Merck & Co., Inc., Rahway, N.J., USA's Net Income Declines 19% in Q2 2025

Merck & Co., Inc., Rahway, N.J., USA announced financial results for the second quarter of 2025, reporting total worldwide sales of $15.8 billion. This marks a 2% decrease from the second quarter of 2024. GAAP net income for the quarter was $4.43 billion, representing a significant 19% decline year-over-year. GAAP EPS stood at $1.76, down 18% from $2.14 in the prior-year quarter, missing the analyst EPS estimate of $2.01. The company's reported revenue of $15.81 billion also fell short of the analyst estimate of $15.92 billion for the quarter.

Key Product Performance

The decline in total sales was primarily driven by the Vaccines segment, particularly a significant 55% decrease in GARDASIL/GARDASIL 9 sales, which fell to $1.13 billion due to lower demand in China. Despite this, KEYTRUDA sales continued to show strong growth, increasing by 9% to $7.96 billion, fueled by continued global demand from metastatic indications and increased uptake in earlier-stage indications. Animal Health sales also saw positive growth, rising 11% to $1.65 billion, attributed to higher demand for Livestock products and the inclusion of sales from the Elanco aqua business acquisition.

Strategic Initiatives and Pipeline Developments

During the quarter, Merck & Co., Inc., Rahway, N.J., USA announced its agreement to acquire Verona Pharma for approximately $10 billion, which is expected to close in Q4 2025. This acquisition will add Ohtuvayre, a first-in-class COPD maintenance treatment, to its portfolio. The company also initiated a multiyear optimization initiative projected to generate approximately $3.0 billion in annual cost savings by the end of 2027, with these savings being reinvested into strategic growth areas. Additionally, the company received FDA approval for ENFLONSIA for the prevention of RSV in infants and announced positive topline results from two Phase 3 CORALreef trials for enlicitide decanoate, an investigational oral PCSK9 inhibitor for hyperlipidemia.

Financial Outlook

For the full year 2025, Merck & Co., Inc., Rahway, N.J., USA has narrowed its expected worldwide sales range to be between $64.3 billion and $65.3 billion. The company also narrowed its expected non-GAAP EPS range to be between $8.87 and $8.97. This outlook does not include the anticipated impact of the announced acquisition of Verona Pharma.