- Fourth-Quarter Worldwide Sales Were $15.6 Billion, an Increase
of 7% From Fourth Quarter 2023; Excluding the Impact of Foreign
Exchange, Growth Was 9%
- Fourth-Quarter GAAP EPS Was $1.48; Non-GAAP EPS Was $1.72; GAAP
and Non-GAAP EPS Include a Charge of $0.23 per Share Related to
Certain Business Development Transactions
- Full-Year Worldwide Sales Were $64.2 Billion, an Increase of 7%
From Full Year 2023; Excluding the Impact of Foreign Exchange,
Growth Was 10%
- KEYTRUDA Sales Grew 18% to $29.5 Billion; Excluding the Impact
of Foreign Exchange, Sales Grew 22%
- WINREVAIR Sales Were $419 Million
- Animal Health Sales Grew 4% to $5.9 Billion; Excluding the
Impact of Foreign Exchange, Sales Grew 8%
- GARDASIL/GARDASIL 9 Sales Declined 3% to $8.6 Billion;
Excluding the Impact of Foreign Exchange, Sales Declined 2%
- Full-Year 2024 GAAP EPS Was $6.74; Non-GAAP EPS Was $7.65; GAAP
and Non-GAAP EPS Include a Net Charge of $1.28 per Share Related to
Certain Business Development Transactions
- In the Fourth Quarter:
- Announced Positive Topline Results From Pivotal Phase 3 Trial
of Subcutaneous Pembrolizumab With Berahyaluronidase Alfa
- Received FDA Acceptance of Biologics License Application for
Clesrovimab, an Investigational Long-Acting Monoclonal Antibody
Designed to Protect Infants From RSV Disease During Their First RSV
Season
- Augmented Diverse Pipeline Through Exclusive Global Licenses
With LaNova for MK-2010, an Investigational Anti-PD-1/VEGF
Bispecific Antibody, and With Hansoh for MK-4082, an
Investigational Oral GLP-1 Receptor Agonist
- Received Approval of GARDASIL for Males in China, in January
2025
- Full-Year 2025 Financial Outlook
- Anticipates Worldwide Sales To Be Between $64.1 Billion and
$65.6 Billion
- Expects Non-GAAP EPS To Be Between $8.88 and $9.03; Outlook
Reflects a One-Time Charge of Approximately $0.09 per Share Related
to an Anticipated Milestone Payment to LaNova
Merck (NYSE: MRK), known as MSD outside the United States and
Canada, today announced financial results for the fourth quarter of
2024.
“We delivered strong growth in 2024, reflecting demand for our
innovative portfolio, including for KEYTRUDA, which continues to
benefit more patients with cancer globally, the successful launch
of WINREVAIR and strong performance of our Animal Health business,”
said Robert M. Davis, chairman and chief executive officer, Merck.
"We’re continuing to progress our pipeline, advance key clinical
programs and augment our pipeline through promising business
development. Our business remains well positioned thanks to the
dedication of our talented global team, and I am more confident
than ever in our long-term growth potential.”
Financial Summary
$ in millions, except EPS amounts
Fourth Quarter
Year Ended
2024
2023
Change
Change Ex-Exchange
Dec. 31, 2024
Dec. 31, 2023
Change
Change Ex-Exchange
Sales
$15,624
$14,630
7%
9%
$64,168
$60,115
7%
10%
GAAP net income (loss)1
3,743
(1,226)
N/M
N/M
17,117
365
N/M
N/M
Non-GAAP net income that excludes certain
items1,2*
4,372
66
N/M
N/M
19,444
3,837
N/M
N/M
GAAP EPS
1.48
(0.48)
N/M
N/M
6.74
0.14
N/M
N/M
Non-GAAP EPS that excludes certain
items2*
1.72
0.03
N/M
N/M
7.65
1.51
N/M
N/M
*Refer to table on page 9.
N/M - not meaningful
Generally Accepted Accounting Principles (GAAP) earnings per
share (EPS) assuming dilution was $1.48 for the fourth quarter and
$6.74 for the full year of 2024. Non-GAAP EPS was $1.72 for the
fourth quarter and $7.65 for the full year of 2024. GAAP and
non-GAAP EPS in the fourth quarter of 2024 include a charge of
$0.23 per share related to the execution of licensing agreements
with LaNova Medicines Ltd. (LaNova) and Hansoh Pharma (Hansoh).
GAAP loss per share and non-GAAP EPS in the fourth quarter of 2023
include a charge of $1.69 per share related to a collaboration with
Daiichi Sankyo. GAAP and non-GAAP EPS for the full years of 2024
and 2023 include charges of $1.28 and $6.21 per share,
respectively, related to certain collaborations, licensing
agreements and asset acquisitions.
Non-GAAP EPS excludes acquisition- and divestiture-related
costs, costs related to restructuring programs, and income and
losses from investments in equity securities. Non-GAAP EPS in the
fourth quarter and full year of 2024 also exclude a benefit due to
a reduction in reserves for unrecognized income tax benefits
resulting from the expiration of the statute of limitations for
assessments related to certain federal tax return years. Non-GAAP
EPS for the full year of 2023 also excludes a charge related to
settlements with certain plaintiffs in the Zetia antitrust
litigation.
Fourth-Quarter Sales
Performance
The following table reflects sales of the company’s top products
and significant performance drivers.
Fourth Quarter
$ in millions
2024
2023
Change
Change Ex-Exchange
Commentary
Total Sales
$15,624
$14,630
7%
9%
The negative impact of foreign exchange
was primarily due to devaluation of Argentine peso, which was
largely offset by inflation-related price increases, consistent
with practice in that market.
Pharmaceutical
14,042
13,141
7%
8%
Increase driven by growth in oncology and
cardiovascular, partially offset by declines in diabetes, vaccines,
immunology and virology.
KEYTRUDA
7,836
6,608
19%
21%
Growth driven by continued strong global
demand from metastatic indications, including increased uptake in
bladder and endometrial cancers, as well as increased global uptake
in earlier-stage indications, including triple-negative breast
cancer and non-small cell lung cancer (NSCLC). The negative impact
of foreign exchange was primarily due to devaluation of Argentine
peso, which was largely offset by inflation-related price
increases.
