- Total Worldwide Sales Were $16.7 Billion, an Increase of 4%
From Third Quarter 2023; Excluding the Impact of Foreign Exchange,
Growth Was 7%
- KEYTRUDA Sales Grew 17% to $7.4 Billion; Excluding the Impact
of Foreign Exchange, Sales Grew 21%
- WINREVAIR Sales Were $149 Million; U.S. Launch of WINREVAIR
Gaining Momentum; Received Approval in the EU
- Animal Health Sales Grew 6% to $1.5 Billion; Excluding the
Impact of Foreign Exchange, Sales Grew 11%
- GAAP EPS Was $1.24; Non-GAAP EPS Was $1.57; GAAP and Non-GAAP
EPS Include a Net Charge of $0.79 per Share Related to Certain
Business Development Transactions
- Achieved Significant Milestones in Vaccine Programs
- CAPVAXIVE Recommended by the CDC’s ACIP for Pneumococcal
Vaccination in Adults 50 Years of Age and Older
- Presented Positive Results From Clinical Studies Evaluating
Clesrovimab (MK-1654), an Investigational RSV Preventative
Monoclonal Antibody for Infants Entering Their First RSV
Season
- Data Presented for Four Approved Medicines and Six Pipeline
Candidates in More Than 20 Types of Cancer at ESMO Congress 2024,
Including Overall Survival Data From KEYNOTE-522 and
KEYNOTE-A18
- Completed Acquisition of Investigational B-Cell Depletion
Therapy, CN201 (MK-1045), From Curon Biopharmaceutical
- Full-Year 2024 Financial Outlook
- Narrows Expected Worldwide Sales Range To Be Between $63.6
Billion and $64.1 Billion
- Now Expects Non-GAAP EPS To Be Between $7.72 and $7.77; Outlook
Reflects a Net Negative Impact of $0.24 per Share Related to
Business Development Transactions With Curon Biopharmaceutical and
Daiichi Sankyo
Merck (NYSE: MRK), known as MSD outside the United States and
Canada, today announced financial results for the third quarter of
2024.
“Our third-quarter results were strong, as we continue to make
progress heading into 2025 and beyond," said Robert M. Davis,
chairman and chief executive officer, Merck. "Our pipeline is
advancing and expanding, demonstrating our success in creating a
sustainable innovation engine, and positioning Merck with a more
diversified portfolio to drive growth. I continue to remain
confident in the strength of our business and our ability to
execute, and I want to thank our colleagues across the globe for
their focus and commitment as we work to create lasting value for
patients, shareholders and all our stakeholders.”
Financial Summary
$ in millions, except EPS amounts
Third Quarter
2024
2023
Change
Change Ex-
Exchange
Sales
$16,657
$15,962
4%
7%
GAAP net income1
3,157
4,745
-33%
-30%
Non-GAAP net income that excludes certain
items1,2*
3,985
5,427
-27%
-23%
GAAP EPS
1.24
1.86
-33%
-30%
Non-GAAP EPS that excludes certain
items2*
1.57
2.13
-26%
-23%
*Refer to table on page 7.
In the third quarter of 2024, total worldwide sales were $16.7
billion, an increase of 4% compared with the third quarter of 2023;
excluding the impact of foreign exchange, growth was 7%. Sales
growth in the third quarter of 2024 was primarily due to increased
usage of KEYTRUDA globally, contributions from new launches,
including WINREVAIR and CAPVAXIVE, and strong growth in Merck’s
Animal Health business. Revenue growth in the third quarter of 2024
was partially offset by lower sales of JANUVIA and JANUMET, lower
combined sales of GARDASIL/GARDASIL 9 and lower sales of LAGEVRIO.
Third-quarter GARDASIL/GARDASIL 9 sales declined year-over-year due
to reduced demand in China; outside of China, the company achieved
double-digit sales growth for GARDASIL/GARDASIL 9 in almost every
major region globally.
For the third quarter of 2024, Generally Accepted Accounting
Principles (GAAP) earnings per share (EPS) assuming dilution was
$1.24 and non-GAAP EPS was $1.57. The declines in GAAP and Non-GAAP
EPS in the third quarter of 2024 versus the prior year were largely
due to a net charge of $0.79 per share in the aggregate for the
acquisition of Eyebiotech Limited (EyeBio) and a related
development milestone, the acquisition of CN201 (now known as
MK-1045) from Curon Biopharmaceutical (Curon), as well as a payment
received from Daiichi Sankyo related to the expansion of the
existing development and commercialization agreement. There were no
significant business development transaction charges in the third
quarter of 2023.
Non-GAAP EPS in both periods excludes acquisition- and
divestiture-related costs, costs related to restructuring programs,
as well as income and losses from investments in equity
securities.
Year-to-date results can be found in the attached tables.
Third-Quarter Sales
Performance
The following table reflects sales of the company’s top products
and significant performance drivers.
