MRK
Merck & Co, INC
NYSE
10-K: Merck & Co. Reports Strong 2024 Performance Driven by Oncology, Issues Guidance for 2025
Sentiment:
Annual Results
25 February 2025 4:19 PM
Merck & Co.'s 2024 annual report reveals robust sales growth driven by its oncology portfolio, particularly Keytruda, while also outlining challenges and strategic initiatives for the future.
Worse than expected
The company expects a significant decline in Gardasil/Gardasil 9 sales in China for 2025.
The company expects U.S. sales of Keytruda to decline beginning in January 2028 due to government pricing under the IRA.
Delay expected
The company is currently experiencing manufacturing delays related to Varivax and ProQuad which will result in supply constraints in 2025.
Summary
- Merck & Co.'s 2024 sales reached $64.2 billion, a 7% increase from 2023, or 10% excluding foreign exchange impacts.
- Pharmaceutical sales were $57.4 billion, with Keytruda contributing $29.482 billion, an 18% increase.
- Gardasil/Gardasil 9 sales declined 3% to $8.583 billion due to lower demand in China.
- Animal Health sales increased 4% to $5.877 billion.
- GAAP net income attributable to Merck & Co., Inc. was $17.117 billion.
- The company anticipates a significant decline in Gardasil/Gardasil 9 sales in China for 2025 and expects U.S. sales of Keytruda to decline beginning in January 2028 due to government pricing under the IRA.
- Merck is working to mitigate the potentially harmful effects that the IRA could have, which could include a detrimental impact on innovation.
- The company is prioritizing research and development efforts, focusing on breakthrough science for unmet medical needs.
- Merck is committed to a net-zero target for its GHG emissions across its global operations (Scopes 1, 2 and 3) by 2045, aligned with the guidelines of the Science Based Targets initiative (SBTi).
Sentiment
Score: 7
Explanation: The document presents a mixed sentiment. While there's strong growth in key areas like oncology, there are also significant challenges and expected declines in sales for major products. The company is taking steps to mitigate these risks and invest in future growth, but the overall outlook is cautiously optimistic.
Positives
- Strong growth in oncology, particularly Keytruda, driving overall sales increase.
- Successful launch of Winrevair in the cardiovascular segment.
- Continued growth in Animal Health segment.
- Advancement of the company's pipeline with several regulatory submissions and Phase 3 initiations.
- Commitment to environmental sustainability with a net-zero target for GHG emissions by 2045.
Negatives
- Decline in Gardasil/Gardasil 9 sales in China.
- Expected decline in U.S. sales of Keytruda beginning in 2028 due to government pricing under the IRA.
- Loss of market exclusivity for Bridion in Europe and Japan.
- Manufacturing delays related to Varivax and ProQuad which will result in supply constraints in 2025.
Risks
- Patent rights are increasingly being challenged by competitors.
- The company faces increasing pricing pressure with respect to its products.
- Unfavorable or uncertain economic conditions could negatively affect operating results.
- The company faces intense competition from both lower cost generic and biosimilar products and competitors products.
- The company is exposed to market risk from fluctuations in currency exchange rates and interest rates.
- The company continues to be a target of cyber-attacks that could lead to a disruption of its worldwide operations.
Future Outlook
The company expects pricing pressures to continue in the future and anticipates a significant decline in Gardasil/Gardasil 9 sales in China for 2025 and expects U.S. sales of Keytruda to decline beginning in January 2028 due to government pricing under the IRA.
Industry Context
The pharmaceutical industry is highly competitive and regulated, with companies facing pressure on product pricing and market access due to global cost containment efforts and government regulations.
Comparison to Industry Standards
- The document does not provide a direct comparison of Merck's results to specific industry standards or competitors.
- However, it mentions that the company's competitors include other worldwide research-based pharmaceutical companies, smaller research companies with more limited therapeutic focus, generic drug manufacturers, and animal health care companies.
- The document also notes that the company faces intense competition from both lower cost generic and biosimilar products and competitors products.
Stakeholder Impact
- Shareholders may experience fluctuations in stock value due to various factors, including competition, regulation, and economic conditions.
- Employees may be affected by restructuring activities and changes in compensation and benefits.
- Customers and patients may benefit from new product launches and expanded indications for existing products, but may also face pricing pressures and access challenges.
- Suppliers may be impacted by changes in the company's supply chain and environmental sustainability initiatives.
- Creditors may be affected by changes in the company's debt levels and financial performance.
Next Steps
- Merck is working with Daiichi Sankyo to address FDA feedback regarding patritumab deruxtecan.
- The CHMPs recommendation will now be reviewed by the EC for marketing authorization in the EU, and a final decision is expected by the second quarter of 2025.
- The company is working to mitigate the potentially harmful effects that the IRA could have, which could include a detrimental impact on innovation.
