- Fourth-Quarter Worldwide Sales Were $15.6 Billion, an Increase of 7% From Fourth Quarter 2023; Excluding the Impact of Foreign Exchange, Growth Was 9%
- Fourth-Quarter GAAP EPS Was $1.48; Non-GAAP EPS Was $1.72; GAAP and Non-GAAP EPS Include a Charge of $0.23 per Share Related to Certain Business Development Transactions
- Full-Year Worldwide Sales Were $64.2 Billion, an Increase of 7% From Full Year 2023; Excluding the Impact of Foreign Exchange, Growth Was 10%
- KEYTRUDA Sales Grew 18% to $29.5 Billion; Excluding the Impact of Foreign Exchange, Sales Grew 22%
- WINREVAIR Sales Were $419 Million
- Animal Health Sales Grew 4% to $5.9 Billion; Excluding the Impact of Foreign Exchange, Sales Grew 8%
- GARDASIL/GARDASIL 9 Sales Declined 3% to $8.6 Billion; Excluding the Impact of Foreign Exchange, Sales Declined 2%
- Full-Year 2024 GAAP EPS Was $6.74; Non-GAAP EPS Was $7.65; GAAP and Non-GAAP EPS Include a Net Charge of $1.28 per Share Related to Certain Business Development Transactions
- In the Fourth Quarter:
- Announced Positive Topline Results From Pivotal Phase 3 Trial of Subcutaneous Pembrolizumab With Berahyaluronidase Alfa
- Received FDA Acceptance of Biologics License Application for Clesrovimab, an Investigational Long-Acting Monoclonal Antibody Designed to Protect Infants From RSV Disease During Their First RSV Season
- Augmented Diverse Pipeline Through Exclusive Global Licenses With LaNova for MK-2010, an Investigational Anti-PD-1/VEGF Bispecific Antibody, and With Hansoh for MK-4082, an Investigational Oral GLP-1 Receptor Agonist
- Received Approval of GARDASIL for Males in China, in January 2025
- Full-Year 2025 Financial Outlook
- Anticipates Worldwide Sales To Be Between $64.1 Billion and $65.6 Billion
- Expects Non-GAAP EPS To Be Between $8.88 and $9.03; Outlook Reflects a One-Time Charge of Approximately $0.09 per Share Related to an Anticipated Milestone Payment to LaNova
RAHWAY, N.J.--(BUSINESS WIRE)--Merck (NYSE: MRK), known as MSD outside the United States and Canada, today announced financial results for the fourth quarter of 2024.
“We delivered strong growth in 2024, reflecting demand for our innovative portfolio, including for KEYTRUDA, which continues to benefit more patients with cancer globally, the successful launch of WINREVAIR and strong performance of our Animal Health business,” said Robert M. Davis, chairman and chief executive officer, Merck. “We’re continuing to progress our pipeline, advance key clinical programs and augment our pipeline through promising business development. Our business remains well positioned thanks to the dedication of our talented global team, and I am more confident than ever in our long-term growth potential.”
Financial Summary
$ in millions, except EPS amounts | Fourth Quarter | Year Ended | ||||||||||
2024 | 2023 | Change | Change | Dec. 31, | Dec. 31, | Change | Change | |||||
Sales | $15,624 | $14,630 | 7% | 9% | $64,168 | $60,115 | 7% | 10% | ||||
GAAP net income (loss)1 | 3,743 | (1,226) | N/M | N/M | 17,117 | 365 | N/M | N/M | ||||
Non-GAAP net income that excludes certain items1,2* | 4,372 | 66 | N/M | N/M | 19,444 | 3,837 | N/M | N/M | ||||
GAAP EPS | 1.48 | (0.48) | N/M | N/M | 6.74 | 0.14 | N/M | N/M | ||||
Non-GAAP EPS that excludes certain items2* | 1.72 | 0.03 | N/M | N/M | 7.65 | 1.51 | N/M | N/M | ||||
*Refer to table on page 9. N/M - not meaningful | ||||||||||||
Generally Accepted Accounting Principles (GAAP) earnings per share (EPS) assuming dilution was $1.48 for the fourth quarter and $6.74 for the full year of 2024. Non-GAAP EPS was $1.72 for the fourth quarter and $7.65 for the full year of 2024. GAAP and non-GAAP EPS in the fourth quarter of 2024 include a charge of $0.23 per share related to the execution of licensing agreements with LaNova Medicines Ltd. (LaNova) and Hansoh Pharma (Hansoh). GAAP loss per share and non-GAAP EPS in the fourth quarter of 2023 include a charge of $1.69 per share related to a collaboration with Daiichi Sankyo. GAAP and non-GAAP EPS for the full years of 2024 and 2023 include charges of $1.28 and $6.21 per share, respectively, related to certain collaborations, licensing agreements and asset acquisitions.