Third Quarter
$ in millions
2024
2023
Change
Change Ex- Exchange
Commentary
Total Sales
$16,657
$15,962
4%
7%
Approximately 2 percentage points of the
negative impact of foreign exchange was due to devaluation of
Argentine peso, which was largely offset by inflation-related price
increases, consistent with practice in that market.
Pharmaceutical
14,943
14,263
5%
8%
Increase driven by growth in oncology and
cardiovascular, partially offset by declines in diabetes, vaccines
and virology.
KEYTRUDA
7,429
6,338
17%
21%
Growth driven by increased global uptake
in earlier-stage indications, including triple-negative breast
cancer (TNBC), renal cell carcinoma (RCC) and non-small cell lung
cancer (NSCLC), as well as continued strong global demand from
metastatic indications. Approximately 3 percentage points of the
negative impact of foreign exchange was due to devaluation of
Argentine peso, which was largely offset by inflation-related price
increases.
GARDASIL/GARDASIL 9
2,306
2,585
-11%
-10%
Decline primarily due to lower demand in
China compared with prior year, partially offset by higher sales in
the U.S., driven by public-sector buying patterns, higher pricing
and demand, as well as higher demand in most international
regions.
PROQUAD, M-M-R II and VARIVAX
703
713
-1%
-1%
Decline primarily due to timing of
shipments and lower tenders in Latin America, largely offset by
higher demand in certain international markets.
JANUVIA/JANUMET
482
835
-42%
-38%
Decline primarily due to lower pricing in
the U.S., as well as ongoing generic competition in many
international markets.
BRIDION
420
424
-1%
0%
Relatively flat compared with prior year
due to generic competition in certain international markets,
particularly in Europe and Japan, largely offset by higher demand
and pricing in the U.S.
LAGEVRIO
383
640
-40%
-36%
Decline primarily due to lower demand in
Japan, partially offset by uptake from commercial launch in the
U.S.
Lynparza*
337
299
13%
13%
Growth primarily due to higher global
demand.
Lenvima*
251
260
-3%
-4%
Decline primarily due to timing of
shipments in China in the prior year, partially offset by higher
demand in the U.S.
VAXNEUVANCE
239
214
12%
13%
Growth largely driven by continued uptake
from launches in Europe and Japan, partially offset by lower demand
in the U.S. due to competition.
PREVYMIS
208
157
32%
36%
Growth primarily due to higher global
demand, particularly in the U.S.
ROTATEQ
193
156
24%
25%
Growth primarily due to public-sector
buying patterns in the U.S. and timing of shipments in China.
WINREVAIR
149
-
-
-
Represents continued uptake since launch
in the U.S. in the second quarter.
WELIREG
139
54
156%
157%
Growth primarily driven by higher demand
in the U.S., largely attributable to ongoing uptake of a new
indication.
Animal Health
1,487
1,400
6%
11%
Growth primarily driven by higher demand
and pricing for both Companion Animal and Livestock product
portfolios, as well as sales related to July 2024 acquisition of
Elanco aqua business. Approximately 2 percentage points of the
negative impact of foreign exchange was due to devaluation of
Argentine peso, which was largely offset by inflation-related price
increases.
Livestock
886
874
1%
7%
Growth primarily driven by higher pricing
and higher demand for poultry and swine products, as well as sales
related to acquisition of Elanco aqua business.
Companion Animal
601
526
14%
17%
Growth primarily driven by uptake from new
product launches, including the injectable formulation of BRAVECTO
in certain international markets, as well as higher pricing across
product portfolio. Sales of BRAVECTO were $266 million and $235
million in current and prior year quarters, respectively, which
represented growth of 13%, or 16% excluding impact of foreign
exchange.
Other Revenues**
227
299
-24%
-22%
Decline primarily due to lower payments
received for out-licensing arrangements and lower royalty
income.
*Alliance revenue for this
product represents Merck’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.
Third-Quarter Expense, EPS and Related
Information
The table below presents selected expense information.
$ in millions
GAAP
Acquisition- and Divestiture-
Related Costs3
Restructuring Costs
(Income) Loss From Investments
in Equity Securities
Non- GAAP2
Third Quarter 2024
Cost of sales
$4,080
$639
$192
$-
$3,249
Selling, general and administrative
2,731
43
31
-
2,657
Research and development
5,862
24
-
-
5,838
Restructuring costs
56
-
56
-
-
Other (income) expense, net
(162)
(27)
-
58
(193)
Third Quarter 2023
Cost of sales
$4,264
$552
$33
$-
$3,679
Selling, general and administrative
2,519
17
40
-
2,462
Research and development
3,307
10
-
-
3,297
Restructuring costs
126
-
126
-
-
Other (income) expense, net
126
(24)
-
17
133
GAAP Expense, EPS and Related
Information
Gross margin was 75.5% for the third quarter of 2024 compared
with 73.3% for the third quarter of 2023. The increase was
primarily due to the favorable impact of product mix (including
lower royalty rates related to KEYTRUDA and GARDASIL/GARDASIL 9),
partially offset by higher restructuring costs (primarily
reflecting asset impairment charges), as well as higher
amortization of intangible assets.
