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    MRK
    Earnings call· Dec 2025(Q4 FY25)

    Merck & Co. Q4 FY25 earnings call MRK

    Feb 3, 2026 Source

    Executive summary

    Merck & Co., Inc. Q4 FY25 — Strong Pipeline Momentum and New Product Contributions Drive Growth

    Merck delivered solid Q4 FY25 results, driven by strong performances in oncology and Animal Health, alongside increasing contributions from new product launches. The company is actively transforming its portfolio, with line of sight to over $70 billion in commercial opportunity by the mid-2030s, bolstered by strategic acquisitions and a robust pipeline. Management expresses high confidence in sustainable long-term growth post-KEYTRUDA LOE, with significant clinical milestones anticipated in the coming years.

    Highlights

    6

    • Total company revenues increased 5% (4% ex-FX) to $16.4 billion in Q4 FY25.

    • KEYTRUDA sales grew 5% to $8.4 billion, driven by robust uptake in earlier-stage cancers and metastatic indications.

    • WELIREG sales increased 37% to $220 million, predominantly from increased use in advanced renal cell carcinoma.

    • WINREVAIR global sales reached $467 million, reflecting strong demand for pulmonary arterial hypertension treatment.

    • Animal Health business delivered strong growth with sales increasing 6%, including 9% growth in Livestock sales.

    • Pipeline advancements in 2025 included positive data from 18 Phase III trials and the initiation of 21 Phase III trials.

    Concerns

    5

    • GARDASIL sales decreased 35% to $1 billion, primarily due to lower demand in China and Japan.

    • KEYTRUDA US growth was negatively impacted by approximately $200 million due to the timing of purchases.

    • ENFLONSIA sales were $21 million, with initial uptake constrained by lower-than-expected infant immunization rates and high inventory.

    • Expected 2026 headwinds of approximately $2.5 billion from generic competition (JANUVIA, BRIDION, DIFICID), IRA price setting, and the restructured Koselugo agreement.

    • Significantly lower sales of LAGEVRIO are expected in 2026 due to continued soft demand.

    Guidance & targets

    13
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $65.5 billion to $67 billion
    high materiality
    High
    Full-year 2026 Revenue Growth (ex-FX)
    0% to 2%
    high materiality
    High
    Full-year 2026 Gross Margin (non-GAAP)
    approximately 82%
    medium materiality
    High
    Full-year 2026 Operating Expenses
    $35.9 billion to $36.9 billion
    medium materiality
    High
    Full-year 2026 Other Expense
    approximately $1.3 billion
    medium materiality
    High
    Full-year 2026 Tax Rate
    23.5% to 24.5%
    medium materiality
    High
    Full-year 2026 Shares Outstanding
    approximately 2.48 billion
    low materiality
    High
    Full-year 2026 EPS (non-GAAP)
    $5 to $5.15
    high materiality
    High
    Full-year 2026 Adjusted EPS (non-GAAP, ex-Cidara charge and ongoing costs)
    $9.03
    high materiality
    High
    Share Repurchases
    approximately $3 billion
    medium materiality
    High
    Commercial Opportunity
    over $70 billion
    high materiality
    High
    KEYTRUDA LOE Patent Expiry
    May or November 2029
    high materiality
    Medium
    KEYTRUDA QLEX Adoption Rate
    30% to 40%
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Oncology
    Global growth for KEYTRUDA was driven by robust uptake in earlier-stage cancers and strong demand for metastatic indications, particularly in tumors affecting women. US growth was negatively impacted by approximately $200 million due to timing of purchases. WELIREG growth was predominantly from increased use in previously treated advanced renal cell carcinoma.
    KEYTRUDA family sales: $8.4 billionKEYTRUDA family growth (ex-FX): 5%WELIREG sales: $220 millionWELIREG growth: 37%
    		————
    Vaccines
    GARDASIL sales decrease was driven by lower demand in China and Japan, while other international markets grew 8% and US sales grew 7% (largely due to price). CAPVAXIVE launch progressed well with demand from retail and non-retail customers. ENFLONSIA uptake was constrained by lower-than-expected infant immunization rates and high inventory.
    GARDASIL sales: $1 billionGARDASIL growth: -35%CAPVAXIVE sales: $279 millionENFLONSIA sales: $21 million
    		————
    Cardiometabolic and Respiratory
    WINREVAIR showed continued strong demand for pulmonary arterial hypertension treatment. OHTUVAYRE sales reflect revenues following the acquisition of Verona on October 7, with strong growth in new patient starts and total patients treated.
    WINREVAIR sales: $467 millionOHTUVAYRE sales: $178 million
    		————
    Animal Health
    Livestock sales growth was driven by higher demand across all species. Companion animal sales were flat as growth from new product launches was offset by a reduction in vet visits.
    Livestock sales growth: 9%Companion animal sales growth: 0%
    		—6%——