Non-GAAP EPS excludes acquisition- and divestiture-related costs, costs related to restructuring programs, and income and losses from investments in equity securities. Non-GAAP EPS in the fourth quarter and full year of 2024 also exclude 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 certain federal tax return years. Non-GAAP EPS for the full year of 2023 also excludes a charge related to settlements with certain plaintiffs in the Zetia antitrust litigation.
Fourth-Quarter Sales Performance
The following table reflects sales of the company’s top products and significant performance drivers.
| Fourth Quarter | ||||
$ in millions | 2024 | 2023 | Change | Change Ex-Exchange | Commentary |
Total Sales | $15,624 | $14,630 | 7% | 9% | The negative impact of foreign exchange was primarily due to devaluation of Argentine peso, which was largely offset by inflation-related price increases, consistent with practice in that market. |
Pharmaceutical | 14,042 | 13,141 | 7% | 8% | Increase driven by growth in oncology and cardiovascular, partially offset by declines in diabetes, vaccines, immunology and virology. |
KEYTRUDA | 7,836 | 6,608 | 19% | 21% | Growth driven by continued strong global demand from metastatic indications, including increased uptake in bladder and endometrial cancers, as well as increased global uptake in earlier-stage indications, including triple-negative breast cancer and non-small cell lung cancer (NSCLC). The negative impact of foreign exchange was primarily due to devaluation of Argentine peso, which was largely offset by inflation-related price increases. |
GARDASIL/GARDASIL 9 | 1,550 | 1,871 | -17% | -18% | Decline primarily due to lower demand in China, partially offset by higher demand in most international regions, particularly in Japan. |
PROQUAD, M-M-R II and VARIVAX | 594 | 545 | 9% | 9% | Growth primarily due to higher pricing in the U.S. and higher tenders in certain international markets, partially offset by lower demand in the U.S. |
JANUVIA/JANUMET | 487 | 787 | -38% | -36% | Decline primarily due to lower pricing in the U.S., as well as ongoing generic competition in many international markets and supply constraints in China. |
BRIDION | 449 | 429 | 5% | 5% | Growth primarily due to higher demand in the U.S., partially offset by generic competition in certain international markets, particularly in Japan and Europe. |
Lynparza* | 365 | 315 | 16% | 18% | Growth primarily due to higher global demand. |
Lenvima* | 255 | 226 | 13% | 14% | Growth primarily due to timing of shipments in certain international markets. |
PREVYMIS | 215 | 175 | 23% | 23% | Growth primarily due to higher demand in most markets, particularly in the U.S. |
WINREVAIR | 200 | - | - | - | Represents continued uptake since second-quarter launch in the U.S. |
VAXNEUVANCE | 161 | 176 | -9% | -9% | Decline primarily driven by lower demand in the U.S. due to competition, partially offset by continued uptake from launches in Europe and the Asia Pacific region. |
WELIREG | 160 | 72 | 122% | 123% | Growth primarily driven by higher demand in the U.S., largely attributable to ongoing uptake of a new indication. |
SIMPONI | - | 171 | N/M | N/M | Marketing rights in former Merck territories reverted to Johnson & Johnson on Oct. 1, 2024. |
Animal Health | 1,397 | 1,278 | 9% | 13% | Growth primarily driven by higher pricing for both Livestock and Companion Animal product portfolios, as well as sales related to July 2024 acquisition of Elanco aqua business and higher demand for Livestock products. Approximately 3 percentage points of the negative impact of foreign exchange were due to devaluation of Argentine peso, which were largely offset by inflation-related price increases. |