GARDASIL/GARDASIL 9
1,550
1,871
-17%
-18%
Decline primarily due to lower demand in
China, partially offset by higher demand in most international
regions, particularly in Japan.
PROQUAD, M-M-R II and VARIVAX
594
545
9%
9%
Growth primarily due to higher pricing in
the U.S. and higher tenders in certain international markets,
partially offset by lower demand in the U.S.
JANUVIA/JANUMET
487
787
-38%
-36%
Decline primarily due to lower pricing in
the U.S., as well as ongoing generic competition in many
international markets and supply constraints in China.
BRIDION
449
429
5%
5%
Growth primarily due to higher demand in
the U.S., partially offset by generic competition in certain
international markets, particularly in Japan and Europe.
Lynparza*
365
315
16%
18%
Growth primarily due to higher global
demand.
Lenvima*
255
226
13%
14%
Growth primarily due to timing of
shipments in certain international markets.
PREVYMIS
215
175
23%
23%
Growth primarily due to higher demand in
most markets, particularly in the U.S.
WINREVAIR
200
-
-
-
Represents continued uptake since
second-quarter launch in the U.S.
VAXNEUVANCE
161
176
-9%
-9%
Decline primarily driven by lower demand
in the U.S. due to competition, partially offset by continued
uptake from launches in Europe and the Asia Pacific region.
WELIREG
160
72
122%
123%
Growth primarily driven by higher demand
in the U.S., largely attributable to ongoing uptake of a new
indication.
SIMPONI
-
171
N/M
N/M
Marketing rights in former Merck
territories reverted to Johnson & Johnson on Oct. 1, 2024.
Animal Health
1,397
1,278
9%
13%
Growth primarily driven by higher pricing
for both Livestock and Companion Animal product portfolios, as well
as sales related to July 2024 acquisition of Elanco aqua business
and higher demand for Livestock products. Approximately 3
percentage points of the negative impact of foreign exchange were
due to devaluation of Argentine peso, which were largely offset by
inflation-related price increases.
Livestock
889
808
10%
14%
Growth primarily driven by higher demand
for poultry products, sales related to acquisition of Elanco aqua
business, as well as higher pricing across the portfolio.
Companion Animal
508
470
8%
10%
Growth primarily driven by higher pricing
across the product portfolio. Sales of BRAVECTO were $209 million
and $197 million in current and prior year quarters, respectively,
which represented growth of 6%, or 10% excluding impact of foreign
exchange.
Other Revenues**
185
211
-13%
3%
Decline primarily due to impact of
revenue-hedging activities and lower revenues from third-party
manufacturing arrangements, partially offset by payments received
for out-licensing arrangements and higher royalty income.
*Alliance revenue for this
product represents Merck’s share of profits, which are product
sales net of cost of sales and commercialization costs.
**Other revenues are comprised
primarily of revenues from third-party manufacturing arrangements
and miscellaneous corporate revenues, including revenue-hedging
activities.
N/M – not meaningful
Full-Year Sales
Performance
The following table reflects sales of the company’s top products
and significant performance drivers.
Year Ended
$ in millions
Dec. 31, 2024
Dec. 31, 2023
Change
Change Ex- Exchange
Total Sales
$64,168
$60,115
7%
10%
Pharmaceutical
57,400
53,583
7%
10%
KEYTRUDA
29,482
25,011
18%
22%
GARDASIL/GARDASIL 9
8,583
8,886
-3%
-2%
PROQUAD, M-M-R II and VARIVAX
2,485
2,368
5%
5%
JANUVIA/JANUMET
2,268
3,366
-33%
-29%
BRIDION
1,764
1,842
-4%
-3%
Lynparza*
1,311
1,199
9%
11%
Lenvima*
1,010
960
5%
6%
LAGEVRIO
964
1,428
-33%
-28%
VAXNEUVANCE
808
665
22%
23%
PREVYMIS
785
605
30%
33%
ROTATEQ
711
769
-8%
-7%
SIMPONI**
543
710
-24%
-23%
WELIREG
509
218
133%
133%
WINREVAIR
419
-
-
-
Animal Health
5,877
5,625
4%
8%
Livestock
3,462
3,337
4%
9%
Companion Animal
2,415
2,288
6%
7%
Other Revenues***
891
907
-2%
4%
*Alliance revenue for this
product represents Merck’s share of profits, which are product
sales net of cost of sales and commercialization costs.
**Marketing rights in former
Merck territories reverted to Johnson & Johnson on Oct. 1,
2024.
***Other revenues are comprised
primarily of revenues from third-party manufacturing arrangements
and miscellaneous corporate revenues, including revenue-hedging
activities.
Full-year 2024 pharmaceutical sales grew 7% to $57.4 billion.
Excluding the unfavorable impact of foreign exchange,
pharmaceutical sales grew 10%. Approximately 2 percentage points of
the negative impact of foreign exchange were due to devaluation of
the Argentine peso, which were largely offset by inflation-related
price increases, consistent with practice in that market.
Pharmaceutical sales growth was primarily driven by higher sales in
oncology, particularly KEYTRUDA and WELIREG, as well as increased
alliance revenue from Reblozyl and Lynparza. Higher sales in the
cardiovascular franchise, reflecting the successful launch of
WINREVAIR, as well as higher sales of certain hospital acute care
products, particularly PREVYMIS, also drove revenue growth in 2024.
Pharmaceutical sales growth in 2024 was partially offset by lower
sales of JANUVIA and JANUMET, primarily reflecting lower pricing in
the U.S. and generic competition in many international markets,
lower sales of the COVID-19 medication LAGEVRIO, lower sales of
GARDASIL/GARDASIL 9 and lower sales of SIMPONI and REMICADE,
reflecting the transfer of marketing rights in former Merck
territories back to Johnson & Johnson.
Full-year 2024 Animal Health sales grew 4% to $5.9 billion.
Excluding the unfavorable impact of foreign exchange, Animal Health
sales grew 8%. Approximately 2 percentage points of the negative
impact of foreign exchange were due to devaluation of the Argentine
peso, which were largely offset by inflation-related price
increases, consistent with practice in that market. Full-year sales
growth was primarily driven by higher pricing across both the
Companion Animal and Livestock product portfolios, and higher
demand for poultry and swine products, as well as sales related to
the acquisition of the Elanco aqua business. Sales of BRAVECTO were
$1.1 billion in 2024, which represented growth of 6%, or 8%
excluding the impact of foreign exchange.
