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Merck On Thursday, it lowered its annual profit guidance, citing estimated tariff costs and claims related to recent transactions.
The company currently expects adjusted revenue for 2025 to be between $8.82 and $8.97, a slight decline from its forecast of $8.88 to $9.03 per share.
The company said its expected tariff claims primarily reflect tax levies to a lower degree, primarily between the US and China, Canada and Mexico. Merck has built a robust presence in China, which is considered one of the company’s most important markets, and is part of its partners and manufacturing and research and development sites.
Merck said the new outlook does not take into account President Donald Trump’s planned tariffs on drugs imported into the US, so some drugs are urging them to strengthen the US manufacturing footprint.
This includes Merck, which invests $12 billion in US manufacturing and research and development, and is expected to enter the country by the end of 2028.
However, the guidance includes a one-time fee of approximately 6 cents per share related to the company’s licensing agreement with Hengrui Pharma. announcement In March.
Merck repeated its full-year sales forecast between $64.1 billion and $65.6 billion.
Also on Thursday, drugmakers reported first quarter revenues and profits that beat expectations as they said they had strengths in their oncology portfolio and animal health products.
Merck also cited “increasingly meaningful” sales contributions from two recently launched drugs. They are vaccines that are used to treat rare and deadly lung conditions, Capvaxi-type, designed to protect adults from bacteria known as pneumococcus pneumoniae, which can cause serious illnesses and lung infections.
The sale of these drugs is important to Merck’s efforts to offset losses from keytruda, the head of sales cancer therapy that will lose its exclusivity in 2028.
Based on an analyst survey by LSEG, here is what Merck reported in the first quarter compared to what Wall Street had expected:
- Earnings per share: $2.22 adjusted vs $2.14 forecast
- Revenue: $15.53 billion vs $153.1 billion is expected
The company recorded net income of $5.08 billion, or $2.01 per share, for the quarter. This is compared to net profit of $4.766 billion, or $1.87 per share, year-on-year.
Merck won $2.22 per share in the first quarter, excluding acquisition and restructuring costs.
Merck earned quarterly $15.53 billion, down 2% from the same period a year ago.
Pharmaceuticals and animal health sales
Merck’s drug unit, which develops a wide range of drugs, booked revenue of $13.644 billion in the first quarter. This is a 3% decrease from the same period a year ago.
Keytruda recorded revenue of $7.21 billion in the quarter, up just 4% year-on-year.
This increase was driven by higher intake of Keytruda for early stage cancer and a strong demand for metastatic cancer drugs that spread to other parts of the body. Still, StreetAccount estimates showed analysts’ forecast of $7.433 billion in sales.
Merck in particular kept watching Issues in China selling Gardasil, a vaccine that prevents cancer from HPV, the most common sexually transmitted disease in the US
In February, Merck announced its decision to halt Gardasil’s shipments to China from that month, moving on to at least mid-2025. Investors may be looking for updates on their efforts during Thursday’s revenue call.
The Chinese market accounts for the majority of the international revenue of the hit shot. Merck hopes Gardasil’s expanded approval for a Chinese man between nine and 26 years old will help boost the capture of the shot.
Gardasil won sales at $1.333 billion, down 41% from the first quarter of 2024, primarily due to low demand in China. StreetAccount estimates that this is below the $1.45 billion analysts had been expecting.
China retaliated with a 125% tariff on goods from the US, experts said that Chinese tariffs on US products could lead to an increase in prices or a limited supply of popular Western medicines for Chinese patients It has been reported.
Merck’s Animal Health Department, which develops vaccines and drugs for dogs, cats and cattle, recorded sales of nearly $1.59 billion, up 5% from the same period a year ago. The company said there was high demand for livestock products and sales from Elanco’s Aqua business, which it acquired last year, and it accelerated its growth.