Livestock | 889 | 808 | 10% | 14% | Growth primarily driven by higher demand for poultry products, sales related to acquisition of Elanco aqua business, as well as higher pricing across the portfolio. |
Companion Animal | 508 | 470 | 8% | 10% | Growth primarily driven by higher pricing across the product portfolio. Sales of BRAVECTO were $209 million and $197 million in current and prior year quarters, respectively, which represented growth of 6%, or 10% excluding impact of foreign exchange. |
Other Revenues** | 185 | 211 | -13% | 3% | Decline primarily due to impact of revenue-hedging activities and lower revenues from third-party manufacturing arrangements, partially offset by payments received for out-licensing arrangements and higher 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. | |||||
N/M – not meaningful | |||||
Full-Year Sales Performance
The following table reflects sales of the company’s top products and significant performance drivers.
| Year Ended | |||
$ in millions | Dec. 31, 2024 | Dec. 31, 2023 | Change | Change Ex- |
Total Sales | $64,168 | $60,115 | 7% | 10% |
Pharmaceutical | 57,400 | 53,583 | 7% | 10% |
KEYTRUDA | 29,482 | 25,011 | 18% | 22% |
GARDASIL/GARDASIL 9 | 8,583 | 8,886 | -3% | -2% |
PROQUAD, M-M-R II and VARIVAX | 2,485 | 2,368 | 5% | 5% |
JANUVIA/JANUMET | 2,268 | 3,366 | -33% | -29% |
BRIDION | 1,764 | 1,842 | -4% | -3% |
Lynparza* | 1,311 | 1,199 | 9% | 11% |
Lenvima* | 1,010 | 960 | 5% | 6% |
LAGEVRIO | 964 | 1,428 | -33% | -28% |
VAXNEUVANCE | 808 | 665 | 22% | 23% |
PREVYMIS | 785 | 605 | 30% | 33% |
ROTATEQ | 711 | 769 | -8% | -7% |
SIMPONI** | 543 | 710 | -24% | -23% |
WELIREG | 509 | 218 | 133% | 133% |
WINREVAIR | 419 | - | - | - |
Animal Health | 5,877 | 5,625 | 4% | 8% |
Livestock | 3,462 | 3,337 | 4% | 9% |
Companion Animal | 2,415 | 2,288 | 6% | 7% |
Other Revenues*** | 891 | 907 | -2% | 4% |
*Alliance revenue for this product represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs. | ||||
**Marketing rights in former Merck territories reverted to Johnson & Johnson on Oct. 1, 2024. | ||||
***Other revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities. | ||||
Full-year 2024 pharmaceutical sales grew 7% to $57.4 billion. Excluding the unfavorable impact of foreign exchange, pharmaceutical sales grew 10%. Approximately 2 percentage points of the negative impact of foreign exchange were due to devaluation of the Argentine peso, which were largely offset by inflation-related price increases, consistent with practice in that market. Pharmaceutical sales growth was primarily driven by higher sales in oncology, particularly KEYTRUDA and WELIREG, as well as increased alliance revenue from Reblozyl and Lynparza. Higher sales in the cardiovascular franchise, reflecting the successful launch of WINREVAIR, as well as higher sales of certain hospital acute care products, particularly PREVYMIS, also drove revenue growth in 2024. Pharmaceutical sales growth in 2024 was partially offset by lower sales of JANUVIA and JANUMET, primarily reflecting lower pricing in the U.S. and generic competition in many international markets, lower sales of the COVID-19 medication LAGEVRIO, lower sales of GARDASIL/GARDASIL 9 and lower sales of SIMPONI and REMICADE, reflecting the transfer of marketing rights in former Merck territories back to Johnson & Johnson.
