Merck Q2 Sales Down 2% to $15.8B, Keytruda Sales Rise 9% to $8B

Merck & Co.'s Q2 2025 financial results show a 2% decline in worldwide sales to $15.8 billion. KEYTRUDA sales grew 9% to $8.0 billion, while GARDASIL sales dropped 55% to $1.1 billion. Merck revised its full-year sales outlook to between $64.3 billion and $65.3 billion, excluding the impact of the Verona Pharma acquisition.

Merck & Co. (NYSE: MRK) released its second-quarter 2025 financial results, showing a 2% decline in worldwide sales to $15.8 billion. The company's shares fell 3.05% in premarket trading to $81.50, reflecting investor concerns despite some positive developments. Key highlights include a 9% growth in KEYTRUDA sales to $8.0 billion and a 55% drop in GARDASIL sales in China to $1.1 billion. Merck revised its full-year sales outlook to between $64.3 billion and $65.3 billion, excluding the impact of the Verona Pharma acquisition [1].

The company's oncology segment, particularly KEYTRUDA, showed strong performance, with sales growing 9% to $7.96 billion. This growth was driven by rapid uptake across earlier-stage indications such as triple-negative breast cancer, renal cell carcinoma, and non-small cell lung cancer. Additionally, continued momentum in metastatic indications boosted sales growth [2].

In contrast, sales of GARDASIL and GARDASIL 9 vaccines plunged 55% to $1.13 billion due to lower demand in China and the timing of public-sector purchases in certain international markets. The Gardasil/Gardasil 9 sales figure missed the Zacks Consensus Estimate of $1.30 billion and our estimate of $1.43 billion [2].

Merck's Animal Health segment generated revenues of $1.65 billion, up 11% year over year, driven by higher demand for livestock products and the inclusion of sales from the Elanco aqua business acquired last July. This segment beat the Zacks Consensus Estimate and our model estimate of $1.55 billion [2].

Despite the mixed performance, Merck's adjusted gross margin was 82.2%, up 130 basis points year over year, driven by a favorable product mix. Adjusted selling, general, and administrative expenses were $2.63 billion in the second quarter, down 2% year over year, owing to lower administrative and promotional costs. Adjusted research and development spending was $3.99 billion, up 15% from the year-ago quarter levels [2].

Merck narrowed its sales and EPS guidance for the year despite a less negative impact from currency. The company now expects revenues to be in the range of $64.3-$65.3 billion, compared with the previous expectation of $64.1-$65.6 billion. Adjusted EPS is expected to be between $8.87 and $8.97 versus the prior estimated range of $8.82 and $8.97 [2].

The revised guidance now also accounts for a one-time charge of $200 million payable as an upfront payment to China-based Hengrui Pharma for in-licensing the latter’s investigational oral Lp(a) inhibitor, HRS-5346. Additionally, a one-time charge of $300 million (to be recorded in the third quarter of 2025) related to a payment made to LaNova for the technology transfer for MK-2010 will impact EPS by almost 16 cents in aggregate [2].

Merck continues to navigate a complex landscape, balancing the impact of new product launches, market dynamics, and strategic acquisitions. The upcoming acquisition of Verona Pharma, expected to close in the fourth quarter of 2025, is anticipated to add significant value to the company's portfolio and pipeline [1].

References:
[1] https://www.merck.com/stories/our-q2-2025-financial-results/
[2] https://www.nasdaq.com/articles/merck-q2-earnings-top-sales-meet-estimates-2025-view-narrowed