Selling, general and administrative (SG&A) expenses were
$2.7 billion in the third quarter of 2024, an increase of 8%
compared with the third quarter of 2023. The increase was primarily
due to higher administrative, promotional, selling, and
acquisition-related costs, partially offset by the favorable impact
of foreign exchange.
Research and development (R&D) expenses were $5.9 billion in
the third quarter of 2024, an increase of 77% compared with the
third quarter of 2023. The increase was primarily due to a charge
of $1.35 billion for the acquisition of EyeBio and a $100 million
charge for a related development milestone, as well as a charge of
$750 million to acquire CN201 (MK-1045) from Curon. The increase in
R&D expenses was also driven by higher compensation and benefit
costs, as well as higher clinical development spending. The
increase in R&D expenses was partially offset by the favorable
impact of foreign exchange.
Other (income) expense, net, was $162 million of income in the
third quarter of 2024 compared with $126 million of expense in the
third quarter of 2023. The favorability was primarily due to a $170
million payment received from Daiichi Sankyo related to the
expansion of the existing development and commercialization
agreement, lower exchange losses and lower net interest
expense.
The effective tax rate of 22.7% for the third quarter of 2024
includes a 7.2 percentage point combined unfavorable impact related
to the EyeBio and Curon transactions.
GAAP EPS was $1.24 for the third quarter of 2024 compared with
$1.86 for the third quarter of 2023. GAAP EPS in the third quarter
of 2024 includes a net charge of $0.79 per share in the aggregate
for the EyeBio, Curon and Daiichi Sankyo transactions. There were
no significant business development transaction charges in the
third quarter of 2023.
Non-GAAP Expense, EPS and Related
Information
Non-GAAP gross margin was 80.5% for the third quarter of 2024
compared with 77.0% for the third quarter of 2023. The increase was
primarily due to the favorable impact of product mix (including
lower royalty rates related to KEYTRUDA and GARDASIL/GARDASIL
9).
Non-GAAP SG&A expenses were $2.7 billion in the third
quarter of 2024, an increase of 8% compared with the third quarter
of 2023. The increase was primarily due to higher administrative,
promotional and selling costs, partially offset by the favorable
impact of foreign exchange.
Non-GAAP R&D expenses were $5.8 billion in the third quarter
of 2024, an increase of 77% compared with the third quarter of
2023. The increase was primarily due to a charge of $1.35 billion
for the acquisition of EyeBio and a $100 million charge for a
related development milestone, as well as a charge of $750 million
to acquire CN201 (MK-1045) from Curon. The increase in R&D
expenses was also driven by higher compensation and benefit costs,
as well as higher clinical development spending. The increase in
R&D expenses was partially offset by the favorable impact of
foreign exchange.
Non-GAAP other (income) expense, net, was $193 million of income
in the third quarter of 2024 compared with $133 million of expense
in the third quarter of 2023. The favorability was primarily due to
a $170 million payment received from Daiichi Sankyo related to the
expansion of the existing development and commercialization
agreement, lower exchange losses and lower net interest
expense.
The non-GAAP effective tax rate of 21.9% for the third quarter
of 2024 includes a 6.0 percentage point combined unfavorable impact
related to the EyeBio and Curon transactions.
Non-GAAP EPS was $1.57 for the third quarter of 2024 compared
with $2.13 for the third quarter of 2023. Non-GAAP EPS in the third
quarter of 2024 includes a net charge of $0.79 per share in the
aggregate for the EyeBio, Curon and Daiichi Sankyo transactions.
There were no significant business development transaction charges
in the third quarter of 2023.
A reconciliation of GAAP to non-GAAP net income and EPS is
provided in the table that follows.
Third Quarter
$ in millions, except EPS amounts
2024
2023
EPS
GAAP EPS
$1.24
$1.86
Difference
0.33
0.27
Non-GAAP EPS that excludes items listed
below2
$1.57
$2.13
Net Income
GAAP net income1
$3,157
$4,745
Difference
828
682
Non-GAAP net income that excludes items
listed below1,2
$3,985
$5,427
Excluded Items:
Acquisition- and divestiture-related
costs3
$679
$555
Restructuring costs
279
199
Loss from investments in equity
securities
58
17
Decrease to net income
1,016
771
Estimated income tax (benefit) expense
(188)
(89)
Decrease to net income
$828
$682
Pipeline and Portfolio
Highlights
In the third quarter, Merck continued to develop and augment its
strong, diverse pipeline and achieve key regulatory and clinical
milestones.
