- Sales Reflect Continued Strong Growth in Oncology and
Vaccines
- Total Worldwide Sales Were $15.8 Billion, an Increase of 9%
From First Quarter 2023; Excluding the Impact of Foreign Exchange,
Growth Was 12%
- KEYTRUDA Sales Grew 20% to $6.9 Billion; Excluding the Impact
of Foreign Exchange, Sales Grew 24%
- GARDASIL/GARDASIL 9 Sales Grew 14% to $2.2 Billion; Excluding
the Impact of Foreign Exchange, Sales Grew 17%
- GAAP EPS Was $1.87; Non-GAAP EPS Was $2.07; GAAP and Non-GAAP
EPS Include a Charge of $0.26 per Share for Acquisition of
Harpoon
- Received FDA Approval of WINREVAIR, a First-in-Class Treatment
for Adults With Pulmonary Arterial Hypertension (WHO Group 1)
- Made Meaningful Regulatory and Clinical Progress Across Other
Therapeutic Areas, Including Oncology, Vaccines and Infectious
Diseases
- Expanded Pipeline and Portfolio Through Business Development,
Including Completed Acquisition of Harpoon and Proposed Acquisition
of Elanco’s Aqua Business
- Full-Year 2024 Financial Outlook
- Raises and Narrows Expected Worldwide Sales Range To Be Between
$63.1 Billion and $64.3 Billion
- Raises and Narrows Expected Non-GAAP EPS Range To Be Between
$8.53 and $8.65
Merck (NYSE: MRK), known as MSD outside the United States and
Canada, today announced financial results for the first quarter of
2024.
“Merck has begun 2024 with continuing momentum in our business.
We are harnessing the power of innovation to advance our deep
pipeline and are maximizing the impact of our broad commercial
portfolio for the benefit of patients,” said Robert M. Davis,
chairman and chief executive officer, Merck. “We drove strong
growth across key therapeutic areas, executed strategic business
development, and in the U.S., we are now launching WINREVAIR, a
significant new product in the cardiometabolic space for adults
with pulmonary arterial hypertension, a progressive and
debilitating disease. We have important opportunities ahead of us
across all areas of our business, and we are highly focused on
realizing them.”
Financial Summary
|
$ in millions, except EPS amounts
|
First Quarter
|
|
2024
|
2023
|
Change
|
Change Ex-
Exchange
|
|
Sales
|
$15,775
|
$14,487
|
9%
|
12%
|
|
GAAP net income1
|
4,762
|
2,821
|
69%
|
76%
|
|
Non-GAAP net income that excludes certain
items1,2*
|
5,279
|
3,564
|
48%
|
54%
|
|
GAAP EPS
|
1.87
|
1.11
|
68%
|
76%
|
|
Non-GAAP EPS that excludes certain
items2*
|
2.07
|
1.40
|
48%
|
54%
|
|
*Refer to table on page 6.
|
Generally Accepted Accounting Principles (GAAP) earnings per
share (EPS) assuming dilution was $1.87 for the first quarter of
2024. Non-GAAP EPS was $2.07 for the first quarter of 2024. GAAP
and non-GAAP EPS in the first quarter of 2024 include a charge of
$0.26 per share for the acquisition of Harpoon Therapeutics, Inc.
(Harpoon). GAAP and non-GAAP EPS in the first quarter of 2023
include charges of $0.52 per share related to the acquisition of
Imago BioSciences, Inc. (Imago) and a collaboration and licensing
agreement with Kelun-Biotech.
Non-GAAP EPS excludes acquisition- and divestiture-related
costs, costs related to restructuring programs, as well as income
and losses from investments in equity securities. Non-GAAP EPS for
the first quarter of 2023 also excludes a charge related to
settlements with certain plaintiffs in the Zetia antitrust
litigation.
First-Quarter Sales
Performance
The following table reflects sales of the company’s top products
and significant performance drivers.
|
|
First Quarter
|
|
$ in millions
|
2024
|
2023
|
Change
|
Change Ex-Exchange
|
Commentary
|
|
Total Sales
|
$15,775
|
$14,487
|
9%
|
12%
|
Approximately 2% of the negative impact of
foreign exchange was due to devaluation of Argentine peso, which
was largely offset by inflation-related price increases, consistent
with practice in that market.
|
|
Pharmaceutical
|
14,006
|
12,721
|
10%
|
13%
|
Increase driven by growth in oncology and
vaccines, partially offset by a decline in diabetes.
