July 29, 2025 6:30 am ET
Total Worldwide Sales Were $15.8 Billion, a Decrease of 2% From Second Quarter 2024 Both Nominally and Excluding the Impact of Foreign Exchange KEYTRUDA Sales Were $8.0 Billion, Growth of 9% Both Nominally and Excluding the Impact of Foreign Exchange WINREVAIR Sales Were $336 Million Animal Health Sales Were $1.6 Billion, Growth of 11% Both Nominally and Excluding the Impact of Foreign Exchange GARDASIL/GARDASIL 9 Sales Were $1.1 Billion, a Decline of 55% Both Nominally and Excluding the Impact of Foreign Exchange GAAP EPS Was $1.76; Non-GAAP EPS Was $2.13; GAAP and Non-GAAP EPS Include a Charge of $0.07 per Share for Closing of Hengrui Pharma License Agreement Announced Agreement To Acquire Verona Pharma and Its First-In-Class COPD Maintenance Treatment for Adults, Ohtuvayre®;1 Transaction Expected To Close in Fourth Quarter 2025 Announced Positive Topline Results From First Two Phase 3 CORALreef Trials of Enlicitide Decanoate for Treatment of Adults With Hyperlipidemia Received FDA Approval of ENFLONSIA for Prevention of RSV Lower Respiratory Tract Disease in Infants Born During or Entering Their First RSV Season; CDC’s ACIP Recommended ENFLONSIA for Prevention of RSV in Infants Younger Than 8 Months of Age for Their First RSV Season Announced Multiyear Optimization Initiative Anticipated To Result in Approximately $3.0 Billion of Annual Cost Savings by the End of 2027, To Be Fully Reinvested Into Strategic Growth Areas Full-Year 2025 Financial Outlook Narrows Expected Worldwide Sales Range To Be Between $64.3 Billion and $65.3 Billion Narrows Expected Non-GAAP EPS Range To Be Between $8.87 and $8.97 Outlook Does Not Include Anticipated Impact of the Announced Acquisition of Verona Pharma
KEYTRUDA Sales Were $8.0 Billion, Growth of 9% Both Nominally and Excluding the Impact of Foreign Exchange WINREVAIR Sales Were $336 Million Animal Health Sales Were $1.6 Billion, Growth of 11% Both Nominally and Excluding the Impact of Foreign Exchange GARDASIL/GARDASIL 9 Sales Were $1.1 Billion, a Decline of 55% Both Nominally and Excluding the Impact of Foreign Exchange
Narrows Expected Worldwide Sales Range To Be Between $64.3 Billion and $65.3 Billion Narrows Expected Non-GAAP EPS Range To Be Between $8.87 and $8.97 Outlook Does Not Include Anticipated Impact of the Announced Acquisition of Verona Pharma
RAHWAY, N.J.--(BUSINESS WIRE)-- Merck & Co., Inc., Rahway, N.J., USA (NYSE: MRK), known as MSD outside the United States and Canada, today announced financial results for the second quarter of 2025.
"Earlier this month, we were pleased to announce our pending acquisition of Verona Pharma, which augments our portfolio and pipeline and is another example of acting decisively when science and value align,” said Robert M. Davis, chairman and chief executive officer. “Today, we announced a multiyear optimization initiative that will redirect investment and resources from more mature areas of our business to our burgeoning array of new growth drivers, further enable the transformation of our portfolio, and drive our next chapter of productive, innovation-driven growth. With these actions, I am confident that we are well positioned to generate near- and long-term value for our shareholders and, most importantly, deliver for our patients.”
Financial Summary
$ in millions, except EPS amounts
Second Quarter
2025
2024
Change
Change Ex- Exchange
Sales
$15,806
$16,112
-2%
-2%
GAAP net income2
4,427
5,455
-19%
-17%
Non-GAAP net income that excludes certain items2,3*
5,366
5,809
-8%
-6%
GAAP EPS
1.76
2.14
-18%
-16%
Non-GAAP EPS that excludes certain items3*
2.13
2.28
-7%
-5%
*Refer to table on page 7.
For the second quarter of 2025, Generally Accepted Accounting Principles (GAAP) earnings per share (EPS) assuming dilution was $1.76 and non-GAAP EPS was $2.13. GAAP and non-GAAP EPS in the second quarter of 2025 include a charge of $0.07 per share for an upfront payment to Jiangsu Hengrui Pharmaceuticals Co., Ltd. (Hengrui Pharma) upon closing of a license agreement. Non-GAAP EPS excludes acquisition- and divestiture-related costs, costs related to restructuring programs, and income and losses from investments in equity securities. Non-GAAP EPS in the second quarter of 2025 also excludestax benefits primarily resulting from favorable audit adjustments. Non-GAAP EPS in the second quarter of 2024 also excludes a tax benefit due to a reduction in reserves for unrecognized income tax benefits, resulting from the expiration of the statute of limitations for assessments related to the 2019 federal tax return year.