Fourth-Quarter and Full-Year Expense,
EPS and Related Information
The table below presents selected expense information.
$ in millions
GAAP
Acquisition- and Divestiture-
Related Costs3
Restructuring Costs
(Income) Loss From Investments
in Equity Securities
Non- GAAP2
Fourth Quarter 2024
Cost of sales
$3,828
$701
$121
$-
$3,006
Selling, general and administrative
2,864
29
16
-
2,819
Research and development
4,585
12
(1)
-
4,574
Restructuring costs
51
-
51
-
-
Other (income) expense, net
126
(31)
-
152
5
Fourth Quarter 2023
Cost of sales
$3,911
$454
$117
$-
$3,340
Selling, general and administrative
2,804
24
29
-
2,751
Research and development
9,628
790
-
-
8,838
Restructuring costs
255
-
255
-
-
Other (income) expense, net
78
(35)
-
(61)
174
$ in millions
GAAP
Acquisition- and Divestiture-
Related Costs3
Restructuring Costs
(Income) Loss From Investments
in Equity Securities
Certain Other Items
Non- GAAP2
Year Ended December 31, 2024
Cost of sales
$15,193
$2,409
$495
$-
$ -
$12,289
Selling, general and administrative
10,816
117
83
-
-
10,616
Research and development
17,938
72
1
-
-
17,865
Restructuring costs
309
-
309
-
-
-
Other (income) expense, net
(24)
(79)
-
45
-
10
Year Ended December 31, 2023
Cost of sales
$16,126
$2,018
$211
$-
$-
$13,897
Selling, general and administrative
10,504
86
122
-
-
10,296
Research and development
30,531
819
1
-
-
29,711
Restructuring costs
599
-
599
-
-
-
Other (income) expense, net
466
(47)
-
(279)
573
219
GAAP Expense, EPS and Related
Information
Gross margin was 75.5% for the fourth quarter of 2024 compared
with 73.3% for the fourth quarter of 2023. The increase was
primarily due to the favorable effects of product mix (including
lower royalty rates related to KEYTRUDA and GARDASIL/GARDASIL 9)
and foreign exchange, partially offset by higher
manufacturing-related costs (including inventory write-offs) and
higher amortization of intangible assets. Gross margin was 76.3%
for the full year of 2024 compared with 73.2% for the full year of
2023. The increase was primarily due to the favorable effects of
product mix (including lower royalty rates related to KEYTRUDA and
GARDASIL/GARDASIL 9) and foreign exchange, partially offset by
higher amortization of intangible assets, as well as higher
restructuring costs (primarily reflecting asset impairment charges)
and higher manufacturing-related costs (including inventory
write-offs).
Selling, general and administrative (SG&A) expenses were
$2.9 billion in the fourth quarter of 2024, an increase of 2%
compared with the fourth quarter of 2023. The increase was
primarily due to higher promotional and selling costs, partially
offset by the favorable impact of foreign exchange and lower
restructuring costs. Full-year 2024 SG&A expenses were $10.8
billion, an increase of 3% compared with full-year 2023. The
increase was primarily due to higher administrative, promotional,
selling and acquisition-related costs, partially offset by the
favorable impact of foreign exchange and lower restructuring
costs.
Research and development (R&D) expenses were $4.6 billion in
the fourth quarter of 2024, a decrease of 52% compared with the
fourth quarter of 2023. R&D expenses were $17.9 billion for the
full year of 2024, a decrease of 41% compared with the full year of
2023. The declines in both the fourth quarter and full year of 2024
were primarily due to lower charges for business development
activity, lower intangible asset impairment charges, and the
favorable impact of foreign exchange, partially offset by increased
compensation and benefit costs and higher clinical development
spending.
Other (income) expense, net, was $126 million of expense in the
fourth quarter of 2024 compared with $78 million of expense in the
fourth quarter of 2023. The unfavorability was primarily due to net
losses from investments in equity securities compared with net
income from investments in equity securities in the prior year
quarter, partially offset by lower foreign exchange losses and
lower net interest expense. Other (income) expense, net, was $24
million of income in the full year of 2024 compared with $466
million of expense in the full year of 2023, primarily due to a
$572.5 million charge in 2023 related to settlements with certain
plaintiffs in the Zetia antitrust litigation. The favorability was
also due to $170 million of income related to the expansion of an
existing development and commercialization agreement with Daiichi
Sankyo, as well as lower foreign exchange losses in 2024. Other
(income) expense, net, in the full year of 2024 was unfavorably
affected by lower net income from investments in equity securities
and higher net interest expense compared with 2023.
The effective tax rates of 10.2% and 14.1% for the fourth
quarter and full year of 2024, respectively, include a 6.2
percentage point favorable impact and a 2.6 percentage point
favorable impact, respectively, due to a reduction in reserves for
unrecognized income tax benefits, resulting from the expiration of
the statute of limitations for assessments related to certain
federal tax return years.
GAAP EPS was $1.48 for the fourth quarter of 2024 compared with
a loss per share of $0.48 for the fourth quarter of 2023, primarily
driven by lower charges for business development transactions,
operational strength in the business, lower intangible asset
impairment charges, and a benefit from the expiration of the
statute of limitations for assessments related to the 2020 federal
tax return year. GAAP EPS was $6.74 for the full year of 2024
compared with EPS of $0.14 for the full year of 2023. The increase
was primarily driven by lower charges for business development
transactions, operational strength in the business, lower
intangible asset impairment charges, a benefit from the expiration
of the statute of limitations for the 2020 and 2019 federal tax
return years, and a charge in the prior year for settlements with
certain plaintiffs in the Zetia antitrust litigation, partially
offset by the unfavorable effect of foreign exchange.
Non-GAAP Expense, EPS and Related
Information
Non-GAAP gross margin was 80.8% for the fourth quarter of 2024
compared with 77.2% for the fourth quarter of 2023. Non-GAAP gross
margin was 80.8% for the full year of 2024 compared with 76.9% for
the full year of 2023. The non-GAAP gross margin improvements in
both the fourth quarter and full year of 2024 were primarily due to
the favorable effects of product mix (including lower royalty rates
related to KEYTRUDA and GARDASIL/GARDASIL 9) and foreign exchange,
partially offset by higher manufacturing-related costs (including
inventory write-offs).
