Merck's 2025 Q1 Earnings Call: Navigating Contradictions in GARDASIL and KEYTRUDA Strategies

GARDASIL inventory and sales strategy, KEYTRUDA patent expiration and future growth, GARDASIL sales and growth expectations, KEYTRUDA patent expiration and impact on stock, GARDASIL sales and market dynamics in China are the key contradictions discussed in Merck's latest 2025Q1 earnings call.



Revenue and Product Growth:
- Merck & Co., Inc. reported revenue of $15.5 billion for Q1 2025, reflecting strength in oncology, animal health, and the strong launches of WINREVAIR and CAPVAXIVE.
- The growth was driven by these new product launches and increased contributions from the company's newer commercialized medicines.

Oncology Performance:
- Sales of KEYTRUDA grew 6% to $7.2 billion, driven by increased uptake in earlier-stage cancers and robust demand for metastatic indications.
- Growth was particularly strong in metastatic disease, with increased use of KEYTRUDA in combination with Padcev in first-line locally advanced urothelial cancer.

Impact of Tariffs and Supply Chain Strategy:
- Merck expects approximately $200 million in costs from tariffs implemented between the U.S. and China, impacting current earnings.
- The company is mitigating these effects by evolving its supply chain strategy, with significant investments in U.S. manufacturing to align with the new administration's efforts.

Pipeline and Product Development:
- The breadth of Merck's pipeline is expanding, with over 20 new products expected to come to the market over the next few years, each with blockbuster potential.
- This expansion is driven by advancements in internally discovered compounds and strategic business development transactions across therapeutic areas of high unmet need.