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Merck Swings to Loss as Cyberattack Hurts Sales

Sales of Merck’s Keytruda increased to $1.05 billion from $356 million in the quarter.

The cyberattack on major companies around the globe in late June, dubbed Petya by computer-security experts, locked digital files and demanded payment for them to be returned at more than 100 companies and institutions.

Merck Chief Executive Kenneth Frazier on Friday called it “an isolated but meaningful cyber incident.”

Another Petya-related hit to Merck sales: the company said it borrowed doses of its Gardasil 9 vaccine from a U.S. Centers for Disease Control and Prevention pediatric vaccine stockpile to fulfill customer orders, because the cyberattack caused a temporary production shutdown, and there was higher-than-expected demand. That cut third-quarter sales by $240 million, but Merck will recognize that revenue as it replenishes the stockpile, expected in 2018.

Gardasil 9 protects against the human papillomavirus, or HPV, which can cause cervical cancer and other types of cancer. The CDC recommends routine HPV vaccination of adolescents.

The CDC maintains a pediatric vaccine stockpile to offset supply challenges, according to its website. A CDC spokesperson couldn’t immediately be reached for comment.

Overall, sales fell 2% to $10.33 billion. Still, the company saw big results from its Keytruda cancer drug, which got an important Food and Drug Administration approval in May. Sales of the drug increased to $1.05 billion from $356 million.

The company posted a loss of $56 million, or 2 cents a share, compared with a profit of $2.18 billion, or 78 cents a share, in the same quarter last year. On an adjusted basis, excluding certain items, earnings per share rose to $1.11 from $1.07.

Analysts polled by Thomson Reuters had expected revenue of $10.54 billion and adjusted earnings per share of $1.03.

Shares fell 4.7% to $59.06 in late-morning trading Friday.

Write to Austen Hufford at austen.hufford@wsj.com and Peter Loftus at peter.loftus@wsj.com


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