Non-GAAP SG&A expenses were $2.8 billion in the fourth
quarter of 2024, an increase of 2% compared with the fourth quarter
of 2023. Non-GAAP SG&A expenses were $10.6 billion for the full
year of 2024, an increase of 3% compared with the full year of
2023. The increases were primarily due to higher promotional and
selling costs and, for the full year, higher administrative costs,
partially offset by the favorable impact of foreign exchange.
Non-GAAP R&D expenses were $4.6 billion in the fourth
quarter of 2024, a decrease of 48% compared with the fourth quarter
of 2023. Non-GAAP R&D expenses were $17.9 billion for the full
year of 2024, a decrease of 40% compared with the full year of
2023. The declines in both the fourth quarter and full year of 2024
were primarily due to lower charges for business development
activity and the favorable impact of foreign exchange, partially
offset by increased compensation and benefit costs and higher
clinical development spending.
Non-GAAP other (income) expense, net, was $5 million of expense
in the fourth quarter of 2024 compared with $174 million of expense
in the fourth quarter of 2023. The favorability was primarily due
to lower foreign exchange losses and lower net interest expense.
Non-GAAP other (income) expense, net, was $10 million of expense in
the full year of 2024 compared with $219 million of expense in the
full year of 2023. The favorability was primarily due to $170
million of income related to the expansion of an existing
development and commercialization agreement with Daiichi Sankyo, as
well as lower foreign exchange losses in 2024, partially offset by
higher net interest expense.
The non-GAAP effective tax rate was 16.2% for the fourth quarter
and 16.8% for the full year of 2024.
Non-GAAP EPS was $1.72 for the fourth quarter of 2024 compared
with $0.03 for the fourth quarter of 2023. Non-GAAP EPS was $7.65
for the full year of 2024 compared with EPS of $1.51 for the full
year of 2023. The increase in both periods was primarily driven by
lower charges for business development transactions and operational
strength in the business. The unfavorable effect of foreign
exchange partially offset the increase in the full year.
A reconciliation of GAAP to non-GAAP net income (loss) and
earnings (loss) per share is provided in the table that
follows.
Fourth Quarter
Year Ended
$ in millions, except EPS amounts
2024
2023
Dec. 31, 2024
Dec. 31, 2023
EPS
GAAP EPS
$1.48
$(0.48)
$6.74
$0.14
Difference
0.24
0.51
0.91
1.37
Non-GAAP EPS that excludes items listed
below2
$1.72
$0.03
$7.65
$1.51
Net Income (Loss)
GAAP net income (loss)1
$3,743
$(1,226)
$17,117
$365
Difference
629
1,292
2,327
3,472
Non-GAAP net income that excludes items
listed below1,2
$4,372
$66
$19,444
$3,837
Excluded Items:
Acquisition- and divestiture-related
costs3
$711
$1,233
$2,519
$2,876
Restructuring costs
187
401
888
933
Loss (income) from investments in equity
securities
152
(61)
45
(279)
Charge for Zetia antitrust litigation
settlements
-
-
-
573
Decrease to net income/increase to net
loss before taxes
1,050
1,573
3,452
4,103
Estimated income tax (benefit)
expense4
(421)
(281)
(1,125)
(631)
Decrease to net income/increase to net
loss
$629
$1,292
$2,327
$3,472
Pipeline and Portfolio
Highlights
Merck made important advancements in its broad, diverse
pipeline, meeting significant regulatory and clinical milestones
throughout the fourth quarter.
In oncology, Merck announced positive topline results from the
pivotal Phase 3 MK-3475A-D77 trial evaluating the noninferiority of
subcutaneous pembrolizumab and berahyaluronidase alfa, in
combination with chemotherapy, versus intravenous (IV) KEYTRUDA
administered with chemotherapy, for the first-line treatment of
adult patients with metastatic NSCLC. Subcutaneous pembrolizumab
and berahyaluronidase alfa has the potential to improve the patient
experience and increase access for patients and health care
providers compared to IV administration.
Merck presented new data across multiple hematologic
malignancies at the American Society of Hematology Annual Meeting
and Exposition in December 2024, including promising Phase 2 data
for its investigational antibody-drug conjugate zilovertamab
vedotin for the treatment of patients with previously untreated
diffuse large B-cell lymphoma. With more than 20 abstracts
presented, the data showcased Merck’s continued progress in
advancing clinical research for its expanding and diverse
hematology pipeline.
Merck also achieved several key regulatory milestones in the
U.S., Europe, Japan and China. Highlights include the U.S. Food and
Drug Administration (FDA) granting Breakthrough Therapy designation
to sacituzumab tirumotecan (sac-TMT) for the treatment of certain
patients with previously treated advanced or metastatic nonsquamous
NSCLC with epidermal growth factor receptor (EGFR) mutations.
Additionally, Merck received new approvals for KEYTRUDA-based
regimens in Japan and China, as well as for WELIREG and Lynparza in
China.
In vaccines and infectious diseases, the FDA accepted the
Biologics License Application (BLA) for clesrovimab, an
investigational prophylactic long-acting monoclonal antibody
designed to protect infants from respiratory syncytial virus (RSV)
disease during their first RSV season and set a Prescription Drug
User Fee Act (PDUFA) date of June 10, 2025. This regulatory
milestone marks important progress toward having clesrovimab
available in time for the 2025-26 RSV season. The filing was based
on results from the pivotal Phase 2b/3 study of clesrovimab in
infants for the prevention of RSV that was presented at ID Week
2024. In addition, Merck announced topline results from two pivotal
Phase 3 trials of the investigational, once-daily, oral, two-drug,
single-tablet regimen of doravirine/islatravir (DOR/ISL) in adults
with virologically suppressed HIV-1 infection, in line with Merck’s
commitment to help address the needs of people living with HIV.
In January 2025, Merck also received expanded approval in China
for GARDASIL. It is now the first HPV vaccine approved in China for
the prevention of certain HPV-related cancers and diseases in males
9-26 years of age. In addition, the European Union’s (EU) Committee
for Medicinal Products for Human Use (CHMP) recommended the
approval of CAPVAXIVE for pneumococcal vaccination in adults, with
a final decision for EU approval expected in the second quarter of
2025.
