Merck & Company ((MRK)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Merck’s recent earnings call conveyed a mixed sentiment, highlighting both achievements and challenges. The company showcased steady performance in its oncology and Animal Health segments, alongside successful product launches and a promising pipeline. However, significant declines in GARDASIL sales, particularly in China, coupled with the adverse effects of foreign exchange and tariffs, posed notable challenges.
Steady Revenue and Growth in Core Areas
Merck reported a revenue of $15.8 billion for Q2 2025, underscoring the strength of its core areas, particularly oncology and Animal Health. The company also benefited from new product launches, with WINREVAIR achieving $1 billion in cumulative sales, contributing to this steady growth.
Successful Product Launches and Pipeline Expansion
The earnings call highlighted Merck’s successful launches of WINREVAIR and CAPVAXIVE, alongside positive clinical trial results for enlicitide and other pipeline candidates. With over 80 Phase III studies underway, the company is poised for further expansion and innovation.
Strong Performance in Oncology
KEYTRUDA, Merck’s flagship oncology product, saw a 9% increase in sales, reaching $8 billion. This growth was driven by strong demand from metastatic indications and increased uptake in earlier-stage cancers, both in the U.S. and international markets.
Animal Health Growth
Merck’s Animal Health segment experienced an 11% increase in sales, reflecting higher demand across all species and improved supply, further solidifying its position in this sector.
Decline in GARDASIL Sales
GARDASIL sales fell to $1.1 billion, marking a 55% decrease, primarily due to declining sales in China. Even excluding China, sales decreased by 4%, influenced by factors in Japan and other international markets.
Impact of Foreign Exchange and Tariffs
The company’s total revenues decreased by 2%, impacted by foreign exchange fluctuations. Additionally, guidance includes $200 million in costs related to tariffs, with potential government actions still pending.
Challenges in China
Merck faced significant challenges in China, with GARDASIL sales dropping by approximately $1.3 billion, reducing overall growth by 9 percentage points. The company does not plan to resume shipments to China until at least the end of the year.
Forward-Looking Guidance
Looking ahead, Merck provided a cautious yet optimistic guidance. The company expects full-year 2025 revenue to range between $64.3 billion and $65.3 billion, with EPS projected between $8.87 and $8.97. Despite the challenges, global growth excluding GARDASIL sales in China is projected at 7%, driven by oncology, Animal Health, and new products like WINREVAIR.
In summary, Merck’s earnings call reflected a balanced outlook, with strong performances in key areas offset by significant challenges, particularly in China. The company’s forward-looking guidance suggests a focus on optimizing resources and capitalizing on high-potential areas to navigate these challenges effectively.