    Operational metrics

    15
    Gross margin (non-GAAP)
    79.7%-1.1 percentage points
    Q4 FY25

    Decrease due to higher inventory reserves, partially offset by favorable product mix.

    Operating expenses (non-GAAP, ex-BD charges)
    flat
    Q4 FY25

    Reflecting increased investment in pipeline and growth drivers, offset by multiyear optimization initiative benefits.

    Other expense (non-GAAP)
    $226 million
    Q4 FY25

    Reported for the quarter.

    Tax rate (non-GAAP)
    15.4%
    Q4 FY25

    Reported for the quarter.

    EPS (non-GAAP)
    $2.04
    Q4 FY25

    Reported for the quarter.

    KEYTRUDA US growth negative impact
    $200 million
    Q4 FY25

    Due to timing of purchases.

    WINREVAIR new patients (US)
    more than 1,500
    Q4 FY25

    New patients receiving a prescription in the US.

    WINREVAIR total prescriptions dispensed (US)
    over 27,000
    Q4 FY25

    Total prescriptions dispensed in the US.

    OHTUVAYRE new patient starts
    strong growth
    Q4 FY25

    Observed in the US launch.

    OHTUVAYRE total patients treated
    strong growth
    Q4 FY25

    Observed in the US launch.

    OHTUVAYRE prescribing physicians
    increase
    Q4 FY25

    Increase in total number of prescribing physicians.

    KEYTRUDA QLEX sales
    $35 million
    Q4 FY25

    Initial sales in the quarter.

    KEYTRUDA QLEX J-code implementation
    expected early April
    2026

    Expected for permanent J-code in the US.

    Pipeline Phase III positive data
    18
    FY25

    Number of Phase III trials with positive data announced in 2025.

    Pipeline Phase III initiations
    21
    FY25

    Number of Phase III trials initiated in 2025.

    Industry KPIs

    8
    MetricValueDetails
    Peak sales guidance—
    Prescription volume—
    Pricing policy impact—
    Product franchise net sales—
    Geographic regional revenue growth—
    Clinical trial efficacy safety data—
    Patent expiry loe biosimilar erosion—
    Business development capacity deal size appetite—

    Deals & partnerships

    5
    Verona Pharmaacquisition

    Acquisition completed on October 7, adding OHTUVAYRE to the portfolio.

    Cidara Therapeuticsacquisition

    Acquisition completed last month (January 2026), adding MK-1406 (formerly CD388) to the portfolio.

    Dr. Falk Pharmaagreement to acquire rights$150 million

    Agreement to acquire sole global rights to MK-8690.

    Gileadcollaboration

    Collaboration on Phase III ISLEND-1 and ISLEND-2 trials evaluating islatravir and lenacapavir as a once-weekly oral 2-drug treatment regimen for HIV.

    Modernacollaboration

    Collaboration on intismeran autogene, an individualized neoantigen therapy candidate in combination with KEYTRUDA for melanoma.

    Risks & headwinds

    7
    GARDASIL sales declineQ4 FY25

    35% decrease to $1 billion

    KEYTRUDA US growth impactQ4 FY25

    negative impact of approximately $200 million

    Mitigation: Timing of purchases is a temporary factor.

    ENFLONSIA uptake constraintsQ4 FY25

    $21 million sales

    Generic competition, IRA price setting, and restructured agreementsFY26

    approximately $2.5 billion headwind

    Mitigation: Driving growth through new launches and continued strength in oncology and Animal Health.

    LAGEVRIO sales declineFY26

    significantly lower sales

    Seasonality due to Medicare deductibles resetearly part of FY26

    expected seasonality

    Mitigation: Making investments to maximize the ongoing launch of OHTUVAYRE.