In cardiovascular disease, Merck continued to build on positive
momentum in its U.S. launch of WINREVAIR. As of the end of
September 2024, more than 3,700 patients have been prescribed
WINREVAIR. The company also received the European Commission’s (EC)
approval of WINREVAIR, in combination with other pulmonary arterial
hypertension (PAH) therapies, for the treatment of adult patients
with PAH with World Health Organization (WHO) functional Class II
to III. WINREVAIR is the first activin signaling inhibitor approved
for the treatment of PAH in Europe. WINREVAIR has launched in
Germany and Merck is working to obtain reimbursement for WINREVAIR
in other countries in the EU, which should occur in most other
major European markets in the second half of 2025.
In oncology, Merck continued to reinforce its leadership in
women’s and earlier stages of cancers and demonstrate progress in
its research pipeline. At the European Society for Medical Oncology
(ESMO) Congress 2024, three of the company’s data presentations
were highlighted during Presidential Symposium sessions. These
included overall survival (OS) data from the Phase 3 KEYNOTE-522
trial in high-risk, early-stage TNBC and from the Phase 3
KEYNOTE-A18 trial (also known as ENGOT-cx11/GOG-3047) in high-risk,
locally advanced cervical cancer. In addition, new positive data on
investigational candidates from Merck’s pipeline were presented,
including for patritumab deruxtecan (HER3-DXd), an antibody-drug
conjugate (ADC) being developed in collaboration with Daiichi
Sankyo, and for sacituzumab tirumotecan (sac-TMT), an anti-TROP2
ADC being developed in collaboration with Kelun-Biotech.
The company also achieved several regulatory milestones,
including new approvals for KEYTRUDA-based regimens in the U.S.,
Europe and Japan. In addition, Merck recently announced top-line
results from the KEYNOTE-689 trial, which marks the first positive
trial in two decades for patients with resected, locally advanced
head and neck squamous cell carcinoma (LA-HNSCC).
In vaccines, the CDC’s Advisory Committee on Immunization
Practices (ACIP) voted in October 2024 to recommend CAPVAXIVE for
individuals 50 to 64 years of age. This decision expanded upon the
initial unanimous recommendation in June 2024 for use of CAPVAXIVE
in adults age 65 and older, among other cohorts.
At IDWeek 2024, Merck presented positive results from the Phase
2b/3 trial of clesrovimab (MK-1654), an investigational respiratory
syncytial virus (RSV) preventative monoclonal antibody for infants.
These results support the potential for clesrovimab to become the
first and only single-dose immunization designed to protect infants
with the same dose, regardless of weight, for the duration of their
first RSV season (six months).
In immunology, long-term efficacy and safety data for
tulisokibart (MK-7240), an investigational humanized monoclonal
antibody directed to a novel target, tumor necrosis factor
(TNF)-like cytokine 1A (TL1A), from the Phase 2 ARTEMIS-UC and
APOLLO-CD studies in ulcerative colitis (UC) and Crohn’s disease
(CD), were presented at the United European Gastroenterology (UEG)
Week 2024 Congress. Both studies showed that, at week 50,
maintenance of treatment efficacy was generally observed in 12-week
induction responders. Phase 3 studies in UC and CD are ongoing.
In addition, Merck continued to expand and diversify its
pipeline by securing strategic business development opportunities.
Merck completed its acquisition of CN201 (MK-1045), a
next-generation CD3xCD19 bispecific antibody with potential
applications in B-cell malignancies and autoimmune diseases, from
Curon. Merck also announced the expansion of the global development
and commercialization agreement with Daiichi Sankyo to include
MK-6070, an investigational delta-like ligand 3 (DLL3) targeting
T-cell engager. The companies are planning to evaluate MK-6070 in
combination with ifinatamab deruxtecan (I-DXd) in certain patients
with small cell lung cancer (SCLC), as well as other potential
combinations.
Notable recent news releases on Merck’s pipeline and portfolio
are provided in the table that follows.