In cardiovascular disease, Merck announced positive topline
results from the Phase 3 ZENITH study, evaluating WINREVAIR in
adults with pulmonary arterial hypertension (PAH) with World Health
Organization (WHO) Group 1 functional class (FC) III or IV at high
risk of mortality. Based on the positive results of an interim
analysis, an independent data monitoring committee recommended that
the study be stopped early due to overwhelming efficacy. In
addition, in January 2025, Merck announced the Phase 3 HYPERION
study evaluating WINREVAIR in newly diagnosed adults with PAH with
FC II or III at intermediate or high risk of disease progression
was also stopped early based on the positive results from the
interim analysis of the ZENITH trial and a review of the totality
of data from the WINREVAIR clinical program to date. All
participants in both the ZENITH and HYPERION studies will be
offered the opportunity to receive WINREVAIR as part of the
open-label, long-term extension study, SOTERIA.
Merck continued to execute on its business development strategy.
The company announced the closing of an exclusive global license
for MK-2010, a novel investigational PD-1/VEGF bispecific antibody
from LaNova. Merck also entered into an exclusive global license
agreement with Hansoh to evaluate MK-4082, an investigational
preclinical oral small molecule glucagon-like peptide (GLP-1)
receptor agonist.
Notable recent news releases on Merck’s pipeline and portfolio
are provided in the table that follows.
Oncology
FDA Granted Breakthrough Therapy
Designation to sac-TMT for the Treatment of Certain Patients With
Previously Treated Advanced or Metastatic Nonsquamous NSCLC With
EGFR Mutations
(Read Announcement)
FDA Granted Priority Review to Merck’s
Application for WELIREG for the Treatment of Patients With Advanced
Pheochromocytoma and Paraganglioma
(Read Announcement)
Merck Received Positive EU CHMP Opinion
for WELIREG as Treatment for Adult Patients With Certain Types of
Von Hippel-Lindau (VHL) Disease-Associated Tumors and for Certain
Previously Treated Adult Patients With Advanced RCC, Based on
Results From Phase 2 LITESPARK-004 and Phase 3 LITESPARK-005
Trials
(Read Announcement)
Merck Received Positive EU CHMP Opinion
for KEYTRUDA Plus Chemotherapy as First-Line Treatment for Adult
Patients With Unresectable Non-Epithelioid Malignant Pleural
Mesothelioma, Based on Results From Phase 2/3 IND.227/KEYNOTE-483
Trial
(Read Announcement)
KEYTRUDA Approved in China in Combination
With Chemotherapy as Neoadjuvant Treatment, Then Continued as
Monotherapy After Surgery as Adjuvant Treatment for Patients With
Resectable Stage II, IIIA or IIIB NSCLC, Based on Results From
Phase 3 KEYNOTE-671 Trial
(Read Announcement)
WELIREG Approved in China for Treatment of
Adult Patients With Certain Types of VHL Disease-Associated Tumors,
Based on Results From Phase 2 LITESPARK-004 Trial
(Read Announcement)
Merck Announced Phase 3 MK-3475A-D77 Trial
of Subcutaneous Pembrolizumab With Berahyaluronidase Alfa Met
Primary Endpoints
(Read Announcement)
Merck Announced Phase 3 KEYLYNK-001 Trial
Met Primary Endpoint of Progression-Free Survival in Patients With
Advanced Epithelial Ovarian Cancer
(Read Announcement)
Lynparza Demonstrated Clinically
Meaningful Prolonged Survival Benefit in Early Breast Cancer, Based
on Results From Phase 3 OlympiA Trial
(Read Announcement)
Investigational Zilovertamab Vedotin in
Combination With R-CHP Demonstrated Complete Response Rate of 100%
at 1.75 MG/KG Dose in Previously Untreated Patients With Diffuse
Large B-Cell Lymphoma, Based on Results From Phase 2 WaveLINE-007
Trial
(Read Announcement)
Vaccines
Merck Announced FDA Acceptance of BLA for
Clesrovimab (MK-1654), an Investigational Long-Acting Monoclonal
Antibody Designed to Protect Infants From RSV Disease During Their
First RSV Season; FDA Set PDUFA Date of June 10, 2025
(Read Announcement)
Merck Received Expanded Approval of
GARDASIL for Males in China
(Read Announcement)
Merck Received Positive EU CHMP Opinion
for CAPVAXIVE for Pneumococcal Vaccination in Adults
(Read Announcement)
Merck Presented New Data From GARDASIL 9
Studies Reinforcing Importance of Gender-Neutral HPV Vaccination in
Adults Up to Age 45 at International Papillomavirus Conference
2024
(Read Announcement)
Cardiovascular
Merck Announced Pivotal Phase 3 ZENITH
Trial Evaluating WINREVAIR Met Primary Endpoint at Interim
Analysis
(Read Announcement)
Merck Announced Decision to Stop Phase 3
HYPERION Trial Evaluating WINREVAIR Early and Move to Final
Analysis
(Read Announcement)
Infectious Diseases
Merck Announced Topline Results From
Pivotal Phase 3 Trials Evaluating Investigational, Once-Daily,
Oral, Two-Drug, Single-Tablet Regimen of Doravirine/Islatravir
(DOR/ISL) for the Treatment of Adults With Virologically Suppressed
HIV-1 Infection
(Read Announcement)
Full-Year 2025 Financial
Outlook
The following table summarizes the company’s full-year financial
outlook.
Full Year 2025
Sales*
$64.1 billion to $65.6
billion
Non-GAAP Gross margin2
Approximately 82.5%
Non-GAAP Operating expenses2**
$25.4 billion to $26.4
billion
Non-GAAP Other (income) expense, net2
$300 million to $400 million
expense
Non-GAAP Effective tax rate2
16.0% to 17.0%
Non-GAAP EPS2***
$8.88 to $9.03
Share count (assuming dilution)
Approximately 2.53 billion
*The company does not have any
non-GAAP adjustments to sales.
**Includes $300 million for an
anticipated milestone payment to LaNova associated with the
technology transfer for MK-2010 expected to be completed in 2025.
Outlook does not assume any additional significant potential
business development transactions.
