Merck & Company, Inc. · NYSE:MRK
Merck & — Q2 2025 Earnings Presentation
34 slides from Merck &'s earnings presentation, Jul 29, 2025
Slide 1: Second-Quarter 2025 Sales and Earnings
Second-Quarter 2025 Sales and Earnings Merck & Co., Inc., Rahway, N.J., USA July 29, 2025
Slide 2: Agenda
Strategy and Business Update Robert M. Davis Chairman and Chief Executive Officer Financial Results and Outlook Caroline Litchfield Executive Vice President and Chief Financial Officer Agenda Agenda Research Update Dr. Dean Y. Li Executive Vice President and President, Research Laboratories Question
Slide 3: Forward-looking statement of Merck & Co., Inc., Rahway, N.J., USA
Forward-looking statement of Merck & Co., Inc., Rahway, N.J., USA This presentation 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 state
Slide 4: Strategy and Business Update
Strategy and Business Update Robert M. Davis Chairman and Chief Executive Officer 4
Slide 5: Q2 performance in-line with expectations
Q2 performance in-line with expectations Q2 Worldwide Sales Q2 Non-GAAP EPS1,2 $15.8B $2.13 Results reflect strength in Oncology, Animal Health, and increasing contributions from new launches 5 1. Q2 2025 includes a charge of $0.07 per share related to the closing of a license agreement with Hengrui
Slide 6: Driving value by progressing innovative pipeline
Driving value by progressing innovative pipeline • Positive topline results for enlicitide in hyperlipidemia in first two CORALreef studies • Positive topline results for WINREVAIR in recently diagnosed PAH in HYPERION study Cardiopulmonary • Supplemental BLA accepted for WINREVAIR based on ZENITH s
Slide 7: Continuing to advance science-led strategy through pending acquisition of Verona Pharma
Continuing to advance science-led strategy through pending acquisition of Verona Pharma Science-driven business development that strengthens and complements cardiopulmonary portfolio Ohtuvayre® is the first novel inhaled COPD maintenance treatment in more than 20 years, a large disease area with sig
Slide 8: Entering period of rapid transformation with expansive late-phase pipeline
Entering period of rapid transformation with expansive late-phase pipeline Recent launches Broad late-phase pipeline subQ pembrolizumab + berahyaluronidase alfa ifinatamab deruxtecan4 intismeran autogene1 raludotatug deruxtecan4 nemtabrutinib doravirine + islatravir bomedemstat islatravir + lenacapa
Slide 9: Delivering the next wave of innovation
Delivering the Well positioned to successfully navigate next wave of the KEYTRUDA LOE period innovation Advancing Early- and Late-Phase Pipeline Tripled late-phase pipeline since 2021 Launching New Growth Drivers >$50B commercial opportunity by mid-2030s from recent launches and late-phase pipeline
Slide 10: Financial Results and Outlook
Financial Results and Outlook Caroline Litchfield Executive Vice President and Chief Financial Officer 10
Slide 11: Q2 performance driven by robust demand for our innovative portfolio
Q2 performance driven by robust demand for our innovative portfolio WORLDWIDE SALES1 Human Health Animal Health $15.8B -2% nominal & ex-FX $14.1B -2% nominal -3% ex-FX +7% ex-GARDASIL China2, nominal & ex-FX $1.6B +11% nominal & ex-FX +7% ex-GARDASIL China2, nominal & ex-FX 11 1. Worldwide Sales inc
Slide 12: Oncology: KEYTRUDA continues to benefit patients and drive growth
Oncology: KEYTRUDA continues to benefit patients and drive growth KEYTRUDA sales of $8.0B increased 9%, driven by robust demand from metastatic indications and increased uptake in earlier- stage cancers ‒ Growth driven by usage in tumors predominantly affecting women, including those $8.0B with cert
Slide 13: Oncology: Strong growth across broad portfolio
Oncology: Strong growth across broad portfolio $162M WELIREG sales grew 29%, driven by increased $50M $126M +29% uptake in certain adult patients with +89% +150% previously treated advanced RCC in the U.S. Lynparza1 sales grew 15%, primarily due to 2Q23 2Q24 2Q25 higher demand in the U.S. and certai
Slide 14: Vaccines: GARDASIL protecting lives from HPV-related cancers
Vaccines: GARDASIL protecting lives from HPV-related cancers GARDASIL sales of $1.1B decreased 55%, driven primarily by China ‒ Outside the U.S. and China, decline driven by lower sales in Japan reflecting expiration of reimbursement for catch-up cohort and timing of public sector purchases in certa
Slide 15: Vaccines: Growth across pneumococcal vaccine portfolio
Vaccines: Growth across pneumococcal vaccine portfolio CAPVAXIVE1 sales of $129M driven by demand from retail pharmacies and non-retail customers VAXNEUVANCE sales of $229M increased 20% $129M ‒ In the U.S., growth benefitted by ~$60M from CDC stockpile activity2, partially offset by competitive pre
Slide 16: ENFLONSIA: Excited to bring new option for RSV prevention in infants
ENFLONSIA: Excited to bring new option for RSV prevention in infants First and only RSV preventive option for administration to infants using same dose regardless of weight Compelling clinical data and operational simplicity make it an important option Initial orders received in July 16
Slide 17: WINREVAIR: Strong launch execution demonstrates ability to maximize value of pipeline
WINREVAIR: Strong launch execution demonstrates ability to maximize value of pipeline In the U.S., continued growth in new patient starts and TRx • >1,600 new patients prescribed in the quarter • >8,200 total patients prescribed since launch • >6,500 patients with claims approved by payers started $