Oncology
FDA Approved KEYTRUDA Plus Pemetrexed and
Platinum Chemotherapy as First-Line Treatment for Adult Patients
With Unresectable Advanced or Metastatic Malignant Pleural
Mesothelioma, Based on Results From Phase 3 KEYNOTE-483/CCTG
IND.227 Trial
(Read Announcement)
EC Approved KEYTRUDA Plus Padcev as
First-Line Treatment of Unresectable or Metastatic Urothelial
Carcinoma in Adults, Based on Results From Phase 3
KEYNOTE-A39/EV-302 Trial
(Read Announcement)
KEYTRUDA Received 30th Approval From EC
With Two New Indications in Gynecologic Cancers, Based on Results
From Phase 3 KEYNOTE-868/NRG-GY018 and KEYNOTE-A18 Trials
(Read Announcement)
KEYTRUDA Received New Approvals in Japan
for Certain Patients With NSCLC, Based on Results From Phase 3
KEYNOTE-671 Trial, and for Radically Unresectable Urothelial
Carcinoma, Based on Results From Phase 3 KEYNOTE-A39/EV-302 and
Phase 2 KEYNOTE-052 Trials
(Read Announcement)
KEYTRUDA Plus Chemotherapy Before Surgery
and Continued as Single Agent After Surgery Reduced Risk of Death
by More Than One-Third (34%) Versus Neoadjuvant Chemotherapy in
High-Risk, Early-Stage TNBC, Based on Results From Phase 3
KEYNOTE-522
(Read Announcement)
KEYTRUDA Plus Chemoradiotherapy (CRT)
Reduced Risk of Death by 33% Versus CRT Alone in Patients With
Newly Diagnosed, High-Risk, Locally Advanced Cervical Cancer, Based
on Results From Phase 3 KEYNOTE-A18/ENGOT-cx11/GOG-3047 Trial
(Read Announcement)
KEYTRUDA Ten-Year Data Demonstrated
Sustained OS Benefit Versus Ipilimumab in Advanced Melanoma, Based
on Results From Phase 3 KEYNOTE-006 Trial
(Read Announcement)
KEYTRUDA Plus Lenvima in Combination With
Transarterial Chemoembolization (TACE) Significantly Improved
Progression-Free Survival Compared to TACE Alone in Patients With
Unresectable, Non-Metastatic Hepatocellular Carcinoma, Based on
Results From Phase 3 LEAP-012 Trial
(Read Announcement)
KEYTRUDA Plus Trastuzumab and Chemotherapy
Significantly Improved OS Versus Trastuzumab and Chemotherapy Alone
in First-Line Treatment of Patients With HER2-Positive Advanced
Gastric or GEJ Adenocarcinoma, Based on Results From Phase 3
KEYNOTE-811 Trial
(Read Announcement)
KEYTRUDA Met Primary Endpoint of
Event-Free Survival as Perioperative Treatment Regimen in Patients
With Resected, LA-HNSCC, Based on Results From Phase 3 KEYNOTE-689
Trial
(Read Announcement)
Patritumab Deruxtecan (HER3-DXd)
Demonstrated Statistically Significant Improvement in
Progression-Free Survival Versus Doublet Chemotherapy in Patients
With Locally Advanced or Metastatic EGFR-Mutated NSCLC, Based on
Results From Phase 3 HERTHENA-Lung02 Trial
(Read Announcement)
Ifinatamab Deruxtecan Continued to
Demonstrate Promising Objective Response Rates in Patients With
Extensive-Stage SCLC, Based on Results From Phase 2 IDeate-Lung01
Trial
(Read Announcement)
Merck and Moderna Initiated Phase 3 Trial
Evaluating Adjuvant V940 (mRNA-4157) in Combination With KEYTRUDA
After Neoadjuvant KEYTRUDA and Chemotherapy in Patients With
Certain Types of NSCLC
(Read Announcement)
Merck Initiated Phase 3 Shorespan-007
Trial for Bomedemstat, an Investigational Candidate for the
Treatment of Certain Patients With Essential Thrombocythemia
(Read Announcement)
Merck and Daiichi Sankyo Initiated Phase 3
IDeate-Lung02 Trial of Ifinatamab Deruxtecan in Patients With
Relapsed SCLC
(Read Announcement)
Merck and Exelixis Signed Clinical
Development Collaboration To Evaluate Investigational Zanzalintinib
in Combination With KEYTRUDA in Head and Neck Cancer and in
Combination With WELIREG in RCC
(Read Announcement)
Vaccines
Clesrovimab (MK-1654), an Investigational
RSV Preventative Monoclonal Antibody, Significantly Reduced
Incidence of RSV Disease and Hospitalization in Healthy Preterm and
Full-Term Infants, Based on Results From Phase 2b/3 MK-1654-004
Trial
(Read Announcement)
CDC’s ACIP Recommended CAPVAXIVE for
Pneumococcal Vaccination in Adults 50 Years of Age and Older
(Read Announcement)
CAPVAXIVE Demonstrated Positive Immune
Responses in Adults With Increased Risk for Pneumococcal Disease,
Based on Results From Phase 3 STRIDE-8 Trial
(Read Announcement)
Merck Announced Positive Top-line Results
From Phase 3 Trial Evaluating Efficacy and Safety of GARDASIL 9 in
Japanese Males
(Read Announcement)
Cardiovascular
EC Approved WINREVAIR in Combination With
Other PAH Therapies for the Treatment of PAH in Adult Patients With
Functional Class II-III, Based on Results From Phase 3 STELLAR
Trial
(Read Announcement)
Immunology
Merck Presented New Long-Term Data for
Tulisokibart (MK-7240), an Investigational Anti-TL1A Monoclonal
Antibody, in Inflammatory Bowel Disease at UEG Week 2024
(Read Announcement)
Infectious Diseases
Merck and Gilead Announced Phase 2 Data
Showing a Treatment Switch to an Investigational Oral Once-Weekly
Combination Regimen of Islatravir and Lenacapavir (MK-8591D)
Maintained Viral Suppression in Adults at Week 48
(Read Announcement)
Ophthalmology
Merck and EyeBio Initiated Phase 2b/3
Clinical Trial for MK-3000 for the Treatment of Diabetic Macular
Edema
(Read Announcement)
Sustainability
Highlights
Merck issued its 2023/2024 Impact Report, reaffirming its
commitment to operating responsibly and enabling broad access to
its products. The report noted how the company reached more than
550 million people around the world with its medicines and vaccines
through commercial channels, clinical trials, voluntary licensing
and product donations.
