Merck on Thursday reported third-quarter earnings and revenue that topped estimates because it saw strong demand for its cancer immunotherapy Keytruda.
The drugmaker also narrowed its full-year profit outlook to reflect lower estimated tariff costs, amongst other aspects.
Sales of Keytruda topped $8 billion for the primary time in 1 / 4, rising 10% from the identical period a 12 months ago. Revenue from the drug of $8.14 billion got here in only slightly below the $8.24 billion analysts were expecting, in line with StreetAccount estimates.Â
The outcomes come as Merck slashes $3 billion in costs by the top of 2027, and prepares to offset revenue losses from the upcoming patent expiration of Keytruda in 2028.
The pharmaceutical giant now expects its 2025 adjusted earnings to are available between $8.93 and $8.98 per share. That compares with its previous outlook of $8.87 to $8.97.
Merck said that reflects several latest items, including “lower estimated costs related to the impact of tariffs.” In the course of the previous two quarters, the corporate included a $200 million estimated hit from tariffs that President Donald Trump has implemented so far, but not his planned pharmaceutical-specific levies. Merck didn’t disclose a brand new estimate for the fee of existing tariffs.Â
Merck said the guidance also reflects a profit from an amended take care of AstraZeneca related to a pill for a selected genetic disorder, partially offset by costs tied to the corporate’s now-completed acquisition of Verona Pharma.Â
Merck expects revenue for the 12 months to are available between $64.5 billion and $65 billion, narrowed on each ends from its previous guidance of $64.3 billion to $65.3 billion.Â
Here’s what Merck reported for the third quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:Â
- Earnings per share: $2.58 adjusted vs. $2.35 expected
- Revenue: $17.28 billion vs. $16.96 billion expected
The corporate posted net income of $5.79 billion, or $2.32 per share, for the quarter. That compares with net income of $3.16 billion, or $1.24 per share, for the year-earlier period.Â
Excluding acquisition and restructuring costs, Merck earned $2.58 per share for the third quarter.
Merck raked in $17.28 billion in revenue for the quarter, up 4% from the identical period a 12 months ago.
Merck continued to see trouble with China sales of Gardasil, a vaccine that stops cancer from HPV, essentially the most common sexually transmitted infection within the U.S.
In February, Merck announced a choice to halt shipments of Gardasil into China starting that month. In July, CFO Caroline Litchfield said the corporate is not going to resume shipments to China through no less than the top of 2025, noting that inventories remain high and demand continues to be soft.
Gardasil generated sales of $1.75 billion for the quarter, down 24% from the identical period a 12 months ago resulting from lower demand in China. Still, that was in step with what analysts were expecting, in line with StreetAccount.
In the course of the earnings call, investors will likely look for extra updates on Gardasil’s presence in China and any details from Merck on potential drug pricing deals with Trump as a part of his controversial “most favored nation” policy. Trump has to date inked agreements with Pfizer, AstraZeneca and EMD Serono, the biggest fertility drug manufacturer on this planet, that aim to make their medicines easier for Americans to access.
Pharmaceutical, animal health sales
Merck’s pharmaceutical unit, which develops a wide selection of medicine, booked $15.61 billion in revenue in the course of the third quarter. That is up 4% from the identical period a 12 months earlier.
Keytruda recorded $8.14 billion in revenue in the course of the quarter, up 10% from the year-earlier period.
That increase was driven by higher uptake of the drug for earlier-stage cancers and powerful demand for the treatment for metastatic cancers, which spread to other parts of the body, the corporate said.
Meanwhile, Merck’s newer drug Winrevair, which is used to treat a rare, deadly lung condition, recorded $360 million in sales for the quarter. Analysts had expected the drug to usher in $413 million, in line with StreetAccount estimates.Â
Winrevair’s growth largely reflects higher uptake within the U.S. But it surely was partially offset by the timing of distributor purchases of the drug and lower net pricing within the country, mainly resulting from changes to Medicare prescription drug plans.Â
Merck’s animal health division, which develops vaccines and medicines for dogs, cats and cattle, posted nearly $1.62 billion in sales, up 16% from the identical period a 12 months prior. The corporate said that mainly reflects higher demand for livestock products.