Full-year 2024 Animal Health sales grew 4% to $5.9 billion. Excluding the unfavorable impact of foreign exchange, Animal Health sales grew 8%. Approximately 2 percentage points of the negative impact of foreign exchange were due to devaluation of the Argentine peso, which were largely offset by inflation-related price increases, consistent with practice in that market. Full-year sales growth was primarily driven by higher pricing across both the Companion Animal and Livestock product portfolios, and higher demand for poultry and swine products, as well as sales related to the acquisition of the Elanco aqua business. Sales of BRAVECTO were $1.1 billion in 2024, which represented growth of 6%, or 8% excluding the impact of foreign exchange.
Fourth-Quarter and Full-Year Expense, EPS and Related Information
The table below presents selected expense information.
$ in millions | GAAP | Acquisition- | Restructuring | (Income) | Non- |
Fourth Quarter 2024 | |||||
Cost of sales | $3,828 | $701 | $121 | $- | $3,006 |
Selling, general and administrative | 2,864 | 29 | 16 | - | 2,819 |
Research and development | 4,585 | 12 | (1) | - | 4,574 |
Restructuring costs | 51 | - | 51 | - | - |
Other (income) expense, net | 126 | (31) | - | 152 | 5 |
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Fourth Quarter 2023 |
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Cost of sales | $3,911 | $454 | $117 | $- | $3,340 |
Selling, general and administrative | 2,804 | 24 | 29 | - | 2,751 |
Research and development | 9,628 | 790 | - | - | 8,838 |
Restructuring costs | 255 | - | 255 | - | - |
Other (income) expense, net | 78 | (35) | - | (61) | 174 |
$ in millions | GAAP | Acquisition- | Restructuring | (Income) | Certain Other Items | Non- |
Year Ended December 31, 2024 |
| |||||
Cost of sales | $15,193 | $2,409 | $495 | $- | $ - | $12,289 |
Selling, general and administrative | 10,816 | 117 | 83 | - | - | 10,616 |
Research and development | 17,938 | 72 | 1 | - | - | 17,865 |
Restructuring costs | 309 | - | 309 | - | - | - |
Other (income) expense, net | (24) | (79) | - | 45 | - | 10 |
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Year Ended December 31, 2023 |
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Cost of sales | $16,126 | $2,018 | $211 | $- | $- | $13,897 |
Selling, general and administrative | 10,504 | 86 | 122 | - | - | 10,296 |
Research and development | 30,531 | 819 | 1 | - | - | 29,711 |
Restructuring costs | 599 | - | 599 | - | - | - |
Other (income) expense, net | 466 | (47) | - | (279) | 573 | 219 |
GAAP Expense, EPS and Related Information
Gross margin was 75.5% for the fourth quarter of 2024 compared with 73.3% for the fourth quarter of 2023. The increase was primarily due to the favorable effects of product mix (including lower royalty rates related to KEYTRUDA and GARDASIL/GARDASIL 9) and foreign exchange, partially offset by higher manufacturing-related costs (including inventory write-offs) and higher amortization of intangible assets. Gross margin was 76.3% for the full year of 2024 compared with 73.2% for the full year of 2023. The increase was primarily due to the favorable effects of product mix (including lower royalty rates related to KEYTRUDA and GARDASIL/GARDASIL 9) and foreign exchange, partially offset by higher amortization of intangible assets, as well as higher restructuring costs (primarily reflecting asset impairment charges) and higher manufacturing-related costs (including inventory write-offs).
Selling, general and administrative (SG&A) expenses were $2.9 billion in the fourth quarter of 2024, an increase of 2% compared with the fourth quarter of 2023. The increase was primarily due to higher promotional and selling costs, partially offset by the favorable impact of foreign exchange and lower restructuring costs. Full-year 2024 SG&A expenses were $10.8 billion, an increase of 3% compared with full-year 2023. The increase was primarily due to higher administrative, promotional, selling and acquisition-related costs, partially offset by the favorable impact of foreign exchange and lower restructuring costs.