Full-Year 2024 Financial
Outlook
The following table summarizes the company’s full-year financial
outlook.
Full Year 2024
Updated
Prior
Sales*
$63.6 to $64.1 billion
$63.4 to $64.4 billion
Non-GAAP Gross margin2
Approximately 81%
Approximately 81%
Non-GAAP Operating expenses2**
$27.8 to $28.3 billion
$26.8 to $27.6 billion
Non-GAAP Other (income) expense, net2
Approximately $100 million
expense
Approximately $350 million
expense
Non-GAAP Effective tax rate2
16.0% to 17.0%
15.5% to 16.5%
Non-GAAP EPS2***
$7.72 to $7.77
$7.94 to $8.04
Share count (assuming dilution)
Approximately 2.54 billion
Approximately 2.54 billion
*The company does not have any
non-GAAP adjustments to sales.
**Includes one-time R&D
charges of $656 million for Harpoon Therapeutics, Inc. (Harpoon)
acquisition, $1.45 billion for EyeBio acquisition and related
development milestone payment, and $750 million for acquisition of
CN201 (MK-1045) from Curon. Outlook does not assume any additional
significant potential business development transactions.
***Includes net one-time charge
of $1.05 per share in aggregate for the Harpoon, EyeBio and Curon
transactions, and the cash payment received from Daiichi
Sankyo.
Merck 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 gains 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.
Merck continues to experience strong growth, including from
KEYTRUDA, new product launches and Animal Health. As a result,
Merck is narrowing the range of its full-year sales outlook.
Merck now expects its full-year sales to be between $63.6
billion and $64.1 billion, including a negative impact of foreign
exchange of approximately 3 percentage points, at mid-October 2024
exchange rates. Approximately 2 percentage points of the negative
impact of foreign exchange is due to the devaluation of the
Argentine peso, which is being largely offset by inflation-related
price increases, consistent with practice in that market.
Merck now expects its full-year non-GAAP effective income tax
rate to be between 16.0% and 17.0%, which includes an unfavorable
impact related to the one-time charge associated with the
acquisition of CN201 (MK-1045) from Curon.
Merck now expects its full-year non-GAAP EPS to be between $7.72
and $7.77. The outlook includes a negative impact of foreign
exchange of approximately $0.30 per share. The negative impact of
foreign exchange is primarily due to the devaluation of the
Argentine peso, which is being largely offset by inflation-related
price increases, consistent with practice in that market. This
revised non-GAAP EPS range reflects a net charge of $0.24 per share
for the following items not previously included in the outlook:
- The acquisition of CN201 (MK-1045) from Curon.
- Payment received from Daiichi Sankyo related to the expansion
of the existing development and commercialization agreement.
Consistent with past practice, the financial outlook does not
assume additional significant potential business development
transactions.
Non-GAAP EPS excludes acquisition- and divestiture-related
costs, costs related to restructuring programs, income and losses
from investments in equity securities, as well as a tax benefit in
2024 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.
Earnings Conference Call
Investors, journalists and the general public may access a live
audio webcast of the earnings conference call on Thursday, October
31, 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
at www.merck.com.
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 Merck
At Merck, 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. For more information, visit www.merck.com and connect
with us on X (formerly Twitter), Facebook, Instagram, YouTube and
LinkedIn.
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, 2023 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) 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)
LAGEVRIO (molnupiravir) 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) ROTATEQ (Rotavirus Vaccine, Live, Oral, Pentavalent)
VARIVAX (Varicella Virus Vaccine Live) VAXNEUVANCE
(Pneumococcal 15-valent Conjugate Vaccine) VERQUVO
(vericiguat) WELIREG (belzutifan) WINREVAIR
(sotatercept-csrk)
Animal Health
BRAVECTO (fluralaner)
_________________________________
1
Net income attributable to Merck
& Co., Inc.
2
Merck is providing certain 2024
and 2023 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.
3
Reflects expenses related to
acquisitions of businesses, 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.
MERCK & CO., INC. CONSOLIDATED STATEMENT OF INCOME -
GAAP (AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)
(UNAUDITED) Table 1 GAAP %
Change GAAP % Change
3Q24
3Q23
Sep YTD 2024 Sep YTD 2023 Sales
$
16,657
$
15,962
4
%
$
48,544
$
45,485
7
%
Costs, Expenses and Other Cost of sales
4,080
4,264
-4
%
11,365
12,214
-7
%
Selling, general and administrative
2,731
2,519
8
%
7,952
7,700
3
%
Research and development
5,862
3,307
77
%
13,354
20,904
-36
%
Restructuring costs
56
126
-56
%
258
344
-25
%
Other (income) expense, net
(162
)
126
*
(151
)
388
* Income Before Taxes
4,090
5,620
-27
%
15,766
3,935
* Taxes on Income
929
870
2,377
2,332
Net Income
3,161
4,750
-33
%
13,389
1,603
* Less: Net Income Attributable to Noncontrolling Interests
4
5
15
12
Net Income Attributable to Merck & Co., Inc.