Year-to-date results can be found in the attached tables.
Second-Quarter Sales Performance The following table reflects sales of the Company’s top products and significant performance drivers.
Second Quarter
$ in millions
2025
2024
Change
Change Ex- Exchange
Commentary
Total Sales
$15,806
$16,112
-2%
-2%
Pharmaceutical
14,050
14,408
-2%
-3%
Decline primarily due to vaccines and immunology, partially offset by growth in oncology and cardiology.
KEYTRUDA
7,956
7,270
9%
9%
Growth driven by continued strong global demand from metastatic indications, including bladder, endometrial and gastric cancers, and increased global uptake in earlier-stage indications, including triple-negative breast cancer, renal cell carcinoma (RCC) and cervical cancer, as well as non-small cell lung cancer in the U.S.
GARDASIL/GARDASIL 9
1,126
2,478
-55%
-55%
Decline primarily due to lower demand in China. Excluding China, sales declined 3%, or 4% excluding impact of foreign exchange, reflecting lower demand in Japan following a national catch-up immunization program, as well as timing of public-sector purchases in certain international markets. U.S. sales increased 2% in the quarter.
JANUVIA/JANUMET
623
629
-1%
-
Decrease primarily attributable to lower demand in China, impacts of generic competition in most international markets, and lower demand in the U.S. due to competitive pressure, which were largely offset by higher net pricing in the U.S.
PROQUAD, M-M-R II and VARIVAX
609
617
-1%
-2%
Decrease primarily reflects lower U.S. sales due to unfavorable VARIVAX public-sector activity and M-M-R II private-sector buy-out, partially offset by partial replenishment of PROQUAD doses borrowed from the U.S. Centers for Disease Control and Prevention (CDC) Pediatric Vaccine Stockpile, and higher pricing.
BRIDION
461
455
1%
1%
Increase primarily due to higher demand in the U.S., partially offset by lower demand in most international markets due to ongoing generic competition.
Lynparza*
370
317
17%
15%
Growth primarily due to higher demand in the U.S. and certain international markets.
WINREVAIR
336
70
N/M
N/M
Growth reflects continued uptake since second-quarter 2024 launch in the U.S.
Lenvima*
265
249
6%
5%
Increase primarily due to higher sales in the U.S. reflecting higher demand, partially offset by lower pricing.
VAXNEUVANCE
229
189
21%
20%
Growth primarily due to favorable public-sector activity in the U.S. and increased demand in certain international markets, partially offset by lower demand in the U.S. and Japan due to competitive pressure.
PREVYMIS
228
188
21%
20%
Growth primarily due to higher demand in the U.S. and Europe, partially offset by lower demand in China due to generic competition.
WELIREG
162
126
29%
29%
Growth primarily driven by higher demand in the U.S. and early launch uptake in certain EU markets, partially offset by lower pricing in the U.S.
CAPVAXIVE
129
-
-
-
Represents continued uptake since third-quarter 2024 launch in the U.S.
SIMPONI
-
172
-100%
-100%
Marketing rights in former territories of the Company reverted to Johnson & Johnson on Oct. 1, 2024.
Animal Health
1,646
1,482
11%
11%
Growth primarily due to higher demand for Livestock products, as well as inclusion of sales from Elanco aqua business acquired in July 2024, higher pricing and improved supply.
Livestock
961
837
15%
16%
Growth primarily driven by higher demand across all species, as well as inclusion of sales from Elanco aqua business acquired in July 2024.
Companion Animal
685
645
6%
6%
Increase primarily driven by higher pricing. Sales of BRAVECTO were $335 million and $331 million in current and prior year quarters, respectively, which represents an increase of 1%, both nominally and excluding impact of foreign exchange.
Other Revenues**
110
222
-50%
-3%
Primarily due to unfavorable impact of revenue-hedging activities.
*Alliance revenue for this product represents the Company’s share of profits, which are product sales net of cost of sales and commercialization costs.
**Other revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities.
N/M- Not meaningful.
Second-Quarter Expense, EPS and Related Information The table below presents selected expense information.
