Introduction & Market Context
Merck & Co . (NYSE:MRK) presented its first-quarter 2025 financial results on April 24, revealing a slight overall sales decline but continued strength in its oncology portfolio. The pharmaceutical giant reported worldwide sales of $15.5 billion, representing a 2% decrease compared to the same period last year, though sales increased 1% when excluding exchange rate impacts.
The company’s stock, which closed at $78.74 on April 23, was trading up 0.51% in premarket activity at $79.14, suggesting cautious optimism from investors despite the mixed results. This quarter’s performance follows Merck (NSE:PROR)’s modest full-year 2024 growth of 0.8%, indicating continued challenges in maintaining consistent revenue expansion.
Quarterly Performance Highlights
Merck’s Q1 2025 performance showed divergent results across its business segments. While overall sales declined, the company highlighted that excluding GARDASIL sales in China, which dropped dramatically from $1.3 billion in Q1 2024 to just $193 million this quarter, worldwide sales would have grown by 6% (8% excluding exchange impacts).
Human Health sales reached $13.6 billion, declining 3% as reported or 1% excluding exchange rate impacts. However, when excluding the GARDASIL China impact, Human Health sales would have shown 5% growth (7% excluding exchange).
Animal Health continued to be a bright spot, with sales of $1.6 billion representing 5% growth as reported and 10% growth excluding exchange rate impacts. This performance aligns with the company’s 2024 results, where Animal Health was also highlighted as a strong contributor.
Oncology Portfolio Performance
KEYTRUDA remains Merck’s primary growth driver, with Q1 sales reaching $7.2 billion, a 6% increase year-over-year. The growth was driven by increased uptake in earlier-stage cancers and continued strong demand in metastatic indications. However, U.S. growth was negatively impacted by approximately $250 million due to timing of wholesaler purchases.
Other oncology products also delivered strong results. WELIREG sales grew 63% to $137 million, driven by increased uptake in certain adult patients with previously treated advanced renal cell carcinoma (RCC) in the U.S. Lynparza sales increased 8% to $312 million, while Lenvima sales grew 2% to $258 million.
The consistent performance of Merck’s oncology portfolio demonstrates the company’s strong position in cancer treatment, even as it works to diversify its revenue streams beyond KEYTRUDA, which faces patent expiration in coming years.
Pipeline and Strategic Initiatives
Merck emphasized its progress in expanding its pipeline to prepare for the eventual loss of exclusivity for KEYTRUDA. The company has nearly tripled its late-phase pipeline since 2021 and is projecting more than $50 billion in commercial opportunity by the mid-2030s from recent launches and late-phase pipeline products.
In the cardiometabolic space, Merck highlighted important results for WINREVAIR from the Phase 3 ZENITH trial and the licensing of HRS-5346, an oral Lp(a) inhibitor, from Hengrui Pharma. For infectious diseases, the company reported results from two Phase 3 switch studies for islatravir plus doravirine for HIV treatment in adults.
The oncology pipeline continues to advance with the FDA’s acceptance of a Biologics License Application (BLA) for subcutaneous pembrolizumab with berahyaluronidase-alfa and a supplemental BLA for KEYTRUDA in earlier-stage head and neck squamous cell carcinoma (HNSCC).
Forward-Looking Statements
Merck’s leadership expressed confidence in the company’s strategic direction, emphasizing its commitment to research and development as the source for sustainable value creation. The company is actively pursuing additional science-driven, value-creating transactions to bolster its portfolio and pipeline.
"Confident in our strategic direction, our commitment to research and development as the source for sustainable value-creation, and our enduring promise to positively impact patients," the company stated in its presentation.
This forward-looking approach aligns with Merck’s previously stated 2025 guidance, which projected organic sales growth between 3-6%. The first-quarter results suggest the company faces some challenges in achieving this target, particularly with the significant decline in GARDASIL sales in China, but strength in oncology and Animal Health may help offset these headwinds.
As Merck navigates the coming quarters, investors will be watching closely to see if the company can maintain momentum in its core oncology business while successfully advancing its diversification strategy to prepare for the post-KEYTRUDA era. The company’s ability to execute on its pipeline development and strategic acquisitions will be critical factors in determining its long-term growth trajectory.
Full presentation:
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