Merck (MRK) earnings Q4 2024

Merck on Tuesday issued full-year 2025 revenue guidance that fell wanting Wall Street’s expectations, as the corporate temporarily paused shipments of a key vaccine into China. 

Shares of Merck fell greater than 7% in premarket trading Tuesday.

The pharmaceutical giant anticipates 2025 sales of $64.1 billion to $65.6 billion, lower than the $67.31 billion that analysts surveyed by LSEG had expected. In a release, the corporate said that sales range reflects a call to halt shipments of Gardasil into China starting in February through and going through a minimum of mid-2025. 

Gardasil is a vaccine that stops cancer from HPV, essentially the most common sexually transmitted infection within the U.S. Investors have been unsettled over the past yr by trouble with sales of that blockbuster shot in China, because the country makes up the vast majority of the product’s international revenue. 

The corporate believes the pause will allow for a “more rapid reduction of excess inventory” and help support the financial position of its partner in China, a spokesperson said in an email. Merck expects 2% to 4% growth in Gardasil sales, with no further shipments of Gardasil to China on the low end and lower than $1 billion in revenue from the country on the high end, the spokesperson said.

Sales of the shot will likely be critical to Merck’s efforts to offset losses from its top-selling cancer therapy Keytruda, which is able to lose exclusivity in 2028. Merck is hoping that Gardasil’s expanded approval for men ages 9 to 26 in China will eventually help boost uptake of the shot.

The Merck spokesperson said “it’s important to notice that GARDASIL market dynamics in China don’t in any way diminish the arrogance Merck has in its business.”

Merck expects full-year adjusted earnings of $8.88 to $9.03 per share, which is mostly in step with what analysts were expecting. The outlook reflects a charge of roughly 9 cents per share related to Merck’s license agreement with privately held drugmaker LaNoVa. 

Sales of Keytruda, other oncology medicines and the corporate’s recently launched cardiovascular treatment helped Merck beat expectations for the fourth quarter of 2024. 

Here’s what Merck reported for the fourth quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG: 

• Earnings per share: $1.72 adjusted vs. $1.62 expected
• Revenue: $15.62 billion vs. $15.49 billion expected

The corporate posted a net income of $3.74 billion, or $1.48 per share, for the quarter. That compares with a net lack of $1.23 billion, or 48 cents per share, throughout the year-earlier period. 

Excluding acquisition and restructuring costs, Merck earned $1.72 per share for the fourth quarter. Each adjusted and non-adjusted earnings reflect a charge of 23 cents per share related to Merck’s recent licensing agreements, including a deal to develop an experimental obesity pill from a Chinese drugmaker. 

Merck raked in $15.62 billion in revenue for the quarter, up 7% from the identical period a yr ago.

Merck’s pharmaceutical unit, which develops a wide selection of medicine, booked $14.04 billion in revenue throughout the fourth quarter. That is up 7% from the identical period a yr ago.

Keytruda recorded $7.84 billion in revenue throughout the quarter, up 19% from the year-earlier period. Analysts had expected sales of $7.63 billion, in accordance with StreetAccount estimates. 

That increase was driven by higher uptake of Keytruda for earlier-stage cancers and powerful demand for the drug for metastatic cancers, which spread to other parts of the body.

Gardasil raked in $1.55 billion in sales, down 17% from the fourth quarter of 2023. That is barely below the $1.58 billion that analysts were expecting, in accordance with StreetAccount estimates. 

Merck’s Type 2 diabetes treatment, Januvia, also saw sales fall to $487 million throughout the quarter, down 38% from the identical period a yr ago. The corporate said the decline was primarily as a consequence of lower pricing within the U.S., supply constraints in China and ongoing competition from cheaper generic drugs in international markets.

That got here below analysts’ estimate of $500 million for the period, in accordance with StreetAccount. 

Januvia is one in all 10 drugs that was subject to Medicare drug price negotiations, a policy under the Inflation Reduction Act that goals to make costly medications cheaper for older Americans. Latest negotiated prices for that first round of medicine go into effect in 2026.