***Includes expected one-time
charge of approximately $0.09 per share related to the $300 million
milestone payment to LaNova upon completion of the technology
transfer for MK-2010.
Merck has not provided a reconciliation of forward-looking
non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other
(income) expense, net, non-GAAP effective tax rate and non-GAAP EPS
to the most directly comparable GAAP measures, given it cannot
predict with reasonable certainty the amounts necessary for such a
reconciliation, including intangible asset impairment charges,
legal settlements, and income and losses from investments in equity
securities either owned directly or through ownership interests in
investment funds, without unreasonable effort. These items are
inherently difficult to forecast and could have a significant
impact on the company’s future GAAP results.
Merck anticipates full-year 2025 sales to be between $64.1
billion and $65.6 billion, including a negative impact of foreign
exchange of approximately 2% at mid-January 2025 exchange rates.
This sales range reflects a decision to temporarily pause shipments
of GARDASIL/GARDASIL 9 into China beginning February 2025 through
at least mid-year.
Merck’s full-year non-GAAP effective income tax rate is expected
to be between 16.0% and 17.0%.
Merck expects full-year 2025 non-GAAP EPS to be between $8.88
and $9.03, including a negative impact of foreign exchange of
approximately $0.35 per share. This range includes an expected
one-time charge of $300 million, or approximately $0.09 per share,
related to a milestone payment to LaNova, which will be recognized
upon completion of the technology transfer for MK-2010. In 2024,
non-GAAP EPS of $7.65 was negatively impacted by a net charge of
$1.28 per share related to certain asset acquisitions, licensing
agreements and collaborations.
Consistent with past practice, the financial outlook does not
assume additional significant potential business development
transactions.
Earnings Conference Call
Investors, journalists and the general public may access a live
audio webcast of the earnings conference call on Tuesday, Feb. 4,
at 9 a.m. ET via this weblink. A replay of the webcast, along with
the sales and earnings news release, supplemental financial
disclosures, and slides highlighting the results, will be available
at www.merck.com.
All participants may join the call by dialing (800) 369-3351
(U.S. and Canada Toll-Free) or (517) 308-9448 and using the access
code 9818590.
About Merck
At Merck, known as MSD outside of the United States and Canada,
we are unified around our purpose: We use the power of leading-edge
science to save and improve lives around the world. For more than
130 years, we have brought hope to humanity through the development
of important medicines and vaccines. We aspire to be the premier
research-intensive biopharmaceutical company in the world – and
today, we are at the forefront of research to deliver innovative
health solutions that advance the prevention and treatment of
diseases in people and animals. We foster a diverse and inclusive
global workforce and operate responsibly every day to enable a
safe, sustainable and healthy future for all people and
communities. For more information, visit www.merck.com and connect
with us on X (formerly Twitter), Facebook, Instagram, YouTube and
LinkedIn.
Forward-Looking Statement of Merck & Co., Inc., Rahway,
N.J., USA
This news release of Merck & Co., Inc., Rahway, N.J., USA
(the “company”) includes “forward-looking statements” within the
meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. These statements are
based upon the current beliefs and expectations of the company’s
management and are subject to significant risks and uncertainties.
There can be no guarantees with respect to pipeline candidates that
the candidates will receive the necessary regulatory approvals or
that they will prove to be commercially successful. If underlying
assumptions prove inaccurate or risks or uncertainties materialize,
actual results may differ materially from those set forth in the
forward-looking statements.
Risks and uncertainties include but are not limited to, general
industry conditions and competition; general economic factors,
including interest rate and currency exchange rate fluctuations;
the impact of pharmaceutical industry regulation and health care
legislation in the United States and internationally; global trends
toward health care cost containment; technological advances, new
products and patents attained by competitors; challenges inherent
in new product development, including obtaining regulatory
approval; the company’s ability to accurately predict future market
conditions; manufacturing difficulties or delays; financial
instability of international economies and sovereign risk;
dependence on the effectiveness of the company’s patents and other
protections for innovative products; and the exposure to
litigation, including patent litigation, and/or regulatory
actions.
The company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events or otherwise. Additional factors that could cause
results to differ materially from those described in the
forward-looking statements can be found in the company’s Annual
Report on Form 10-K for the year ended December 31, 2023 and the
company’s other filings with the Securities and Exchange Commission
(SEC) available at the SEC’s Internet site ( www.sec.gov).
Appendix
Generic product names are provided below.
Pharmaceutical
BRIDION (sugammadex) CAPVAXIVE (Pneumococcal
21-valent Conjugate Vaccine) GARDASIL (Human Papillomavirus
Quadrivalent [Types 6, 11, 16 and 18] Vaccine, Recombinant)
GARDASIL 9 (Human Papillomavirus 9-valent Vaccine,
Recombinant) JANUMET (sitagliptin and metformin HCl)
JANUVIA (sitagliptin) KEYTRUDA (pembrolizumab)
LAGEVRIO (molnupiravir) Lenvima (lenvatinib)
Lynparza (olaparib) M-M-R II (Measles, Mumps and
Rubella Virus Vaccine Live) PREVYMIS (letermovir)
PROQUAD (Measles, Mumps, Rubella and Varicella Virus Vaccine
Live) Reblozyl (luspatercept) REMICADE (infliximab)
ROTATEQ (Rotavirus Vaccine, Live, Oral, Pentavalent)
SIMPONI (golimumab) VARIVAX (Varicella Virus Vaccine
Live) VAXNEUVANCE (Pneumococcal 15-valent Conjugate Vaccine)
WELIREG (belzutifan) WINREVAIR (sotatercept-csrk)
Animal Health
BRAVECTO (fluralaner)
1Net income (loss) attributable to Merck
& Co., Inc.
2Merck is providing certain 2024 and 2023
non-GAAP information that excludes certain items because of the
nature of these items and the impact they have on the analysis of
underlying business performance and trends. Management believes
that providing this information enhances investors’ understanding
of the company’s results because management uses non-GAAP results
to assess performance. Management uses non-GAAP measures internally
for planning and forecasting purposes and to measure the
performance of the company along with other metrics. In addition,
annual employee compensation, including senior management’s
compensation, is derived in part using a non-GAAP pretax income
metric. This information should be considered in addition to, but
not as a substitute for or superior to, information prepared in
accordance with GAAP. For a description of the non-GAAP
adjustments, see Table 2a attached to this release.