|
|
KEYTRUDA
|
6,947
|
5,795
|
20%
|
24%
|
Growth driven by increased global uptake
in earlier-stage indications, including triple-negative breast
cancer and renal cell carcinoma, as well as non-small cell lung
cancer (NSCLC) in the U.S., and continued strong global demand from
metastatic indications. Substantially all of the 4% negative impact
of foreign exchange was due to devaluation of Argentine peso, which
was largely offset by inflation-related price increases.
|
|
GARDASIL/GARDASIL 9
|
2,249
|
1,972
|
14%
|
17%
|
Growth due to strong demand, particularly
in China, which also benefited from timing of shipments, as well as
public-sector buying patterns in the U.S., and higher pricing.
|
|
JANUVIA/JANUMET
|
670
|
880
|
-24%
|
-21%
|
Decline primarily due to lower pricing and
demand in the U.S., as well as ongoing generic competition in many
international markets, particularly in Europe, Canada and the Asia
Pacific region.
|
|
PROQUAD, M-M-R II and VARIVAX
|
570
|
528
|
8%
|
8%
|
Growth largely from higher pricing in the
U.S., as well as higher sales in Latin America, due in part to
timing of government tenders.
|
|
BRIDION
|
440
|
487
|
-10%
|
-8%
|
Decline primarily due to generic
competition in certain ex-U.S. markets, particularly in Europe,
partially offset by higher demand in the U.S.
|
|
LAGEVRIO
|
350
|
392
|
-11%
|
-5%
|
Decline due to lower demand in certain
markets in the Asia Pacific region, partially offset by higher
demand in Japan and the U.S.
|
|
Lynparza*
|
292
|
275
|
6%
|
7%
|
Growth driven primarily by higher demand
in certain international markets, particularly in Latin
America.
|
|
Lenvima*
|
255
|
232
|
10%
|
10%
|
Growth primarily from higher demand in the
U.S.
|
|
VAXNEUVANCE
|
219
|
106
|
106%
|
106%
|
Growth largely driven by continued uptake
for pediatric indication in the U.S. and launches in Europe. Sales
growth in the U.S. also benefited from public-sector buying
patterns.
|
|
ROTATEQ
|
216
|
297
|
-27%
|
-27%
|
Decline primarily due to timing of
shipments in China and public-sector buying patterns in the
U.S.
|
|
Animal Health
|
1,511
|
1,491
|
1%
|
4%
|
Growth primarily driven by higher pricing
in both Livestock and Companion Animal product portfolios,
partially offset by lower volumes. Approximately 2% of the negative
impact of foreign exchange was due to devaluation of Argentine
peso, which was largely offset by inflation-related price
increases.
|
|
Livestock
|
850
|
849
|
0%
|
4%
|
Sales were flat reflecting higher pricing
across product portfolio, as well as higher demand for swine and
poultry products, partially offset by lower demand for ruminant
products.
|
|
Companion Animal
|
661
|
642
|
3%
|
4%
|
Growth due to higher pricing across
product portfolio. Sales of BRAVECTO were $332 million and $314
million in current and prior-year quarters, respectively, which
represented growth of 6%, or 7% excluding impact of foreign
exchange.
|
|
Other Revenues**
|
258
|
275
|
-6%
|
11%
|
Decline due to impact of revenue hedging
activities.
|
|
*Alliance revenue for this
product represents Merck’s share of profits, which are product
sales net of cost of sales and commercialization costs.
|
|
**Other revenues are comprised
primarily of revenues from third-party manufacturing arrangements
and miscellaneous corporate revenues, including revenue hedging
activities.
|
First-Quarter Expense, EPS and Related
Information
The table below presents selected expense information.
|
$ in millions
|
GAAP
|
Acquisition-
and
Divestiture-
Related Costs3
|
Restructuring
Costs
|
(Income)
Loss From
Investments
in Equity
Securities
|
Certain Other Items
|
Non-
GAAP2
|
|
First Quarter 2024
|
|
|
|
|
|
|
|
Cost of sales
|
$3,540
|
$463
|
$116
|
$-
|
$-
|
$2,961
|
|
Selling, general and administrative
|
2,483
|
21
|
5
|
-
|
-
|
2,457
|
|
Research and development
|
3,992
|
16
|
2
|
-
|
-
|
3,974
|
|
Restructuring costs
|
123
|
-
|
123
|
-
|
-
|
-
|
|
Other (income) expense, net
|
(33)
|
(4)
|
-
|
(116)
|
-
|
87
|
|
|
|
|
|
|
|
|
|
First Quarter 2023
|
|
|
|
|
|
|
|
Cost of sales
|
$3,926
|
$545
|
$29
|
$-
|
$-
|
$3,352
|
|
Selling, general and administrative
|
2,479
|
20
|
1
|
-
|
-
|
2,458
|
|
Research and development
|
4,276
|
10
|
-
|
-
|
-
|
4,266
|
|
Restructuring costs
|
67
|
-
|
67
|
-
|
-
|
-
|
|
Other (income) expense, net
|
89
|
15
|
-
|
(429)
|
573
|
(70)
|
GAAP Expense, EPS and Related
Information
Gross margin was 77.6% for the first quarter of 2024 compared
with 72.9% for the first quarter of 2023. The increase was
primarily due to the favorable impacts of product mix (including
lower royalty rates related to KEYTRUDA and GARDASIL/GARDASIL 9),
foreign exchange and lower amortization of intangible assets,
partially offset by higher restructuring costs and inventory
write-offs.
