10-KPeriod: FY2024

Merck & Co., Inc. Annual Report, Year Ended Dec 31, 2024

Filed February 25, 2025For Securities:MRK

Summary

Merck & Co., Inc. (MRK) reported robust sales growth of 7% to $64.2 billion in 2024, driven primarily by strong performance in oncology, cardiovascular, and animal health sectors. The company's flagship oncology drug, Keytruda, saw a significant 18% increase in global sales, reaching $29.5 billion and demonstrating continued strong demand across numerous indications and earlier-stage cancer treatments. The animal health segment also contributed positively with a 4% sales increase. Despite overall growth, the company experienced a decline in its diabetes franchise due to competitive pressures and Januvia/Janumet patent expirations, as well as reduced sales of Lagevrio (COVID-19 medication) and a notable dip in Gardasil/Gardasil 9 sales in China, a trend expected to continue into 2025. Merck actively pursued strategic business development, including several key acquisitions and licensing agreements in the ophthalmology, immunotherapy, and oncology spaces, bolstering its pipeline. The company also advanced its regulatory submissions and secured numerous product approvals globally throughout 2024, highlighting its ongoing commitment to innovation and addressing unmet medical needs. Looking ahead, Merck faces potential headwinds from pricing pressures and government regulations, notably the Inflation Reduction Act (IRA), which is expected to impact Keytruda's U.S. sales in the future. However, the company's diversified portfolio, strong pipeline, and strategic business development initiatives position it for continued growth. Investors should monitor developments in Keytruda's market exclusivity, the impact of the IRA on pricing, and the success of new product launches and pipeline advancements, particularly in oncology and cardiovascular diseases.

Financial Highlights

56 data points
Beta

Revenue

$64.17B

76.3% Gross Margin

Net Income

$17.12B

26.7% Net Margin

EPS (Diluted)

$6.74

Total Assets

$117.11B

Cash & Equivalents

$13.32B

Free Cash Flow

$18.10B

Financial Statements
Beta
Revenue$64.17B
Cost of Revenue$15.19B
Gross Profit$48.98B
R&D Expenses$17.94B
SG&A Expenses$10.82B
Net Income$17.12B
EPS (Basic)$6.76
EPS (Diluted)$6.74
Shares Outstanding (Basic)2.53B
Shares Outstanding (Diluted)2.54B

Key Highlights

  • 1Total sales grew by 7% to $64.2 billion in 2024, with international sales up 1% (6% excluding foreign exchange).
  • 2Keytruda sales increased by 18% to $29.5 billion, driven by demand across multiple indications and earlier-stage cancer treatments.
  • 3Animal Health segment sales grew by 4% to $5.9 billion.
  • 4Sales of Januvia/Janumet declined by 33% to $2.3 billion due to patent expirations and competitive pressures.
  • 5Gardasil/Gardasil 9 sales decreased by 3% to $8.6 billion, primarily impacted by lower demand in China.
  • 6The company actively engaged in business development with several acquisitions and licensing agreements to enhance its pipeline.
  • 7Merck received over 25 regulatory approvals in major markets during 2024, including new indications for Keytruda and approvals for Winrevair and Capvaxive.

Frequently Asked Questions

Merck's growth in 2024 was primarily driven by its oncology franchise, led by Keytruda, which saw strong demand across numerous indications. The cardiovascular franchise, particularly with the launch of Winrevair, and the Animal Health segment also contributed significantly to the company's sales growth.

Key challenges include ongoing pricing pressures globally, particularly from government regulations like the Inflation Reduction Act which is expected to impact future sales of certain products like Keytruda. Additionally, patent expirations for products such as Januvia/Janumet are leading to significant sales declines. The company also noted lower demand and inventory issues for Gardasil/Gardasil 9 in China, with expectations of continued sales declines in 2025.

Merck is actively managing its pipeline through strategic business development, including several acquisitions and licensing agreements focused on oncology, ophthalmology, and immunotherapy. The company also continues to invest in its internal research and development, with numerous candidates in various stages of clinical development and regulatory review.

Keytruda continues to be a major growth driver, with sales increasing by 18% in 2024. The drug received numerous regulatory approvals for new indications globally. However, the company anticipates potential sales declines in the U.S. starting in 2028 due to the implementation of government price setting under the Inflation Reduction Act, and further declines upon market exclusivity loss following patent expiration in late 2028.