Slide 18: Animal Health: Growth across livestock and companion animal
Animal Health: Growth across livestock and companion animal Animal Health sales increased 11% to $1.6B ‒ Livestock sales grew 16%, driven by higher demand across all species, as well as inclusion of sales from recently expanded aqua portfolio ‒ Companion Animal sales growth of 6% reflects $1.6B pric
Slide 19: Q2 2025 non-GAAP financial results summary
Q2 2025 non-GAAP financial results summary1 $ in billions, except EPS amounts Change Q2 2025 Q2 2024 Change Ex-FX Sales $15.8 $16.1 -2% -2% Non-GAAP Gross Margin 82.2% 80.9% +1.3pts +1.4pts Non-GAAP Operating Expenses $6.6 $6.2 +7% +7% Non-GAAP Tax Rate 15.0% 14.1% +0.9pts N/A Non-GAAP EPS2,3 $2.13
Slide 20: Updated 2025 financial outlook
Updated 2025 financial outlook Prior Guidance Updated Guidance Key Assumptions • Now assumes ~0.5 percentage point FX headwind Revenue $64.1B to $65.6B $64.3B to $65.3B • Implies +0% to +2% nominal (+1% to +2% ex-FX) • Continues to assume ~$200M of costs related to tariffs, Non-GAAP Gross Margin Rat
Slide 21: Key modeling considerations
Key modeling considerations • In China, channel inventories remain elevated and demand continues to be soft, therefore will not resume shipments GARDASIL through at least the end of this year Family1 • Japan will be a more significant headwind to growth in second half as we lap increased vaccination
Slide 22: Remain committed to balanced capital allocation strategy
Remain committed to balanced capital allocation strategy Q2 Spend ($ in billions)1 Capital allocation order of priority Continue to invest in our pipeline and business, as well as augment our pipeline with value-enhancing business $3.2 development, while returning $2.1 cash to shareholders $1.3 $0.7
Slide 23: Research Update
Research Update Dr. Dean Y. Li Executive Vice President and President, Research Laboratories 23
Slide 24: Ohtuvayre is the first inhaled COPD maintenance treatment
Ohtuvayre is the first inhaled COPD maintenance treatment that combines bronchodilatory and non-steroidal anti-inflammatory activity First novel inhaled mechanism for maintenance treatment of COPD in more than two decades Dual inhibitor of phosphodiesterase 3 (PDE3) and phosphodiesterase 4 (PDE4) Im
Slide 25: Important updates across cardiopulmonary portfolio
Important updates across cardiopulmonary portfolio WINREVAIR Enlicitide decanoate Topline results for Phase 3 HYPERION trial in adults Announced positive topline results from Phase 3 recently diagnosed with PAH showed adding CORALreef HeFH and CORALreef AddOn trials WINREVAIR on top of background PA
Slide 26: Building on our progress in infectious diseases
Building on our progress in infectious diseases RSV Dengue HIV FDA approved ENFLONSIA for Initiated first Phase 3 trial to evaluate Presented data at IAS2 from Phase 2 trial prevention of RSV lower respiratory tract V181, investigational quadrivalent vaccine evaluating MK-8527 for PrEP disease in in
Slide 27: Continuing to advance cancer care with a broad, differentiated portfolio and pipeline
Continuing to advance cancer care with a broad, differentiated portfolio and pipeline Notable recent updates Showcased diverse pipeline at ASCO investor event Three ongoing Phase 3 trials evaluating ifinatamab deruxtecan1 – IDeate-Esophageal01 in unresectable advanced or metastatic esophageal squamo
Slide 28: Key second half dates and milestones
Key second half dates and milestones Oncology Subcutaneous pembrolizumab with berahyaluronidase alfa • PDUFA date September 23rd Cardiopulmonary WINREVAIR • PDUFA date October 25th for FDA label update based on ZENITH trial • Presentation of detailed findings from HYPERION trial • Primary completion
Slide 29: Q&A
Q&A Robert M. Davis Chairman and Chief Executive Officer Caroline Litchfield Executive Vice President and Chief Financial Officer Dr. Dean Y. Li Executive Vice President and President, Research Laboratories Peter Dannenbaum Senior Vice President, Investor Relations
Slide 30: Appendix
Appendix 30
Slide 31: Q2 2025 GAAP financial results summary
Q2 2025 GAAP financial results summary $ in billions, EPS amounts Q2 2025 Q2 2024 Change Change Ex-FX Sales $15.8 $16.1 -2% -2% Operating Expenses $6.7 $6.2 +7% +7% (SG&A and R&D)1 Tax Rate 11.4% 9.1% +2.3pts N/A GAAP EPS1,2 $1.76 $2.14 -18% -16% 1. 2Q25 GAAP results include $200 million charge, or
Slide 32: Capital allocation: Trailing twelve months
Capital allocation: Trailing twelve months Over the past 12 months Order of priority $15 Well-positioned balance sheet $12 $12.6 with capacity to fund Billions $9 additional value-enhancing $6 $8.0 business development $3 $3.8 $5.2 $3.4 opportunities $0 After-Tax R&D 1 CapEx Dividends Paid Business
Slide 33: Driving value for patients and shareholders by progressing our pipeline
Driving value for patients and shareholders by progressing our pipeline Key regulatory milestones since the last earnings call: Key data & clinical advancements since the last earnings call: In the U.S.: Announced: • FDA approved BRAVECTO QUANTUM as a once-yearly injectable product to treat and prot
Slide 34: Broad and innovative pipeline to address significant unmet medical needs
Broad and innovative pipeline to address significant unmet medical needs Phase 2 Phase 3 Under regulatory review Oncology Cardiopulmonary Oncology Oncology MK-1022 (patritumab MK-2870 (sacituzumab MK-5475 MK-1026 (nemtabrutinib) KEYTRUDA (MK-3475) KEYTRUDA (MK-3475) deruxtecan)1,3 tirumotecan)1,3 PH