Selling, general and administrative (SG&A) expenses were
$2.5 billion in both the first quarters of 2024 and 2023, primarily
due to higher administrative costs, offset by lower promotional
costs, reflecting the prioritization of spending on key growth
products, and the favorable impact of foreign exchange.
Research and development (R&D) expenses were $4.0 billion in
the first quarter of 2024 compared with $4.3 billion in the first
quarter of 2023. The decrease was primarily due to lower charges
for business development activity, which included a $656 million
charge for the acquisition of Harpoon in the first quarter of 2024,
compared with charges of $1.2 billion for the acquisition of Imago
and $175 million for a license and collaboration agreement with
Kelun-Biotech in the first quarter of 2023. The decline was
partially offset by increased compensation and benefit costs,
higher clinical development spending, as well as higher investments
in discovery research and early drug development in the first
quarter of 2024.
Other (income) expense, net, was $33 million of income in the
first quarter of 2024 compared with $89 million of expense in the
first quarter of 2023. The favorability primarily reflects a $572.5
million charge in 2023 related to settlements with certain
plaintiffs in the Zetia antitrust litigation, largely offset by
lower income from investments in equity securities and higher net
interest expense in 2024.
The effective tax rate was 15.9% for the first quarter of 2024
(which includes a 1.6 percentage point unfavorable impact for the
acquisition of Harpoon), compared with 22.6% in the first quarter
of 2023 (which includes a 5.5 percentage point unfavorable impact
for the acquisition of Imago).
GAAP EPS was $1.87 for the first quarter of 2024 compared with
$1.11 for the first quarter of 2023.
Non-GAAP Expense, EPS and Related
Information
Non-GAAP gross margin was 81.2% for the first quarter of 2024
compared with 76.9% for the first quarter of 2023. The increase was
primarily due to the favorable impacts of product mix (including
lower royalty rates related to KEYTRUDA and GARDASIL/GARDASIL 9)
and foreign exchange, partially offset by higher inventory
write-offs.
Non-GAAP SG&A expenses were $2.5 billion for both the first
quarters of 2024 and 2023, primarily due to higher administrative
costs, offset by lower promotional costs, reflecting the
prioritization of spending on key growth products, and the
favorable impact of foreign exchange.
Non-GAAP R&D expenses were $4.0 billion in the first quarter
of 2024 compared with $4.3 billion in the first quarter of 2023.
The decrease was primarily due to lower charges for business
development activity, which included a $656 million charge for the
acquisition of Harpoon in the first quarter of 2024, compared with
charges of $1.2 billion for the acquisition of Imago and $175
million for a license and collaboration agreement with
Kelun-Biotech in the first quarter of 2023. The decline was
partially offset by increased compensation and benefit costs,
higher clinical development spending, as well as higher investments
in discovery research and early drug development in the first
quarter of 2024.
Non-GAAP other (income) expense, net, was $87 million of expense
in the first quarter of 2024 compared with $70 million of income in
the first quarter of 2023, primarily due to higher net interest
expense.
The non-GAAP effective tax rate was 16.1% for the first quarter
of 2024 (which includes a 1.5 percentage point unfavorable impact
for the acquisition of Harpoon), compared with 20.4% in the first
quarter of 2023 (which includes a 4.3 percentage point unfavorable
impact for the acquisition of Imago).
Non-GAAP EPS was $2.07 for the first quarter of 2024 compared
with $1.40 for the first quarter of 2023.
