decline in REMICADE (infliximab), a treatment for inflammatory diseases, due to the impact of biosimilar competition in the company’s marketing territories in Europe. Pharmaceutical sales also reflect a decrease in sales of NASONEX (mometasone furoate monohydrate), an inhaled nasal corticosteroid for the treatment of nasal allergy symptoms, due to loss of exclusivity in the United States.

Animal Health Revenue

Animal Health sales totaled $898 million for the second quarter of 2016, an increase of 7 percent compared with the second quarter of 2015, including a 3 percent negative impact from foreign exchange. Excluding the impact of exchange, sales across all species grew, particularly in products for companion animals, led by BRAVECTO (fluralaner), a chewable tablet that kills fleas and ticks in dogs for up to 12 weeks.

In the second quarter, the company received marketing approval from the EMA for BRAVECTO Spot-On Solution for cats and dogs; last week, the company received approval in the United States to market the product under the tradename BRAVECTO Topical (fluralaner topical solution) for cats and dogs.

About Merck

For 125 years, Merck has been a global health care leader working to help the world be well. Merck is known as MSD outside the United States and Canada. Through our prescription medicines, vaccines, biologic therapies and animal health products, we work with customers and operate in more than 140 countries to deliver innovative health solutions. We also demonstrate our commitment to increasing access to health care through far-reaching policies, programs and partnerships. For more information, visit www.merck.com and connect with us on Twitter, Facebook, YouTube andLinkedIn. You can also follow our Twitter conversation at $MRK.