$
3,157
$
4,745
-33
%
$
13,374
$
1,591
* Earnings per Common Share Assuming Dilution
$
1.24
$
1.86
-33
%
$
5.26
$
0.62
* Average Shares Outstanding Assuming Dilution
2,541
2,546
2,543
2,549
Tax Rate
22.7
%
15.5
%
15.1
%
59.3
%
* 100% or greater
MERCK & CO., INC.
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 GAAP TO NON-GAAP
RECONCILIATION (AMOUNTS IN MILLIONS, EXCEPT PER SHARE
FIGURES) (UNAUDITED) Table 2a
GAAP Acquisition and Divestiture-Related Costs (1)
Restructuring Costs (2) (Income) Loss from Investments in
Equity Securities Certain Other Items Adjustment
Subtotal Non-GAAP Third Quarter Cost of
sales
$
4,080
639
192
831
$
3,249
Selling, general and administrative
2,731
43
31
74
2,657
Research and development
5,862
24
24
5,838
Restructuring costs
56
56
56
–
Other (income) expense, net
(162
)
(27
)
58
31
(193
)
Income Before Taxes
4,090
(679
)
(279
)
(58
)
(1,016
)
5,106
Income Tax Provision (Benefit)
929
(129
)
(3
)
(46
)
(3
)
(13
)
(3
)
(188
)
1,117
Net Income
3,161
(550
)
(233
)
(45
)
(828
)
3,989
Net Income Attributable to Merck & Co., Inc.
3,157
(550
)
(233
)
(45
)
(828
)
3,985
Earnings per Common Share Assuming Dilution
$
1.24
(0.22
)
(0.09
)
(0.02
)
(0.33
)
$
1.57
Tax Rate
22.7
%
21.9
%
Sep YTD Cost of sales
$
11,365
1,708
374
2,082
$
9,283
Selling, general and administrative
7,952
88
67
155
7,797
Research and development
13,354
60
2
62
13,292
Restructuring costs
258
258
258
–
Other (income) expense, net
(151
)
(48
)
(107
)
(155
)
4
Income Before Taxes
15,766
(1,808
)
(701
)
107
(2,402
)
18,168
Income Tax Provision (Benefit)
2,377
(350
)
(3
)
(118
)
(3
)
23
(3
)
(259
)
(4
)
(704
)
3,081
Net Income
13,389
(1,458
)
(583
)
84
259
(1,698
)
15,087
Net Income Attributable to Merck & Co., Inc.
13,374
(1,458
)
(583
)
84
259
(1,698
)
15,072
Earnings per Common Share Assuming Dilution
$
5.26
(0.57
)
(0.23
)
0.03
0.10
(0.67
)
$
5.93
Tax Rate
15.1
%
17.0
%
Only the line items that are affected by non-GAAP
adjustments are shown. Merck is providing certain 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
non-GAAP information enhances investors’ understanding of the
company’s results because management uses non-GAAP measures 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. The non-GAAP information presented should be considered in
addition to, but not as a substitute for or superior to,
information prepared in accordance with GAAP. (1) Amounts included
in cost of sales primarily reflect expenses for the amortization of
intangible assets. Amounts included in selling, general and
administrative expenses reflect integration, transaction and
certain other costs related to acquisitions and divestitures.
Amounts included in research and development expenses primarily
reflect the amortization of intangible assets and Animal Health
intangible asset impairment charges. Amounts included in other
(income) expense, net, primarily reflect royalty income related to
the prior termination of the Sanofi-Pasteur MSD joint venture. (2)
Amounts primarily include employee separation costs, accelerated
depreciation and asset impairments associated with facilities to be
closed or divested related to activities under the company's formal
restructuring programs. (3) Represents the estimated tax impacts on
the reconciling items based on applying the statutory rate of the
originating territory of the non-GAAP adjustments. (4) Represents a
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.