Research and development (R&D) expenses were $4.6 billion in the fourth quarter of 2024, a decrease of 52% compared with the fourth quarter of 2023. R&D expenses were $17.9 billion for the full year of 2024, a decrease of 41% compared with the full year of 2023. The declines in both the fourth quarter and full year of 2024 were primarily due to lower charges for business development activity, lower intangible asset impairment charges, and the favorable impact of foreign exchange, partially offset by increased compensation and benefit costs and higher clinical development spending.
Other (income) expense, net, was $126 million of expense in the fourth quarter of 2024 compared with $78 million of expense in the fourth quarter of 2023. The unfavorability was primarily due to net losses from investments in equity securities compared with net income from investments in equity securities in the prior year quarter, partially offset by lower foreign exchange losses and lower net interest expense. Other (income) expense, net, was $24 million of income in the full year of 2024 compared with $466 million of expense in the full year of 2023, primarily due to a $572.5 million charge in 2023 related to settlements with certain plaintiffs in the Zetia antitrust litigation. The favorability was also due to $170 million of income related to the expansion of an existing development and commercialization agreement with Daiichi Sankyo, as well as lower foreign exchange losses in 2024. Other (income) expense, net, in the full year of 2024 was unfavorably affected by lower net income from investments in equity securities and higher net interest expense compared with 2023.
The effective tax rates of 10.2% and 14.1% for the fourth quarter and full year of 2024, respectively, include a 6.2 percentage point favorable impact and a 2.6 percentage point favorable impact, respectively, due to a reduction in reserves for unrecognized income tax benefits, resulting from the expiration of the statute of limitations for assessments related to certain federal tax return years.
GAAP EPS was $1.48 for the fourth quarter of 2024 compared with a loss per share of $0.48 for the fourth quarter of 2023, primarily driven by lower charges for business development transactions, operational strength in the business, lower intangible asset impairment charges, and a benefit from the expiration of the statute of limitations for assessments related to the 2020 federal tax return year. GAAP EPS was $6.74 for the full year of 2024 compared with EPS of $0.14 for the full year of 2023. The increase was primarily driven by lower charges for business development transactions, operational strength in the business, lower intangible asset impairment charges, a benefit from the expiration of the statute of limitations for the 2020 and 2019 federal tax return years, and a charge in the prior year for settlements with certain plaintiffs in the Zetia antitrust litigation, partially offset by the unfavorable effect of foreign exchange.
Non-GAAP Expense, EPS and Related Information
Non-GAAP gross margin was 80.8% for the fourth quarter of 2024 compared with 77.2% for the fourth quarter of 2023. Non-GAAP gross margin was 80.8% for the full year of 2024 compared with 76.9% for the full year of 2023. The non-GAAP gross margin improvements in both the fourth quarter and full year of 2024 were primarily due to the favorable effects of product mix (including lower royalty rates related to KEYTRUDA and GARDASIL/GARDASIL 9) and foreign exchange, partially offset by higher manufacturing-related costs (including inventory write-offs).
Non-GAAP SG&A expenses were $2.8 billion in the fourth quarter of 2024, an increase of 2% compared with the fourth quarter of 2023. Non-GAAP SG&A expenses were $10.6 billion for the full year of 2024, an increase of 3% compared with the full year of 2023. The increases were primarily due to higher promotional and selling costs and, for the full year, higher administrative costs, partially offset by the favorable impact of foreign exchange.
Non-GAAP R&D expenses were $4.6 billion in the fourth quarter of 2024, a decrease of 48% compared with the fourth quarter of 2023. Non-GAAP R&D expenses were $17.9 billion for the full year of 2024, a decrease of 40% compared with the full year of 2023. The declines in both the fourth quarter and full year of 2024 were primarily due to lower charges for business development activity and the favorable impact of foreign exchange, partially offset by increased compensation and benefit costs and higher clinical development spending.