- The next government-mandated price reduction in Japan is scheduled to occur in April 2025.
- The Phase 2 study results for MK-2060 will be presented at a scientific meeting later in 2025.
Legal Proceedings
- The company has sued the U.S. government regarding the IRAs Program.
- The company is often involved in patent disputes relating to challenges to its patents or claims by third parties of infringement against the company.
- The company is at risk for product liability and consumer protection claims and civil and criminal governmental actions related to its products, research and/or marketing activities.
Key Dates
- January 1, 2024: Elimination of the statutory cap on rebates drug manufacturers pay to Medicaid.
- January 2024: FDA approval of Keytruda in combination with chemoradiotherapy for cervical cancer and full approval for HCC secondary to hepatitis B.
- January 2024: EC approval of Bravecto injectable formulation for dogs.
- February 2024: China's NMPA approval of Keytruda in combination with gemcitabine and cisplatin for biliary tract carcinoma.
- March 2024: EC approval of Keytruda in combination with platinum-containing chemotherapy for resectable NSCLC.
- March 2024: FDA approval of Winrevair for pulmonary arterial hypertension.
- May 2024: Japan's MHLW approval of Keytruda in combination with chemotherapy for gastric or GEJ adenocarcinoma and biliary tract cancer.
- June 2024: FDA approval of Keytruda in combination with carboplatin and paclitaxel for endometrial carcinoma.
- June 2024: China's NMPA approval of Keytruda in combination with trastuzumab, fluoropyrimidine and platinum-containing chemotherapy for HER2 positive gastric or GEJ adenocarcinoma.
- June 2024: FDA approval of Capvaxive for the prevention of invasive pneumococcal disease and pneumococcal pneumonia.
- June 2024: FDA issued a Complete Response Letter for patritumab deruxtecan.
- September 2024: EC approval of Keytruda in combination with Padcev for urothelial carcinoma and FDA approval in combination with chemotherapy for malignant pleural mesothelioma.
- September 2024: Japan's MHLW approval of Keytruda in combination with chemotherapy for NSCLC and in combination with Padcev for urothelial carcinoma.
- September 2024: China's NMPA approval of Keytruda for the first-line treatment of unresectable or metastatic melanoma.
- October 2024: EC approval of Keytruda in combination with chemoradiotherapy for locally advanced cervical cancer and in combination with carboplatin and paclitaxel for endometrial carcinoma.
- August 2024: EC approval of Winrevair for pulmonary arterial hypertension.
- November 2024: Japan's MHLW approval of Keytruda in combination with chemoradiotherapy for cervical cancer.
- November 2024: China's NMPA approval of Welireg for the treatment of adult patients with certain von Hippel-Lindau (VHL) disease-associated tumors.
- December 2024: Japan's MHLW approval of Keytruda in combination with carboplatin and paclitaxel for endometrial carcinoma.
- December 2024: China's NMPA approval of Keytruda in combination with platinum-containing chemotherapy for resectable stage II, IIIA, or IIIB NSCLC.
- December 2024: China's NMPA approval of Keytruda in combination with chemoradiotherapy for cervical cancer.
- January 2025: China's NMPA approval of Keytruda in combination with Padcev for urothelial cancer.
- January 2025: China's NMPA approval of Gardasil for use in males 9-26 years of age.
- January 2025: China's NMPA approval of Lynparza for the adjuvant treatment of adult patients with deleterious or suspected deleterious germline BRCA -mutated, HER2-negative high-risk early breast cancer.
- February 2025: EC conditional approval of Welireg as monotherapy for the treatment of adult patients with VHL disease and for the treatment of adult patients with advanced clear cell RCC.
Keywords
MRK
Merck & Co, INC
NYSE
Sector: TBD
Filings with Classifications
Worse than expected
2 May 2025 4:10 PM
Quarterly Report
- Worldwide sales were down 2% year over year.
- Gardasil/Gardasil 9 sales declined significantly by 41% due to lower demand in China.
- Lagevrio sales decreased by 71% due to lower demand in the Asia Pacific region.
Delay expected
2 May 2025 4:10 PM
Quarterly Report
- The company has experienced manufacturing delays related to ProQuad and Varivax, and anticipates that some international markets will experience supply constraints during 2025.
Worse than expected
24 April 2025 6:45 AM
Quarterly Report
- Total worldwide sales decreased by 2% compared to the first quarter of 2024.
- The full-year 2025 non-GAAP EPS outlook was revised to reflect a negative impact from an anticipated one-time charge of approximately $0.06 per share related to the license agreement with Hengrui Pharma.
Worse than expected
25 February 2025 4:19 PM
Annual Results
- The company expects a significant decline in Gardasil/Gardasil 9 sales in China for 2025.
- The company expects U.S. sales of Keytruda to decline beginning in January 2028 due to government pricing under the IRA.