MERCK & CO., INC. FRANCHISE / KEY PRODUCT
SALES (AMOUNTS IN MILLIONS) (UNAUDITED) Table
3
2024
2023
3Q Sep YTD 1Q 2Q 3Q Sep
YTD 1Q 2Q 3Q Sep YTD Nom %
Ex-Exch % Nom % Ex-Exch % TOTAL SALES
(1)
$15,775
$16,112
$16,657
$48,544
$14,487
$15,035
$15,962
$45,485
4
7
7
10
PHARMACEUTICAL
14,006
14,408
14,943
43,358
12,721
13,457
14,263
40,442
5
8
7
10
Oncology Keytruda
6,947
7,270
7,429
21,646
5,795
6,271
6,338
18,403
17
21
18
22
Alliance Revenue – Lynparza (2)
292
317
337
947
275
310
299
884
13
13
7
8
Alliance Revenue – Lenvima (2)
255
249
251
755
232
242
260
734
-3
-4
3
3
Welireg
85
126
139
349
42
50
54
146
156
157
138
139
Alliance Revenue – Reblozyl (3)
71
90
100
261
43
47
52
142
91
91
84
84
Vaccines (4) Gardasil/Gardasil 9
2,249
2,478
2,306
7,032
1,972
2,458
2,585
7,015
-11
-10
-
3
ProQuad/M-M-R II/Varivax
570
617
703
1,891
528
582
713
1,823
-1
-1
4
4
Vaxneuvance
219
189
239
647
106
168
214
488
12
13
33
34
RotaTeq
216
163
193
572
297
131
156
584
24
25
-2
-1
Pneumovax 23
61
59
68
188
96
92
140
327
-51
-51
-42
-40
Hospital Acute Care Bridion
440
455
420
1,315
487
502
424
1,413
-1
-
-7
-6
Prevymis
174
188
208
570
129
143
157
430
32
36
33
36
Dificid
73
92
96
261
65
76
74
215
31
31
21
21
Zerbaxa
56
62
64
182
50
54
53
157
22
25
16
19
Noxafil
56
45
41
141
60
55
51
167
-20
-13
-15
-5
Cardiovascular Alliance Revenue - Adempas/Verquvo (5)
98
106
102
306
99
68
92
259
11
11
18
18
Winrevair
70
149
219
-
-
-
-
Adempas (6)
70
72
72
214
59
65
65
189
11
13
13
15
Virology Lagevrio
350
110
383
843
392
203
640
1,236
-40
-36
-32
-27
Isentress/Isentress HD
111
89
102
302
123
136
119
377
-14
-10
-20
-16
Delstrigo
56
60
65
180
44
50
54
148
21
25
22
26
Pifeltro
42
39
42
123
34
38
37
109
14
15
13
14
Neuroscience Belsomra
46
53
78
177
56
63
58
176
35
40
-
7
Immunology Simponi
184
172
189
545
180
180
179
539
5
7
1
2
Remicade
39
35
41
115
51
48
45
144
-9
-5
-20
-16
Diabetes (7) Januvia
419
405
278
1,102
551
511
581
1,642
-52
-49
-33
-30
Janumet
251
224
204
679
329
354
255
937
-20
-13
-28
-23
Other Pharmaceutical (8)
576
573
644
1,796
626
560
568
1,758
13
15
2
5
ANIMAL HEALTH
1,511
1,482
1,487
4,480
1,491
1,456
1,400
4,347
6
11
3
7
Livestock
850
837
886
2,573
849
807
874
2,530
1
7
2
7
Companion Animal
661
645
601
1,907
642
649
526
1,817
14
17
5
7
Other Revenues (9)
258
222
227
706
275
122
299
696
-24
-22
2
4
Sum of quarterly amounts may not equal
year-to-date amounts due to rounding. (1) Only select products are
shown. (2) Alliance Revenue represents Merck’s share of profits,
which are product sales net of cost of sales and commercialization
costs. (3) Alliance Revenue represents royalties. (4) Total
Vaccines sales were $3,424 million, $3,656 million and $3,675
million in the first, second and third quarter of 2024,
respectively, and $3,133 million, $3,557 million and $4,002 million
in the first, second and third quarter of 2023, respectively. (5)
Alliance Revenue represents Merck's share of profits from sales in
Bayer's marketing territories, which are product sales net of cost
of sales and commercialization costs. (6) Net product sales in
Merck's marketing territories. (7) Total Diabetes sales were $745
million, $715 million and $592 million in the first, second and
third quarter of 2024, respectively, and $950 million, $951 million
and $924 million in the first, second and third quarter of 2023,
respectively. (8) Includes Pharmaceutical products not individually
shown above. (9) Other Revenues are comprised primarily of revenues
from third-party manufacturing arrangements and miscellaneous
corporate revenues, including revenue-hedging activities. Other
Revenues related to the receipt of upfront and milestone payments
for out-licensed products were $61 million, $15 million and $15
million in the first, second and third quarter of 2024,
respectively, and $51 million, $3 million and $65 million in the
first, second and third quarter of 2023, respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241031033115/en/
Media Contacts: Robert Josephson (203) 914-2372
robert.josephson@merck.com Michael Levey (215) 872-1462
michael.levey@merck.com Investor Contacts: Peter Dannenbaum (732)
594-1579 peter.dannenbaum@merck.com Steven Graziano (732) 594-1583
steven.graziano@merck.com
Merck (NYSE:MRK)
Historical Stock Chart
Von Nov 2024 bis Dez 2024
Merck (NYSE:MRK)
Historical Stock Chart
Von Dez 2023 bis Dez 2024
