Summary
Merck & Co., Inc. reported solid financial results for the third quarter and the first nine months of 2024. Total sales increased by 4% year-over-year to $16.7 billion in the third quarter and by 7% to $48.5 billion for the nine-month period. This growth was primarily driven by strong performance in the oncology franchise, notably Keytruda, and contributions from the cardiovascular and animal health segments. Despite overall sales growth, the company faced some headwinds, including a decline in vaccine sales, particularly Gardasil/Gardasil 9 due to lower demand in China. Additionally, sales of key diabetes medications like Januvia and Janumet continued to decline due to loss of exclusivity and pricing pressures. Research and Development expenses saw a significant increase, largely due to substantial charges from recent acquisitions, including EyeBio and MK-1045, impacting reported profitability. However, non-GAAP income remained strong, reflecting operational performance excluding these acquisition-related costs.
Financial Highlights
55 data points| Revenue | $16.66B |
| Cost of Revenue | $4.08B |
| Gross Profit | $12.58B |
| R&D Expenses | $5.86B |
| SG&A Expenses | $2.73B |
| Net Income | $3.16B |
| EPS (Basic) | $1.25 |
| EPS (Diluted) | $1.24 |
| Shares Outstanding (Basic) | 2.53B |
| Shares Outstanding (Diluted) | 2.54B |
Key Highlights
- 1Total sales grew 4% to $16.7 billion in Q3 2024 and 7% to $48.5 billion in the first nine months of 2024, excluding foreign exchange impacts.
- 2Keytruda demonstrated robust growth, with sales up 17% in Q3 and 18% year-to-date, driven by new indications and broader market uptake.
- 3Significant R&D expenses were incurred due to acquisitions, notably EyeBio ($1.35B charge) and MK-1045 ($750M charge), impacting reported net income.
- 4Gardasil/Gardasil 9 sales declined 11% in Q3, primarily due to reduced demand in China from inventory issues with their partner, Zhifei.
- 5Januvia/Janumet sales continued their downward trend, declining 42% in Q3, due to loss of exclusivity, pricing pressures, and government rebate cap changes.
- 6The Animal Health segment showed positive growth, with sales up 6% in Q3, boosted by new product launches and the acquisition of Elanco's aqua business.
- 7Merck announced a new restructuring program (2024 Restructuring Program) expected to cost approximately $4.0 billion over several years to optimize manufacturing networks.