$ in millions
GAAP
Acquisition- and Divestiture- Related Costs4
Restructuring Costs
(Income) Loss From Investments in Equity Securities
Non- GAAP3
Second Quarter 2025
Cost of sales
$3,557
$576
$165
$-
$2,816
Selling, general and administrative
2,649
15
1
-
2,633
Research and development
4,048
3
53
-
3,992
Restructuring costs
560
-
560
-
-
Other (income) expense, net
(7)
-
-
(61)
54
Second Quarter 2024
Cost of sales
$3,745
$606
$66
$-
$3,073
Selling, general and administrative
2,739
24
31
-
2,684
Research and development
3,500
20
-
-
3,480
Restructuring costs
80
-
80
-
-
Other (income) expense, net
42
(17)
-
(49)
108
GAAP Expense, EPS and Related Information Gross margin was 77.5% for the second quarter of 2025 compared with 76.8% for the second quarter of 2024. The increase was primarily due to the favorable impact of product mix, partially offset by higher restructuring costs and inventory write-offs.
Selling, general and administrative (SG&A) expenses were $2.6 billion in the second quarter of 2025, a decrease of 3% compared with the second quarter of 2024. The decrease was primarily due to lower administrative, restructuring and promotional costs.
Research and development (R&D) expenses were $4.0 billion in the second quarter of 2025, an increase of 16% compared with the second quarter of 2024. The increase was primarily due to a $200 million charge for an upfront payment made in the second quarter of 2025 for a license agreement with Hengrui Pharma, increased clinical development spending, higher compensation and benefit costs, and higher restructuring costs.
Other (income) expense, net, was $7 million of income in the second quarter of 2025 compared with $42 million of expense in the second quarter of 2024.
The effective tax rate of 11.4% for the second quarter of 2025 includes a 2.9 percentage point favorable impact due to tax benefits primarily resulting from favorable audit adjustments.
GAAP EPS was $1.76 for the second quarter of 2025 compared with $2.14 for the second quarter of 2024. The decrease reflects increased operating expenses driven by higher restructuring costs and research and development spending, a charge related to the closing of a license agreement with Hengrui Pharma, unfavorable tax impacts, and the unfavorable impact of foreign exchange.
Non-GAAP Expense, EPS and Related Information Non-GAAP gross margin was 82.2% for the second quarter of 2025 compared with 80.9% for the second quarter of 2024. The increase was primarily due to the favorable impact of product mix, partially offset by higher inventory write-offs.
Non-GAAP SG&A expenses were $2.6 billion in the second quarter of 2025, a decrease of 2% compared with the second quarter of 2024. The decrease was primarily due to lower administrative and promotional costs.
Non-GAAP R&D expenses were $4.0 billion in the second quarter of 2025, an increase of 15% compared with the second quarter of 2024. The increase was primarily due to a $200 million charge for an upfront payment made in the second quarter of 2025 for a license agreement with Hengrui Pharma, increased clinical development spending, and higher compensation and benefit costs.
Non-GAAP other (income) expense, net, was $54 million of expense in the second quarter of 2025 compared with $108 million of expense in the second quarter of 2024.
The non-GAAP effective tax rate was 15.0% for the second quarter of 2025.
Non-GAAP EPS was $2.13 for the second quarter of 2025 compared with $2.28 for the second quarter of 2024. The decrease reflects increased operating expenses driven by higher research and development spending, a charge related to the closing of a license agreement with Hengrui Pharma, and the unfavorable impact of foreign exchange.
A reconciliation of GAAP to non-GAAP net income and EPS is provided in the table that follows.
Second Quarter
$ in millions, except EPS amounts
2025
2024
EPS
GAAP EPS
$1.76
$2.14
Difference
0.37
0.14
Non-GAAP EPS that excludes items listed below3
$2.13
$2.28
Net Income
GAAP net income2
$4,427
$5,455
Difference
939
354
Non-GAAP net income that excludes items listed below2,3
$5,366
$5,809
Excluded Items:
Acquisition- and divestiture-related costs4
$594
$633
Restructuring costs
779
177
Income from investments in equity securities
(61)
(49)
Decrease to net income before taxes
1,312
761
Estimated income tax (benefit) expense5
(373)
(407)
Decrease to net income
$939
$354
Planned Acquisition of Verona Pharma On July 9, 2025, the Company furthered its science-led business development strategy by announcing an agreement under which the Company, through a subsidiary, will acquire Verona Pharma plc (Verona Pharma) for $107 per American Depository Share, each of which represents eight Verona Pharma ordinary shares, for a total transaction value of approximately $10 billion. Through the acquisition, the Company will add Ohtuvayre, a first-in-class selective dual inhibitor of phosphodiesterase 3 and 4 (PDE3 and PDE4), to its growing cardio-pulmonary pipeline and portfolio.
