Merck's Q4 2024 Earnings Call: Dissecting Contradictions in GARDASIL Sales, Inventory Strategies, and Political Impacts

These are the key contradictions discussed in Merck & Co., Inc.'s latest 2024Q4 earnings call, specifically including: GARDASIL sales targets and expectations, inventory management strategies, and impact of political climate on vaccine prioritization:



Revenue and Oncology Growth:
- Merck reported total company revenues of $15.6 billion in Q4 2024, with a 7% increase compared to the previous year.
- This growth was driven by robust demand for its innovative portfolio, particularly in oncology, with KEYTRUDA sales increasing by 21% to $7.8 billion.

GARDASIL Sales Decline and Strategy Adjustment:
- GARDASIL sales decreased by 18% to $1.6 billion due to lower demand in China and competitive pressures.
- Merck decided to pause shipments to China for at least mid-2025 to facilitate a reduction in inventory levels and support their Chinese partner's financial position.

New Product Launches and Pipeline Expansion:
- Merck's new products, such as WINREVAIR and CAPVAXIVE, contributed significantly to growth, with WINREVAIR achieving $200 million in sales predominantly in the U.S.
- The company's robust pipeline includes at least 20 potential new growth drivers, with a significant emphasis on oncology, cardiometabolic, and infectious diseases.

Operating Expenses and Business Development:
- Operating expenses decreased to $7.4 billion, with strategic investments reflecting Merck's focus on its robust early and late-phase pipeline and key growth drivers.
- The company executed value-enhancing business development deals, including licensing anti-PD-1/VEGF bispecific antibody and oral GLP-1 receptor agonist candidates.