Non-GAAP other (income) expense, net, was $5 million of expense in the fourth quarter of 2024 compared with $174 million of expense in the fourth quarter of 2023. The favorability was primarily due to lower foreign exchange losses and lower net interest expense. Non-GAAP other (income) expense, net, was $10 million of expense in the full year of 2024 compared with $219 million of expense in the full year of 2023. The favorability was primarily due to $170 million of income related to the expansion of an existing development and commercialization agreement with Daiichi Sankyo, as well as lower foreign exchange losses in 2024, partially offset by higher net interest expense.
The non-GAAP effective tax rate was 16.2% for the fourth quarter and 16.8% for the full year of 2024.
Non-GAAP EPS was $1.72 for the fourth quarter of 2024 compared with $0.03 for the fourth quarter of 2023. Non-GAAP EPS was $7.65 for the full year of 2024 compared with EPS of $1.51 for the full year of 2023. The increase in both periods was primarily driven by lower charges for business development transactions and operational strength in the business. The unfavorable effect of foreign exchange partially offset the increase in the full year.
A reconciliation of GAAP to non-GAAP net income (loss) and earnings (loss) per share is provided in the table that follows.
Fourth Quarter | Year Ended | |||
$ in millions, except EPS amounts | 2024 | 2023 | Dec. 31, 2024 | Dec. 31, 2023 |
EPS |
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GAAP EPS | $1.48 | $(0.48) | $6.74 | $0.14 |
Difference | 0.24 | 0.51 | 0.91 | 1.37 |
Non-GAAP EPS that excludes items listed below2 | $1.72 | $0.03 | $7.65 | $1.51 |
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Net Income (Loss) |
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GAAP net income (loss)1 | $3,743 | $(1,226) | $17,117 | $365 |
Difference | 629 | 1,292 | 2,327 | 3,472 |
Non-GAAP net income that excludes items listed below1,2 | $4,372 | $66 | $19,444 | $3,837 |
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Excluded Items: |
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Acquisition- and divestiture-related costs3 | $711 | $1,233 | $2,519 | $2,876 |
Restructuring costs | 187 | 401 | 888 | 933 |
Loss (income) from investments in equity securities | 152 | (61) | 45 | (279) |
Charge for Zetia antitrust litigation settlements | - | - | - | 573 |
Decrease to net income/increase to net loss before taxes | 1,050 | 1,573 | 3,452 | 4,103 |
Estimated income tax (benefit) expense4 | (421) | (281) | (1,125) | (631) |
Decrease to net income/increase to net loss | $629 | $1,292 | $2,327 | $3,472 |
Pipeline and Portfolio Highlights
Merck made important advancements in its broad, diverse pipeline, meeting significant regulatory and clinical milestones throughout the fourth quarter.
In oncology, Merck announced positive topline results from the pivotal Phase 3 MK-3475A-D77 trial evaluating the noninferiority of subcutaneous pembrolizumab and berahyaluronidase alfa, in combination with chemotherapy, versus intravenous (IV) KEYTRUDA administered with chemotherapy, for the first-line treatment of adult patients with metastatic NSCLC. Subcutaneous pembrolizumab and berahyaluronidase alfa has the potential to improve the patient experience and increase access for patients and health care providers compared to IV administration.
Merck presented new data across multiple hematologic malignancies at the American Society of Hematology Annual Meeting and Exposition in December 2024, including promising Phase 2 data for its investigational antibody-drug conjugate zilovertamab vedotin for the treatment of patients with previously untreated diffuse large B-cell lymphoma. With more than 20 abstracts presented, the data showcased Merck’s continued progress in advancing clinical research for its expanding and diverse hematology pipeline.
Merck also achieved several key regulatory milestones in the U.S., Europe, Japan and China. Highlights include the U.
Contacts
Media:
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Investor:
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(732) 594-1583
steven.graziano@merck.com