The U.S. Food and Drug Administration (FDA) approved Ohtuvayre in June 2024 for the maintenance treatment of chronic obstructive pulmonary disease (COPD) in adult patients. It is the first novel inhaled mechanism for the treatment of COPD in more than 20 years. The transaction is anticipated to close in the fourth quarter of 2025.
Pipeline and Portfolio Highlights In the second quarter, the Company continued to advance its broad and diverse pipeline with multiple regulatory and clinical milestones.
In oncology, the FDA approved KEYTRUDA as part of a therapy regimen for the treatment of certain adult patients with resectable locally advanced head and neck squamous cell carcinoma (HNSCC), based on results from the Phase 3 KEYNOTE-689 trial. This approval is the first perioperative anti-PD-1 treatment regimen for adults with resectable locally advanced HNSCC whose tumors express PD-L1 (CPS ≥1). In addition, the Ministry of Health, Labor and Welfare (MHLW) in Japan approved WELIREG as monotherapy for the treatment of adults with von Hippel-Lindau (VHL) disease-associated tumors, and for adults with unresectable or metastatic RCC that has progressed after chemotherapy.
At the 2025 American Society of Clinical Oncology Annual Meeting, the Company announced new research across more than 25 types of cancer in multiple treatment settings. Data were presented for several candidates, including MK-1084, an investigational oral selective KRAS G12C inhibitor, and from the Company’s pipeline of antibody-drug conjugates (ADCs). The Company also presented data from Phase 3 trials evaluating new combination regimens with KEYTRUDA, and longer-term data for studies of KEYTRUDA and WELIREG, with the KEYTRUDA studies including people with earlier stages of cancer.
The Company announced results from the Phase 3 KEYNOTE-B96 trial (also known as ENGOT-ov65) evaluating KEYTRUDA plus chemotherapy, which met its primary endpoint of progression-free survival (PFS) for the treatment of patients with platinum-resistant recurrent ovarian cancer whose tumors express PD-L1 and in all comers, as well as a secondary endpoint of overall survival (OS) in patients whose tumors express PD-L1. In addition, a pre-specified interim analysis of the Phase 3 KEYNOTE-937 study found that compared to placebo, KEYTRUDA did not show a statistically significant improvement in the primary endpoint of recurrence-free survival for certain patients with hepatocellular carcinoma. Also, a pre-specified interim analysis of the Phase 3 LEAP-014 trial found that KEYTRUDA plus Lenvima, in combination with platinum-based chemotherapy, did not show a statistically significant improvement in its primary endpoint of OS compared to KEYTRUDA plus chemotherapy for the first-line treatment of patients with metastatic esophageal squamous cell carcinoma (ESCC).
In vaccines and infectious diseases, the Company received FDA approval of ENFLONSIA for the prevention of respiratory syncytial virus (RSV) lower respiratory tract disease in newborns and infants who are born during or entering their first RSV season. ENFLONSIA is the first and only RSV preventive option administered to infants using the same dose regardless of weight. The CDC’s Advisory Committee on Immunization Practices (ACIP) also recommended ENFLONSIA for the prevention of RSV in infants younger than 8 months of age born during or entering their first RSV season. In addition, the Company announced initiation of the MOBILIZE-1 Phase 3 trial evaluating V181, an investigational single-dose quadrivalent vaccine for the prevention of dengue disease.
In addition, the FDA accepted a New Drug Application (NDA) for doravirine/islatravir, an investigational, once-daily, oral, two-drug regimen for the treatment of adults with virologically suppressed HIV-1 based on the Phase 3 MK-8591A-051 and MK-8591A-052 trials. The FDA set a Prescription Drug User Fee Act (PDUFA) date of April 28, 2026. The Company also announced the initiation of the EXPrESSIVE Phase 3 trials for MK-8527, its investigational once-monthly oral candidate for HIV pre-exposure prophylaxis (PrEP).
In cardiovascular disease, the Company announced positive topline results from Phase 3 CORALreef HeFH and CORALreef AddOn, the first two of three Phase 3 clinical trials evaluating the safety and efficacy of enlicitide decanoate, an investigational, oral proprotein convertase subtilisin/kexin type 9 (PCSK9) inhibitor being evaluated for the treatment of adults with hyperlipidemia already on lipid-lowering therapies, including at least a statin. In both trials, enlicitide demonstrated statistically significant and clinically meaningful reductions in low-density lipoprotein cholesterol. If approved, it would be the first marketed oral PCSK9 inhibitor.