Delay expected
25 February 2025 4:19 PM
Annual Results
- The company is currently experiencing manufacturing delays related to Varivax and ProQuad which will result in supply constraints in 2025.
Better than expected
4 February 2025 6:45 AM
Earnings Release
- The company's full year sales of $64.2 billion were better than the $60.115 billion in the prior year.
- The company's full year GAAP EPS of $6.74 was better than the $0.14 in the prior year.
- The company's full year Non-GAAP EPS of $7.65 was better than the $1.51 in the prior year.
Better than expected
29 January 2025 6:27 PM
SEC Form 4
- The performance shares were paid out at 169 percent of target awards, indicating that the company exceeded its performance goals during the three-year period.
Better than expected
29 January 2025 6:25 PM
SEC Form 4 Filing
- The performance shares were paid out at 169 percent of target awards, indicating that the company exceeded its performance goals.
Better than expected
29 January 2025 6:23 PM
SEC Form 4
- The performance shares were paid out at 169 percent of target awards, indicating better than expected performance.
Better than expected
29 January 2025 6:21 PM
SEC Form 4 Filing
- The performance shares were paid out at 169 percent of target awards, indicating better than expected performance.
Better than expected
29 January 2025 6:19 PM
SEC Form 4 Filing
- The performance shares were paid out at 169 percent of target awards, indicating better than expected performance.
Better than expected
29 January 2025 6:17 PM
SEC Form 4 Filing
- The performance shares were paid out at 169 percent of target awards, indicating better than expected performance.
Better than expected
29 January 2025 6:14 PM
SEC Form 4 Filing
- The performance shares were paid out at 169 percent of target awards, indicating better than expected performance.
Better than expected
29 January 2025 6:12 PM
SEC Form 4 Filing
- The performance shares were paid out at 169 percent of target awards, indicating better than expected performance.
Better than expected
29 January 2025 6:09 PM
SEC Form 4 Filing
- The performance shares were paid out at 169 percent of target awards, indicating better than expected performance.
Delay expected
6 November 2024 4:05 PM
Quarterly Report
- Merck is currently working to incorporate guidance from regulatory authorities into the company's clinical trial design for its two prospective Gardasil 9 single-dose trials, consequently, the trials will not be started in 2024.
Worse than expected
6 November 2024 4:05 PM
Quarterly Report
- Net income attributable to Merck decreased in Q3 2024 compared to Q3 2023 due to significant acquisition charges and restructuring costs.
Worse than expected
31 October 2024 6:44 AM
Quarterly Report
- The company's GAAP and non-GAAP EPS were lower than the previous year due to significant charges related to business development transactions.
Delay expected
5 August 2024 4:02 PM
Quarterly Report
- The company received a complete response letter from the FDA for patritumab deruxtecan due to manufacturing facility issues.
Better than expected
5 August 2024 4:02 PM
Quarterly Report
- The company's net income improved significantly compared to the same period last year, which had a net loss.
- The company's sales growth exceeded expectations, driven by strong performance in oncology and vaccines.
- The company's research and development expenses decreased due to lower charges for business development transactions.
Worse than expected
30 July 2024 6:41 AM
Quarterly Report
- The full-year non-GAAP EPS outlook was lowered due to a one-time charge of approximately $1.3 billion, or $0.51 per share, for the acquisition of EyeBio.
Capital raise
30 May 2024 4:14 PM
Debt Issuance Announcement
- MSD Netherlands Capital B.V. raised $3.4 billion through the issuance of senior notes.
- The proceeds from the offering will be used for general corporate purposes.
Better than expected
3 May 2024 4:10 PM
Quarterly Report
- The company's sales and net income exceeded expectations due to strong performance in oncology and vaccines.
- Keytruda sales growth was higher than anticipated, driven by new indications and continued uptake.
- The company's gross margin improved due to favorable product mix and lower royalty rates.
Better than expected
25 April 2024 6:41 AM
Quarterly Report
- Merck's first quarter sales and earnings exceeded expectations, driven by strong growth in key products.
- The company raised and narrowed its full-year outlook, indicating increased confidence in future performance.
Worse than expected
26 February 2024 4:06 PM
Annual Results
- The company experienced a significant decrease in net income from continuing operations, with GAAP net income at $365 million and non-GAAP net income at $3.837 billion, which is worse than the previous year.
- The company experienced a substantial decline in Lagevrio sales, which is worse than the previous year.
Worse than expected
1 February 2024 6:39 AM
Quarterly Report
- The company reported a GAAP loss per share for the fourth quarter and a significantly lower EPS for the full year compared to the previous year, primarily due to charges related to collaborations and business development transactions.
- Non-GAAP EPS also declined significantly compared to the previous year, indicating a weaker financial performance despite excluding certain items.
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