3 Reflects expenses related to business
combinations, including the amortization of intangible assets,
intangible asset impairment charges, and expense or income related
to changes in the estimated fair value measurement of liabilities
for contingent consideration. Also includes integration,
transaction and certain other costs associated with acquisitions
and divestitures, as well as amortization of intangible assets
related to collaborations and licensing arrangements.
4 Includes the estimated tax impacts on
the reconciling items based on applying the statutory rate of the
originating territory of the non-GAAP adjustments, as well as a
$260 million benefit and a $519 million benefit in the fourth
quarter and full year of 2024, respectively, due to reductions in
reserves for unrecognized income tax benefits resulting from the
expiration of the statute of limitations for assessments related to
certain federal tax return years. The benefit recognized in the
fourth quarter of 2024 relates to the 2020 federal tax return year
and the benefit for the full year of 2024 relates to both the 2020
and 2019 federal tax return years.
MERCK & CO., INC. CONSOLIDATED STATEMENT OF
OPERATIONS - GAAP (AMOUNTS IN MILLIONS, EXCEPT PER SHARE
FIGURES) (UNAUDITED) Table 1 GAAP
% Change GAAP % Change
4Q24
4Q23
Full Year 2024 Full Year 2023 Sales
$
15,624
$
14,630
7%
$
64,168
$
60,115
7%
Costs, Expenses and Other
Cost of sales
3,828
3,911
-2%
15,193
16,126
-6%
Selling, general and administrative
2,864
2,804
2%
10,816
10,504
3%
Research and development
4,585
9,628
-52%
17,938
30,531
-41%
Restructuring costs
51
255
-80%
309
599
-48%
Other (income) expense, net
126
78
62%
(24
)
466
*
Income (Loss) Before Taxes
4,170
(2,046
)
*
19,936
1,889
*
Income Tax Provision (Benefit)
425
(821
)
2,803
1,512
Net Income (Loss)
3,745
(1,225
)
*
17,133
377
*
Less: Net Income Attributable to Noncontrolling Interests
2
1
16
12
Net Income (Loss) Attributable to Merck & Co., Inc.
$
3,743
$
(1,226
)
*
$
17,117
$
365
*
Earnings (Loss) per Common Share Assuming Dilution (1)
$
1.48
$
(0.48
)
*
$
6.74
$
0.14
*
Average Shares Outstanding Assuming Dilution (1)
2,537
2,533
2,541
2,547
Tax Rate
10.2
%
40.1
%
14.1
%
80.0
%
* 100% or greater (1) Because the company
recorded a net loss in the fourth quarter of 2023, no potential
dilutive common shares were used in the computation of loss per
common share assuming dilution as the effect would have been
anti-dilutive.
MERCK & CO., INC. FOURTH
QUARTER AND FULL YEAR 2024 GAAP TO NON-GAAP RECONCILIATION
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)
(UNAUDITED) Table 2a GAAP
Acquisition and DivestitureRelated Costs (1)
Restructuring Costs (2) (Income) Loss fromInvestments in
EquitySecurities Certain Other Items Adjustment
Subtotal Non-GAAP Fourth Quarter Cost of
sales
$ 3,828
701
121
822
$ 3,006
Selling, general and administrative
2,864
29
16
45
2,819
Research and development
4,585
12
(1)
11
4,574
Restructuring costs
51
51
51
–
Other (income) expense, net
126
(31)
152
121
5
Income Before Taxes
4,170
(711)
(187)
(152)
(1,050)
5,220
Income Tax Provision (Benefit)
425
(111)
(3)
(17)
(3)
(33)
(3)
(260)
(4)
(421)
846
Net Income
3,745
(600)
(170)
(119)
260
(629)
4,374
Net Income Attributable to Merck & Co., Inc.
3,743
(600)
(170)
(119)
260
(629)
4,372
Earnings per Common Share Assuming Dilution
$ 1.48
(0.23)
(0.07)
(0.04)
0.10
(0.24)
$ 1.72
Tax Rate
10.2%
16.2%
Full Year Cost of sales
$ 15,193
2,409
495
2,904
$ 12,289
Selling, general and administrative
10,816
117
83
200
10,616
Research and development
17,938
72
1
73
17,865
Restructuring costs
309
309
309
–
Other (income) expense, net
(24)
(79)
45
(34)
10
Income Before Taxes
19,936
(2,519)
(888)
(45)
(3,452)
23,388
Income Tax Provision (Benefit)
2,803
(461)
(3)
(135)
(3)
(10)
(3)
(519)
(4)
(1,125)
3,928
Net Income
17,133
(2,058)
(753)
(35)
519
(2,327)
19,460
Net Income Attributable to Merck & Co., Inc.
17,117
(2,058)
(753)
(35)
519
(2,327)
19,444
Earnings per Common Share Assuming Dilution
$ 6.74
(0.81)
(0.30)
(0.01)
0.21
(0.91)
$ 7.65
Tax Rate
14.1%
16.8%
Only the line items that are affected by non-GAAP
adjustments are shown. Merck is providing certain non-GAAP
information that excludes certain items because of the nature of
these items and the impact they have on the analysis of underlying
business performance and trends. Management believes that providing
non-GAAP information enhances investors’ understanding of the
company’s results because management uses non-GAAP measures to
assess performance. Management uses non-GAAP measures internally
for planning and forecasting purposes and to measure the
performance of the company along with other metrics. In addition,
annual employee compensation, including senior management’s
compensation, is derived in part using a non-GAAP pretax income
metric. The non-GAAP information presented should be considered in
addition to, but not as a substitute for or superior to,
information prepared in accordance with GAAP. (1) Amounts included
in cost of sales primarily reflect expenses for the amortization of
intangible assets. Amounts included in selling, general and
administrative expenses reflect integration, transaction and
certain other costs related to acquisitions and divestitures.