In addition, the FDA granted priority review for a new supplemental Biologics License Application for WINREVAIR seeking approval to update the U.S. product label based on compelling results from the Phase 3 ZENITH trial. The FDA has set a PDUFA date of Oct. 25, 2025. The Company also provided an update on the Phase 3 HYPERION study evaluating WINREVAIR in recently diagnosed adults with pulmonary arterial hypertension (PAH). In the study, WINREVAIR added on top of background therapy within 12 months after initial diagnosis of PAH demonstrated a statistically significant and clinically meaningful reduction in the risk of clinical worsening events when compared to placebo. Further, the MHLW in Japan approved sotatercept for the treatment of adults with PAH under the trademark AIRWIN. It is the first activin signaling inhibitor therapy for PAH approved in Japan.
In the Animal Health business, the FDA approved BRAVECTO QUANTUM, an injectable formulation of BRAVECTO for dogs for the treatment and persistent killing of fleas and ticks. In addition, the European Commission (EC) approved NUMELVI tablets for dogs, a once-daily, second-generation Janus kinase (JAK) inhibitor, indicated for the treatment of pruritus associated with allergic dermatitis including atopic dermatitis and treatment of clinical manifestations of atopic dermatitis.
Notable recent news releases on the Company’s pipeline and portfolio are provided in the table that follows. Visit the News Releases section of the Company’s website to read the releases*.
Oncology
FDA Approved KEYTRUDA for PD-L1+ Resectable Locally Advanced HNSCC as Neoadjuvant Treatment, Continued as Adjuvant Treatment Combined With Radiotherapy With or Without Cisplatin Then as a Single Agent; Based on Results From Phase 3 KEYNOTE-689 Trial
FDA Approved WELIREG for Treatment of Adults and Pediatric Patients 12 Years and Older With Locally Advanced, Unresectable, or Metastatic Pheochromocytoma or Paraganglioma; Based on Results From Phase 2 LITESPARK-015 Clinical Trial
Phase 3 KEYNOTE-B96 Trial Met Primary Endpoint of PFS in Patients With Platinum-Resistant Recurrent Ovarian Cancer Whose Tumors Expressed PD-L1 and in All Comers
KEYTRUDA Plus Trodelvy Reduced Risk of Disease Progression or Death by 35% Versus KEYTRUDA Plus Chemotherapy in First-Line PD-L1+ Metastatic Triple-Negative Breast Cancer; Based on Results From Phase 3 ASCENT-04/KEYNOTE-D19 Trial
MK-1084, an Investigational KRAS G12C Inhibitor, Showed Antitumor Activity in Phase 1 Trial of Patients With Advanced Colorectal Cancer and Non-Small Cell Lung Cancer Whose Tumors Harbor KRAS G12C Mutations
Investigational Zilovertamab Vedotin at 1.75 mg/kg Dose Plus Standard of Care Showed Promising Antitumor Activity, Including Complete Response Rate, in Patients With Relapsed/Refractory Diffuse Large B-Cell Lymphoma; Based on Results From Phase 2 WaveLINE-003 Trial
IDeate-Prostate01 Phase 3 Trial of Ifinatamab Deruxtecan Initiated in Patients With Pretreated Metastatic Castration-Resistant Prostate Cancer
IDeate-Esophageal01 Phase 3 Trial of Ifinatamab Deruxtecan Initiated in Certain Patients With Pretreated Advanced or Metastatic ESCC
Vaccines and Infectious Diseases
FDA Approved ENFLONSIA for Prevention of RSV Lower Respiratory Tract Disease in Infants Born During or Entering Their First RSV Season; Based on Results From Phase 2b/3 CLEVER Trial
ACIP Recommended Use of ENFLONSIA for Prevention of RSV Lower Respiratory Tract Disease in Infants Younger Than 8 Months of Age Born During or Entering Their First RSV Season
FDA Accepted NDA for Doravirine/Islatravir, an Investigational, Once-Daily, Oral, Two-Drug Regimen for Treatment of Adults With Virologically Suppressed HIV-1; Based on Results From Phase 3 MK-8591A-051 and MK-8591A-052 Trials; FDA Set PDUFA Date of April 28, 2026
EXPrESSIVE Phase 3 Trials Initiated for Investigational Once-Monthly HIV Prevention Pill, MK-8527
The Company Initiated MOBILIZE-1 Phase 3 Study Evaluating Dengue Vaccine Candidate
Cardiovascular
FDA Granted Priority Review for WINREVAIR to Update Label Based on Results From ZENITH Trial; FDA Set PDUFA Date of Oct. 25, 2025
The Company Announced Positive Topline Results From First Two Phase 3 CORALreef Trials Evaluating Enlicitide Decanoate for the Treatment of Adults With Hyperlipidemia
Phase 3 HYPERION Study of WINREVAIR Met Primary Endpoint in Recently Diagnosed Adults With PAH
Animal Health
FDA Approved BRAVECTO QUANTUM
EC Approved NUMELVI Tablets for Dogs
*References to the Company’s name in the above news release titles have been modified for the purpose of this announcement.
