Merck's 2025 Revenue Outlook Falters as Gardasil Shipments to China Pause

Merck & Co., Inc. (NYSE: MRK) has announced a pause in shipments of its Gardasil vaccine to China, which is expected to impact the company's 2025 revenue outlook. The company anticipates revenue in the range of $64.1 billion to $65.6 billion, falling short of the average analyst estimate of $67.3 billion. This shortfall is primarily attributed to weak demand for the HPV vaccine in China, which accounts for a significant portion of Merck's international Gardasil sales.

The pause in Gardasil shipments to China began this month, with the company citing economic issues in the country and an anti-bribery and anti-corruption drive as contributing factors. Beijing has been running a campaign targeting bribery of doctors, which has disrupted business and scuttled hospital deals with international pharmaceutical companies, including Merck. This drive has led to a reduction in scientific engagement and fewer immunizations, further impacting Gardasil sales.

Merck's fourth-quarter Gardasil sales were $1.55 billion, below Wall Street's forecast of around $1.8 billion, which has been pared back nearly 20% since the issues in China were disclosed last summer. Despite the decline in Gardasil sales, Merck's overall revenue outlook remains strong, driven by the continued success of its cancer drug Keytruda. The company sold over $7.8 billion worth of the drug in the quarter, compared with analyst forecasts of around $7.4 billion.