Amounts included in research and development expenses primarily
reflect the amortization of intangible assets. Additionally,
research and development expenses for the full year includes Animal
Health intangible asset impairment charges. Amounts included in
other (income) expense, net, primarily reflect royalty income and a
decrease in the estimated fair value measurement of liabilities for
contingent consideration related to the prior termination of the
Sanofi-Pasteur MSD joint venture. (2) Amounts primarily include
employee separation costs, accelerated depreciation and asset
impairments associated with facilities to be closed or divested
related to activities under the company's formal restructuring
programs. (3) Represents the estimated tax impacts on the
reconciling items based on applying the statutory rate of the
originating territory of the non-GAAP adjustments. (4) Represents
benefits recorded in the fourth quarter and full year due to
reductions in reserves for unrecognized income tax benefits
resulting from the expiration of the statute of limitations for
assessments related to federal income tax return years. The benefit
recognized in the fourth quarter relates to the 2020 federal tax
return year and the benefit recognized for the full year relates to
both the 2020 and 2019 federal tax return years.
MERCK &
CO., INC. FRANCHISE / KEY PRODUCT SALES (AMOUNTS IN
MILLIONS) (UNAUDITED) Table 3
2024
2023
4Q
Full Year
1Q 2Q 3Q 4Q Full Year 1Q
2Q 3Q 4Q Full Year Nom %
Ex-Exch % Nom % Ex-Exch % TOTAL SALES
(1)
$15,775
$16,112
$16,657
$15,624
$64,168
$14,487
$15,035
$15,962
$14,630
$60,115
7
9
7
10
PHARMACEUTICAL
14,006
14,408
14,943
14,042
57,400
12,721
13,457
14,263
13,141
53,583
7
8
7
10
Oncology Keytruda
6,947
7,270
7,429
7,836
29,482
5,795
6,271
6,338
6,608
25,011
19
21
18
22
Alliance Revenue – Lynparza (2)
292
317
337
365
1,311
275
310
299
315
1,199
16
18
9
11
Alliance Revenue – Lenvima (2)
255
249
251
255
1,010
232
242
260
226
960
13
14
5
6
Welireg
85
126
139
160
509
42
50
54
72
218
122
123
133
133
Alliance Revenue – Reblozyl (3)
71
90
100
110
371
43
47
52
70
212
58
58
75
75
Vaccines (4) Gardasil/Gardasil 9
2,249
2,478
2,306
1,550
8,583
1,972
2,458
2,585
1,871
8,886
-17
-18
-3
-2
ProQuad/M-M-R II/Varivax
570
617
703
594
2,485
528
582
713
545
2,368
9
9
5
5
Vaxneuvance
219
189
239
161
808
106
168
214
176
665
-9
-9
22
23
RotaTeq
216
163
193
139
711
297
131
156
185
769
-25
-25
-8
-7
Pneumovax 23
61
59
68
74
263
96
92
140
85
412
-12
-12
-36
-34
Hospital Acute Care Bridion
440
455
420
449
1,764
487
502
424
429
1,842
5
5
-4
-3
Prevymis
174
188
208
215
785
129
143
157
175
605
23
23
30
33
Dificid
73
92
96
79
340
65
76
74
87
302
-9
-9
13
13
Zerbaxa
56
62
64
70
252
50
54
53
61
218
14
16
16
18
Noxafil
56
45
41
36
177
60
55
51
46
213
-23
-17
-17
-8
Cardiovascular Winrevair
70
149
200
419
-
-
-
-
Alliance Revenue - Adempas/Verquvo (5)
98
106
102
109
415
99
68
92
108
367
1
1
13
13
Adempas (6)
70
72
72
73
287
59
65
65
66
255
11
9
12
14
Virology Lagevrio
350
110
383
121
964
392
203
640
193
1,428
-37
-37
-33
-28
Isentress/Isentress HD
111
89
102
92
394
123
136
119
105
483
-13
-7
-18
-14
Delstrigo
56
60
65
69
249
44
50
54
54
201
28
29
24
26
Pifeltro
42
39
42
40
163
34
38
37
33
142
20
20
15
15
Neuroscience Belsomra
46
53
78
45
222
56
63
58
54
231
-17
-17
-4
1
Immunology Simponi
184
172
189
543
180
180
179
171
710
N/M
N/M
-24
-23
Remicade
39
35
41
114
51
48
45
43
187
N/M
N/M
-39
-36
Diabetes (7) Januvia
419
405
278
232
1,334
551
511
581
547
2,189
-58
-56
-39
-36
Janumet
251
224
204
255
935
329
354
255
240
1,177
7
11
-21
-16
Other Pharmaceutical (8)
576
573
644
713
2,510
626
560
568
576
2,333
25
25
8
10
ANIMAL HEALTH
1,511
1,482
1,487
1,397
5,877
1,491
1,456
1,400
1,278
5,625
9
13
4
8
Livestock
850
837
886
889
3,462
849
807
874
808
3,337
10
14
4
9
Companion Animal
661
645
601
508
2,415
642
649
526
470
2,288
8
10
6
7
Other Revenues (9)
258
222
227
185
891
275
122
299
211
907
-13
3
-2
4
N/M - Not Meaningful Sum of quarterly amounts may not equal
year-to-date amounts due to rounding. (1) Only select products are
shown. (2) Alliance Revenue represents Merck’s share of profits,
which are product sales net of cost of sales and commercialization
costs. (3) Alliance Revenue represents royalties. (4) Total
Vaccines sales were $3,424 million, $3,656 million, $3,675 million
and $2,693 million in the first, second, third and fourth quarter
of 2024, respectively, and $3,133 million, $3,557 million, $4,002
million and $2,962 million in the first, second, third and fourth
quarter of 2023, respectively. (5) Alliance Revenue represents
Merck's share of profits from sales in Bayer's marketing
territories, which are product sales net of cost of sales and
commercialization costs. (6) Net product sales in Merck's marketing
territories. (7) Total Diabetes sales were $745 million, $715
million, $592 million and $546 million in the first, second, third
and fourth quarter of 2024, respectively, and $950 million, $951
million, $924 million and $876 million in the first, second, third
and fourth quarter of 2023, respectively. (8) Includes
Pharmaceutical products not individually shown above. (9) Other
Revenues are comprised primarily of revenues from third-party
manufacturing arrangements and miscellaneous corporate revenues,
including revenue-hedging activities. Other Revenues related to the
receipt of upfront and milestone payments for out-licensed products
were $61 million, $15 million, $15 million and $15 million in the
first, second, third and fourth quarter of 2024, respectively, and
$51 million, $3 million and $65 million in the first, second and
third quarter of 2023, respectively.
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