10-KPeriod: FY2025

Merck & Co., Inc. Annual Report, Year Ended Dec 31, 2025

Filed February 24, 2026For Securities:MRK

Summary

Merck & Co., Inc. reported total sales of $65.0 billion for the fiscal year 2025, a modest 1% increase year-over-year (2% excluding foreign exchange impact). This growth was primarily driven by strong performance in the oncology franchise, particularly Keytruda, and the Animal Health segment, alongside contributions from the cardiometabolic and respiratory portfolio, including the launch of Winrevair, and the acquisition of Verona Pharma which added Ohtuvayre. However, the company faced headwinds in its vaccines segment, notably a significant decline in Gardasil/Gardasil 9 sales in China due to inventory issues and local competition, as well as lower sales in the immunology and virology segments. Merck continued to bolster its pipeline through strategic business development, including the acquisition of Cidara Therapeutics and Verona Pharma, and exclusive license agreements for promising early-stage candidates. The company also advanced its late-stage pipeline with numerous regulatory submissions and positive Phase 3 trial results across various therapeutic areas. Despite revenue growth, the company announced a significant restructuring program aimed at optimizing operations and supporting future growth, expected to result in annual cost savings. Investors should monitor upcoming patent expirations for key products like Januvia and Janumet, and the ongoing impact of regulatory changes and pricing pressures, particularly from the Inflation Reduction Act, which is expected to affect Keytruda's U.S. sales in the future.

Financial Highlights

56 data points
Beta

Revenue

$65.01B

74.8% Gross Margin

Net Income

$18.25B

28.1% Net Margin

EPS (Diluted)

$7.28

Total Assets

$136.87B

Cash & Equivalents

$14.69B

Free Cash Flow

$12.36B

Financial Statements
Beta
Revenue$65.01B
Cost of Revenue$16.38B
Gross Profit$48.63B
R&D Expenses$15.79B
SG&A Expenses$10.73B
Net Income$18.25B
EPS (Basic)$7.30
EPS (Diluted)$7.28
Shares Outstanding (Basic)2.50B
Shares Outstanding (Diluted)2.51B

Key Highlights

  • 1Total sales reached $65.0 billion in 2025, a 1% increase (2% excluding FX) driven by oncology, animal health, and cardiometabolic/respiratory segments.
  • 2Keytruda and Keytruda Qlex sales grew 7% to $31.7 billion, demonstrating continued strength in the oncology franchise.
  • 3Gardasil/Gardasil 9 sales declined significantly (-39%) due to lower demand in China and inventory management issues.
  • 4Acquisitions of Verona Pharma and Cidara Therapeutics, along with strategic licensing agreements, bolstered Merck's pipeline and product portfolio.
  • 5A new restructuring program was announced, aiming for significant cost savings and operational efficiencies.
  • 6The company faces significant patent expirations for Januvia and Janumet in 2026, with expected material sales declines.
  • 7The Inflation Reduction Act's drug price negotiation program is expected to impact Keytruda sales starting in 2029.

Frequently Asked Questions

Merck's key growth drivers in 2025 were its oncology franchise, particularly Keytruda, and the Animal Health segment. The cardiometabolic and respiratory portfolio also contributed, bolstered by the launch of Winrevair and the acquisition of Verona Pharma. Strategic business development activities, including the acquisition of Cidara Therapeutics, also aimed to drive future growth.

Merck faced challenges including a significant decline in Gardasil/Gardasil 9 sales in China due to inventory issues and local competition. Sales in the immunology and virology segments also decreased. Furthermore, patent expirations for key products like Januvia and Janumet in 2026 are expected to impact future sales, and the company announced a restructuring program which indicates a need for operational optimization.

The IRA is expected to have a material impact on Merck's U.S. sales of Keytruda starting in 2029, as it has been selected for government price setting. Additionally, Januvia and Janumet are already subject to government-set prices effective in early 2026 and 2027, respectively, which are expected to significantly reduce their U.S. sales following loss of market exclusivity.

Merck's strategy focuses on advancing its science-led approach through new product approvals and launches, strong clinical execution, and strategic business development to augment its internal pipeline with external innovation. The company is diversifying its oncology portfolio across immuno-oncology, precision molecular targeting, and tissue targeting, and is advancing its pipeline in areas such as cardiometabolic, respiratory, and immunology.