Germany-based pharma giant Merck (NYSE: MRK) is bracing itself for a sales decline this year and was just hit by some bad news: The company expects its COVID-19 treatment Lagevrio sales to be less than 20% of what they were in 2022. But Merck's pipeline strength suggests that investors might want to think twice before dumping their shares in the pharmaceutical company.

Let's see why.

Merck reported worldwide sales of $59.3 billion in 2022, up 22%, and earnings per share (EPS) under generally accepted accounting principles (GAAP) of $5.71, up 17.5% from $4.86 in 2021. Considerable credit for this expansion goes to Merck's COVID-19 treatment, Lagevrio, for which the company released some bad news on Tuesday (Feb. 21). The drug, also known by the generic name molnupiravir, did not reach the primary endpoint (goal) in a phase 3 clinical trial among participants who did not have COVID-19 but lived with someone else who was recently diagnosed with it. That is, the drug didn't reduce the risk of the participants catching the pandemic disease, at least not in a statistically significant way.

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Source Fool.com