    KEYTRUDA Loss of Exclusivity (LOE)2028-2029

    Compound patent expires December 2028; method patents potentially May or November 2029. IRA impact from beginning of 2029.

    Mitigation: Defending entire patent estate; driving QLEX adoption; pipeline transformation with $70B commercial opportunity by mid-2030s.

    Q&A highlights

    7

    Given the strong flu season, are event rates occurring ahead of plan for the ANCHOR trial, and should an interim disclosure be expected in March or later?

    The Northern Hemisphere enrollment is complete, and Southern Hemisphere enrollment is ongoing. The trial is event-driven, and the focus is on generating robust data across subpopulations for future labeling. No communication plans for interim analysis have been disclosed at this time.

    “This is an event-driven trial. I want to have the right trial size. I want the powering of assumptions. But most importantly, I need to make sure that I have strong data throughout a series of subpopulations that will be important for the future label.”

    asked by Mohit Bansal · answered by Dean Li

    2 min read6 chapters

    Detailed Narrative

    01

    Portfolio Transformation and Long-term Growth Outlook

    Merck is actively transforming its portfolio, with momentum building from successful new product launches, clinical advancements, and strategic acquisitions. The company now projects over $70 billion in potential commercial opportunity by the mid-2030s, a $20 billion increase from a year ago. This figure is more than double the consensus 2028 peak KEYTRUDA revenue, bolstering confidence in sustainable growth post-KEYTRUDA's loss of exclusivity. The majority of this non-risk-adjusted opportunity is expected to be clinically de-risked by the end of 2027.

    02

    Key Pipeline Advancements in Cardiometabolic and Respiratory

    Significant progress was made in cardiometabolic and respiratory programs. Phase III results for enlicitide, an oral PCSK9 inhibitor, were presented at AHA, demonstrating statistically significant reductions in atherogenic factors, with further data expected at ACC in March. WINREVAIR received expanded EU approval for PAH and showed positive Phase II CADENCE study results in pulmonary hypertension due to heart failure with preserved ejection fraction, supporting a future Phase III program.

    03

    Strategic Acquisitions Bolstering Future Growth

    Merck completed the acquisitions of Cidara Therapeutics and Verona Pharma, strengthening its infectious disease and respiratory portfolios. Cidara brings MK-1406 (formerly CD388), a long-acting influenza antiviral with over $5 billion in revenue potential, which completed Northern Hemisphere enrollment for its Phase III ANCHOR study. The Verona acquisition added OHTUVAYRE, a maintenance treatment for COPD, which saw strong initial uptake with $178 million in sales in the quarter.

    04

    Innovations in HIV Treatment

    The company announced positive top-line results for islatravir in combination with doravirine, an investigational once-daily, single-tablet 2-drug regimen for treatment-naive adults with HIV-1. This regimen demonstrated non-inferior efficacy and safety compared to the standard 3-drug INSTI-based regimen, Biktarvy. Islatravir is positioned as a novel anchor medicine for multiple 2-drug treatment regimens, including potential once-weekly oral options, with a PDUFA date set for April 28.

    05

    Oncology Portfolio Expansion and KEYTRUDA Evolution

    KEYTRUDA continues to demonstrate broad impact, with recent FDA approval in combination with PADCEV for neoadjuvant/adjuvant treatment of cisplatin-ineligible muscle-invasive bladder cancer. Positive top-line results were also announced for KEYNOTE-B15 in cisplatin-eligible MIBC. The European Commission approved KEYTRUDA SC, a subcutaneous formulation, for all 33 KEYTRUDA indications, offering a more rapid administration option and being integrated into clinical development programs.

    06

    Upcoming Clinical Milestones

    Merck anticipates a rich array of clinical readouts in 2026 and 2027. Key upcoming milestones include the February 20 PDUFA date for KEYTRUDA in platinum-resistant recurrent ovarian cancer, detailed findings for WELIREG in renal cell carcinoma at ASCO GU, and top-line data for islatravir and lenacapavir as a once-weekly oral HIV regimen. Data for tulisokibart (TL1A inhibitor) in ulcerative colitis and MK-3000 (Wnt agonist) in diabetic macular edema are also expected.

    AI-generated summary of the company’s earnings call. Not investment advice.