New Multiyear Optimization Initiative, Which Includes a Restructuring Program The Company launched a new multiyear optimization initiative to enable the transformation of its portfolio by generating an expected $3.0 billion in annual cost savings from productivity actions, which will be fully reinvested to support new product launches and its pipeline across multiple therapeutic areas.
In July 2025, as part of this initiative, the Company approved a new restructuring program, in which it expects to eliminate certain administrative, sales and R&D positions. The Company will, however, continue to hire employees into new roles across strategic growth areas of the business. In addition, the Company will reduce its global real estate footprint and continue to optimize its manufacturing network, aligning the geography of its global manufacturing to its customers and reflecting changes in the Company’s business.
The Company anticipates cumulative pretax costs related to the program to be approximately $3.0 billion. For the second quarter of 2025, the Company recorded charges in its GAAP results of $649 million related to this restructuring program.
The Company expects the actions under the restructuring program to result in annual cost savings of approximately $1.7 billion, which will be substantially realized by the end of 2027. This restructuring program is part of the multiyear optimization initiative expected to achieve $3.0 billion in annual cost savings by the end of 2027.
Manufacturing and R&D Investment The Company continued to make long-term investments in its U.S. manufacturing and R&D capabilities. This includes the start of construction for a $1.0 billion, 470,000-square-foot state-of-the-art biologics center of excellence in Wilmington, Delaware, which will serve as a launch and commercial production facility and the primary U.S. manufacturing site for KEYTRUDA. In addition, the Company announced an $895 million expansion of its Animal Health manufacturing facility in De Soto, Kansas; the 200,000-square-foot facility will increase capacity for Animal Health vaccines and biologic products.
Full-Year 2025 Financial Outlook The following table summarizes the Company’s full-year financial outlook.
Full Year 2025
Updated
Prior
Sales*
$64.3 billion to $65.3 billion
$64.1 billion to $65.6 billion
Non-GAAP Gross margin3
Approximately 82%
Approximately 82%
Non-GAAPOperating expenses3**
$25.6 billion to $26.4 billion
$25.6 billion to $26.6 billion
Non-GAAPOther (income) expense, net3
$300 million to $400 million expense
$300 million to $400 million expense
Non-GAAPEffective tax rate3
15.0% to 16.0%
15.5% to 16.5%
Non-GAAPEPS3***
$8.87 to $8.97
$8.82 to $8.97
Share count (assuming dilution)
Approximately 2.51 billion
Approximately 2.51 billion
*The Company does not have any non-GAAP adjustments to sales.
**Includes one-time R&D charges of $300 million for a milestone payment to LaNova Medicines Ltd. (LaNova) associated with the technology transfer for MK-2010 expected to be recorded in the third quarter of 2025 and $200 million for the upfront payment for the license agreement completed with Hengrui Pharma in the second quarter of 2025.
Outlook does not assume any additional significant potential business development transactions.
***Includes one-time charges totaling $0.16 per share associated with the payment for the LaNova technology transfer for MK-2010 and upfront payment to Hengrui Pharma.
The Company has not provided a reconciliation of forward-looking non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other (income) expense, net, non-GAAP effective tax rate and non-GAAP EPS to the most directly comparable GAAP measures, given it cannot predict with reasonable certainty the amounts necessary for such a reconciliation, including intangible asset impairment charges, legal settlements, and income and losses from investments in equity securities either owned directly or through ownership interests in investment funds, without unreasonable effort. These items are inherently difficult to forecast and could have a significant impact on the Company’s future GAAP results.
The Company now expects full-year 2025 sales to be between $64.3 billion and $65.3 billion, including a revised negative impact of foreign exchange of approximately 0.5% at mid-July 2025 exchange rates.
The Company now expects its full-year non-GAAP effective income tax rate to be between 15.0% and 16.0%.
The Company now expects its full-year non-GAAP EPS to be between $8.87 and $8.97, including a revised negative impact of foreign exchange of approximately $0.15 per share. This revised non-GAAP EPS range continues to reflect the impacts of a one-time charge of $200 million (recorded in the second quarter of 2025) for an upfront payment made in connection with the closing of a license agreement with Hengrui Pharma and the one-time charge of $300 million (to be recorded in the third quarter of 2025) related to a payment to LaNova for the completion of the technology transfer for MK-2010, which will impact EPS by approximately $0.16 in the aggregate. In 2024, non-GAAP EPS of $7.65 was negatively impacted by a net charge of $1.28 per share related to certain asset acquisitions, licensing agreements and collaborations.
