Summary
Merck & Co., Inc. reported a strong financial performance for the third quarter and first nine months of 2025, with total sales reaching $17.3 billion and $48.6 billion, respectively. This represents a 4% increase year-over-year for the quarter and a slight increase for the nine-month period. The company experienced significant growth in its Pharmaceutical segment, driven by Keytruda, Welireg, and alliance revenues from Lynparza and Lenvima, alongside the cardiovascular franchise boosted by the Winrevair launch. The Animal Health segment also showed robust growth. Despite strong sales, R&D expenses saw a notable decrease of 28% in Q3 and 11% year-to-date, primarily due to reduced business development activity compared to the prior year's significant acquisition-related charges. The company also initiated a new restructuring program expected to yield substantial cost savings. Key strategic moves during the period include the significant acquisition of Verona Pharma for approximately $10.5 billion, bolstering the respiratory disease portfolio with Ohtuvayre, and entering a funding arrangement with Blackstone for the development of sacituzumab tirumotecan. These strategic investments underscore Merck's commitment to expanding its therapeutic reach. While overall sales show positive momentum, the company faces ongoing pricing pressures and evolving regulatory landscapes, particularly from the Inflation Reduction Act's drug price negotiation program impacting products like Januvia and Janumet. Legal proceedings, including the Gardasil litigation, continue, though a proposed agreement to resolve the bulk of pending claims was reached, which is expected to be not material to Merck.
Financial Highlights
55 data points| Revenue | $17.28B |
| Cost of Revenue | $3.85B |
| Gross Profit | $13.42B |
| R&D Expenses | $4.23B |
| SG&A Expenses | $2.63B |
| Net Income | $5.79B |
| EPS (Basic) | $2.32 |
| EPS (Diluted) | $2.32 |
| Shares Outstanding (Basic) | 2.50B |
| Shares Outstanding (Diluted) | 2.50B |
Key Highlights
- 1Total sales increased by 4% to $17.3 billion in Q3 2025 and were flat at $48.6 billion for the first nine months of 2025 compared to the prior year.
- 2Significant strategic acquisition of Verona Pharma for ~$10.5 billion completed in October 2025, strengthening the respiratory portfolio with Ohtuvayre.
- 3Research and Development (R&D) expenses decreased by 28% in Q3 and 11% year-to-date due to reduced business development charges compared to the prior year.
- 4Keytruda sales grew by 10% in Q3 and 8% year-to-date, driven by new indications and increased utilization across various cancer types.
- 5The company initiated a new $3.0 billion restructuring program (2025 Restructuring Program) expected to yield ~$1.7 billion in annual cost savings by the end of 2027.
- 6Gardasil/Gardasil 9 sales declined significantly due to paused shipments to China amid elevated inventory levels.
- 7A proposed agreement to substantially resolve the majority of pending Gardasil product liability claims in the U.S. was reached, expected to be not material to Merck.