10-QPeriod: Q1 FY2024

Merck & Co., Inc. Quarterly Report for Q1 Ended Mar 31, 2024

Filed May 3, 2024For Securities:MRK

Summary

Merck & Co., Inc. (MRK) reported strong first-quarter 2024 results, with net income attributable to Merck & Co., Inc. rising to $4.76 billion, or $1.87 per share, a significant increase from $2.82 billion, or $1.11 per share, in the prior year period. This performance was driven by a 9% increase in total sales, reaching $15.78 billion, bolstered by robust growth in the Oncology and Vaccines segments. Keytruda, Merck's flagship oncology drug, demonstrated substantial sales growth of 20%, and the Gardasil/Gardasil 9 HPV vaccines also saw significant increases. The company also continues to invest in its future through strategic acquisitions, notably the acquisition of Harpoon Therapeutics, Inc. and the pending acquisition of Elanco's aqua business, underscoring a commitment to pipeline expansion and innovation. Despite ongoing pricing pressures and the impact of foreign exchange, Merck's financial health remains strong, supported by effective cost management and a favorable product mix, positioning the company for continued growth.

Financial Highlights

55 data points
Beta

Revenue

$15.78B

77.6% Gross Margin

Net Income

$4.76B

30.2% Net Margin

EPS (Diluted)

$1.87

Total Assets

$105.85B

Cash & Equivalents

$5.67B

Free Cash Flow

$2.23B

Financial Statements
Beta
Revenue$15.78B
Cost of Revenue$3.54B
Gross Profit$12.23B
R&D Expenses$3.99B
SG&A Expenses$2.48B
Interest Expense$303.00M
Net Income$4.76B
EPS (Basic)$1.88
EPS (Diluted)$1.87
Shares Outstanding (Basic)2.53B
Shares Outstanding (Diluted)2.54B

Key Highlights

  • 1Net income attributable to Merck & Co., Inc. increased by 69% to $4.76 billion ($1.87 per diluted share) in Q1 2024, up from $2.82 billion ($1.11 per diluted share) in Q1 2023.
  • 2Total sales grew by 9% to $15.78 billion in Q1 2024, compared to $14.49 billion in Q1 2023. Excluding foreign exchange impacts, sales increased by 12%.
  • 3Keytruda sales surged by 20% (24% excluding foreign exchange) to $6.95 billion, driven by new indications and strong uptake in existing ones globally.
  • 4The Vaccines segment showed strong performance, with Gardasil/Gardasil 9 sales increasing by 14% (17% excluding foreign exchange) to $2.25 billion, and Vaxneuvance sales more than doubling.
  • 5Merck completed the acquisition of Harpoon Therapeutics for $765 million in March 2024 to bolster its oncology pipeline, and entered into an agreement to acquire Elanco's aqua business for $1.3 billion.
  • 6The company implemented a new restructuring program (2024 Restructuring Program) expected to cost approximately $4.0 billion over its duration, aiming for net cost savings of $750 million annually by 2031.
  • 7Operating cash flow significantly improved to $3.1 billion in Q1 2024, up from $1.3 billion in Q1 2023, reflecting stronger operating performance.

Frequently Asked Questions

Merck reported a substantial increase in net income attributable to Merck & Co., Inc. to $4.76 billion ($1.87 per diluted share) in Q1 2024, up from $2.82 billion ($1.11 per diluted share) in Q1 2023. Total sales also grew by 9% to $15.78 billion in Q1 2024, driven by strong performance in its Pharmaceutical segment, particularly in Oncology and Vaccines.

The primary drivers of sales growth were Keytruda, with a 20% increase in sales to $6.95 billion, and the Vaccines segment, where Gardasil/Gardasil 9 sales rose by 14% to $2.25 billion. Increased sales from other key products like Welireg and Reblozyl also contributed to the overall growth.

In March 2024, Merck acquired Harpoon Therapeutics, Inc. for $765 million to enhance its oncology pipeline. Additionally, in February 2024, the company entered into an agreement to acquire Elanco's aqua business for $1.3 billion, expected to close by mid-2024.

Merck initiated a new 2024 Restructuring Program in January 2024, with estimated costs of $4.0 billion over its duration, aimed at optimizing its manufacturing network and achieving annual net cost savings of approximately $750 million by 2031. The company also reported improved operating cash flow, driven by stronger operating performance.