The financial outlook does not include the anticipated impact of the announced acquisition of Verona Pharma.
Consistent with past practice, the financial outlook does not assume additional significant potential business development transactions.
The $200 million of costs previously included in the Company’s financial outlook related to the impact of tariffs is unchanged pending the outcome of additional potential government actions.
Earnings Conference Call Investors, journalists and the general public may access a live audio webcast of the call on Tuesday, July 29, at 9 a.m. ET via this weblink. A replay of the webcast, along with the sales and earnings news release, supplemental financial disclosures and slides highlighting the results, will be available on the Company’s website.
All participants may join the call by dialing (800) 369-3351 (U.S. and Canada Toll-Free) or (517) 308-9448 and using the access code 9818590.
About Our Company At Merck & Co., Inc., Rahway, N.J., USA, known as MSD outside of the United States and Canada, we are unified around our purpose: We use the power of leading-edge science to save and improve lives around the world. For more than 130 years, we have brought hope to humanity through the development of important medicines and vaccines. We aspire to be the premier research-intensive biopharmaceutical company in the world – and today, we are at the forefront of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. We foster a diverse and inclusive global workforce and operate responsibly every day to enable a safe, sustainable and healthy future for all people and communities.
Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J., USA This news release of Merck & Co., Inc., Rahway, N.J., USA (the “Company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to pipeline candidates that the candidates will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.
Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the Company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the Company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.
The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and the Company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).
Appendix Generic product names are provided below.
Pharmaceutical BRIDION (sugammadex) CAPVAXIVE (Pneumococcal 21-valent Conjugate Vaccine) ENFLONSIA (clesrovimab-cfor) GARDASIL (Human Papillomavirus Quadrivalent [Types 6, 11, 16 and 18] Vaccine, Recombinant) GARDASIL 9 (Human Papillomavirus 9-valent Vaccine, Recombinant) JANUMET (sitagliptin and metformin HCl) JANUVIA (sitagliptin) KEYTRUDA (pembrolizumab) Lenvima (lenvatinib) Lynparza (olaparib) M-M-R II (Measles, Mumps and Rubella Virus Vaccine Live) PREVYMIS (letermovir) PROQUAD (Measles, Mumps, Rubella and Varicella Virus Vaccine Live) SIMPONI (golimumab) VARIVAX (Varicella Virus Vaccine Live) VAXNEUVANCE (Pneumococcal 15-valent Conjugate Vaccine) WELIREG (belzutifan) WINREVAIR (sotatercept-csrk)
Animal Health BRAVECTO (fluralaner) BRAVECTO QUANTUM (fluralaner for extended-release injectable suspension) NUMELVI (atinvicitinib)
1 All trademarks are property of their respective owners.
2 Net income attributable to the Company.
3 The Company is providing certain 2025 and 2024 non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. Management believes that providing this information enhances investors’ understanding of the Company’s results because management uses non-GAAP results to assess performance. Management uses non-GAAP measures internally for planning and forecasting purposes and to measure the performance of the Company along with other metrics. In addition, annual employee compensation, including senior management’s compensation, is derived in part using a non-GAAP pretax income metric. This information should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. For a description of the non-GAAP adjustments, see Table 2a attached to this release.
4 Reflects expenses related to business combinations, including the amortization of intangible assets, intangible asset impairment charges, and expense or income related to changes in the estimated fair value measurement of liabilities for contingent consideration. Also includes integration, transaction and certain other costs associated with acquisitions and divestitures, as well as amortization of intangible assets related to collaborations and licensing arrangements.
5 Includes the estimated tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments for both periods presented. Amount in the second quarter of 2025 also includes a $146 million benefit primarily resulting from favorable audit adjustments. Amount in the second quarter of 2024 also includes a $259 million benefit due to a reduction in reserves for unrecognized income tax benefits resulting from the expiration of the statute of limitations for assessments related to the 2019 federal tax return year.
GAAP
% Change
GAAP
% Change
2Q25
2Q24
June YTD 2025
June YTD 2024
$
15,806
$
16,112
-2%
$
31,335
$
31,887
-2%
3,557
3,745
-5%
6,976
7,285
-4%
2,649
2,739
-3%
5,202
5,221
0%
4,048
3,500
16%
7,669
7,492
2%
560
80
*
629
202
*
(7
)
42
*
(43
)
12
*
4,999
6,006
-17%
10,902
11,675
-7%
571
545
1,388
1,447
4,428
5,461
-19%
9,514
10,228
-7%
1
6
8
11
$
4,427
$
5,455
-19%
$
9,506
$
10,217
-7%
$
1.76
$
2.14
-18%
$
3.77
$
4.02
-6%
2,513
2,544
2,522
2,544
11.4
%
9.1
%
12.7
%
12.4
%
$
3,557
576
165
741
$
2,816
2,649
15
1
16
2,633
4,048
3
53
56
3,992
560
560
560
–
(7
)
(61
)
(61
)
54
4,999
(594
)
(779
)
61
(1,312
)
6,311
571
(102
)
(3)
(139
)
(3)
14
(3)
(146
)
(4)
(373
)
944
4,428
(492
)
(640
)
47
146
(939
)
5,367
4,427
(492
)
(640
)
47
146
(939
)
5,366
$
1.76
(0.20
)
(0.25
)
0.02
0.06
(0.37
)
$
2.13
11.4
%
15.0
%
$
6,976
1,196
201
1,397
$
5,579
5,202
38
1
39
5,163
7,669
10
53
63
7,606
629
629
629
–
(43
)
(3
)
(168
)
(171
)
128
10,902
(1,241
)
(884
)
168
(1,957
)
12,859
1,388
(219
)
(3)
(157
)
(3)
36
(3)
(146
)
(4)
(486
)
1,874
9,514
(1,022
)
(727
)
132
146
(1,471
)
10,985
9,506
(1,022
)
(727
)
132
146
(1,471
)
10,977
$
3.77
(0.40
)
(0.29
)
0.05
0.06
(0.58
)
$
4.35
12.7
%
14.6
%
2025
2024
2Q
June YTD
1Q
2Q
June YTD
1Q
2Q
June YTD
3Q
4Q
Full Year
Nom %
Ex-Exch %
Nom %
Ex-Exch %
$15,529
$15,806
$31,335
$15,775
$16,112
$31,887
$16,657
$15,624
$64,168
-2
-2
-2
0
13,638
14,050
27,688
14,006
14,408
28,415
14,943
14,042
57,400
-2
-3
-3
-2
7,205
7,956
15,161
6,947
7,270
14,217
7,429
7,836
29,482
9
9
7
8
312
370
682
292
317
609
337
365
1,311
17
15
12
12
258
265
523
255
249
504
251
255
1,010
6
5
4
4
137
162
300
85
126
211
139
160
509
29
29
42
43
119
107
226
71
90
161
100
110
371
19
19
40
40
1,327
1,126
2,453
2,249
2,478
4,727
2,306
1,550
8,583
-55
-55
-48
-48
539
609
1,148
570
617
1,187
703
594
2,485
-1
-2
-3
-3
230
229
459
219
189
408
239
161
808
21
20
13
13
228
121
349
216
163
379
193
139
711
-26
-26
-8
-7
107
129
236
47
50
97
-
-
-
-
41
38
79
61
59
120
68
74
263
-36
-37
-35
-33
441
461
902
440
455
895
420
449
1,764
1
1
1
1
208
228
436
174
188
362
208
215
785
21
20
20
21
83
96
179
73
92
165
96
79
340
5
5
8
9
70
74
145
56
62
118
64
70
252
21
21
23
24
280
336
615
70
70
149
200
419
106
123
229
98
106
203
102
109
415
16
16
12
12
68
80
147
70
72
142
72
73
287
10
6
4
4
102
83
185
350
110
460
383
121
964
-25
-27
-60
-59
90
86
176
111
89
200
102
92
394
-3
-4
-12
-11
67
83
150
56
60
116
65
69
249
40
35
30
30
45
41
86
42
39
81
42
40
163
5
4
6
6
50
40
90
46
53
99
78
45
222
-24
-26
-9
-8
184
172
356
189
543
-100
-100
-100
-100
39
35
74
41
114
-100
-100
-100
-100
549
372
921
419
405
824
278
232
1,334
-8
-8
12
13
247
251
498
251
224
475
204
255
935
12
14
5
8
729
584
1,313
632
618
1,252
638
699
2,590
-6
-7
5
6
1,588
1,646
3,234
1,511
1,482
2,993
1,487
1,397
5,877
11
11
8
11
924
961
1,885
850
837
1,686
886
889
3,462
15
16
12
16
664
685
1,349
661
645
1,307
601
508
2,415
6
6
3
4
303
110
413
258
222
479
227
185
891
-50
-3
-14
7
Media Contacts: Michael Levey michael.levey@msd.com Johanna Herrmann johanna.herrmann@msd.com
Investor Contacts: Peter Dannenbaum (732) 594-1579 Steven Graziano (732) 594-1583