A reconciliation of GAAP to non-GAAP net income and EPS is
provided in the table that follows.
|
|
First Quarter
|
|
$ in millions, except EPS amounts
|
2024
|
2023
|
|
EPS
|
|
|
|
GAAP EPS
|
$1.87
|
$1.11
|
|
Difference
|
0.20
|
0.29
|
|
Non-GAAP EPS that excludes items listed
below2
|
$2.07
|
$1.40
|
|
|
|
|
|
Net Income
|
|
|
|
GAAP net income1
|
$4,762
|
$2,821
|
|
Difference
|
517
|
743
|
|
Non-GAAP net income that excludes items
listed below1,2
|
$5,279
|
$3,564
|
|
|
|
|
|
Excluded Items:
|
|
|
|
Acquisition- and divestiture-related
costs3
|
$496
|
$590
|
|
Restructuring costs
|
246
|
97
|
|
Income from investments in equity
securities
|
(116)
|
(429)
|
|
Charge for Zetia antitrust litigation
settlements
|
-
|
573
|
|
Net decrease in income before taxes
|
626
|
831
|
|
Estimated income tax (benefit) expense
|
(109)
|
(88)
|
|
Decrease in net income
|
$517
|
$743
|
Pipeline and Portfolio
Highlights
Merck continued to achieve key regulatory and clinical
milestones across therapeutic areas in the first quarter.
In cardiometabolic disease, Merck received approval from the
U.S. Food and Drug Administration (FDA) for WINREVAIR
(sotatercept-csrk) for the treatment of adults with pulmonary
arterial hypertension (PAH, World Health Organization [WHO] Group
1) to increase exercise capacity, improve WHO functional class, and
reduce the risk of clinical worsening events. WINREVAIR is a
breakthrough biologic and the first FDA-approved activin signaling
inhibitor therapy for PAH, a rare, progressive disease. WINREVAIR
is currently under review in the European Union and is being
evaluated in ongoing Phase 3 trials in additional PAH patient
populations.
In oncology, KEYTRUDA continued to demonstrate its role as a
foundational therapy for certain types of cancers, receiving the
first approval in Europe for an anti-PD-1/L1 therapy as part of a
treatment regimen for adult patients with resectable NSCLC at high
risk of recurrence. In addition, the FDA granted Priority Review to
a new supplemental Biologics License Application (sBLA) that would
establish KEYTRUDA as the first immunotherapy indicated for the
frontline treatment of advanced endometrial cancer regardless of
DNA mismatch repair status. Merck also made meaningful progress in
its clinical development programs, including initiating a Phase 3
trial for MK-1084, its investigational oral selective KRAS G12C
inhibitor, in combination with KEYTRUDA for the first-line
treatment of certain patients with metastatic NSCLC. And, in
collaboration with Daiichi Sankyo, the company initiated the
REJOICE-OVARIAN01 Phase 2/3 trial evaluating the efficacy and
safety of investigational raludotatug deruxtecan (R-DXd) in
patients with platinum-resistant ovarian cancer.
In vaccines, Merck shared positive data from multiple Phase 3
studies evaluating V116, the company’s investigational, 21-valent
pneumococcal conjugate vaccine designed for adults. If approved,
V116 would be the first pneumococcal conjugate vaccine designed to
address the serotypes responsible for approximately 83% of invasive
pneumococcal disease in adults 65 and older. Merck also announced
plans to initiate clinical development of a new investigational,
multi-valent HPV vaccine designed to provide broader protection
against certain cancers and diseases caused by additional HPV
types, as well as plans to conduct clinical trials in both females
and males (16-26 years old) to evaluate the efficacy and safety of
a single-dose regimen of GARDASIL 9.
In infectious diseases, Merck presented new data from its HIV
development programs at the 31st Conference on
Retroviruses and Opportunistic Infections in March, demonstrating
significant momentum within the HIV pipeline. These data included
the Phase 2 study evaluating a once-weekly oral combination regimen
of islatravir, the company’s investigational nucleoside reverse
transcriptase translocation inhibitor (NRTTI), and Gilead Sciences,
Inc.’s lenacapavir, a first-in-class capsid inhibitor, for the
treatment of adults living with HIV. And, for the first time, Merck
presented data for MK-8527, the company's novel NRTTI that is being
developed as an oral once-monthly agent for HIV-1 pre-exposure
prophylaxis (PrEP), which recently entered Phase 2 development.
Merck has the following three Prescription Drug User Fee Act
(PDUFA), or target action, dates set by the FDA in the second
quarter of 2024: V116 (June 17), KEYTRUDA plus chemotherapy as
treatment for primary advanced or recurrent endometrial carcinoma
(June 21) and, in collaboration with Daiichi Sankyo, patritumab
deruxtecan (HER3-DXd) for the treatment of certain patients with
previously treated locally advanced or metastatic EGFR-mutated
NSCLC (June 26).
Merck continued to expand and complement its pipeline and
product portfolio through business development. Merck completed the
acquisition of Harpoon, expanding its oncology pipeline with novel
T-cell engagers, including MK-6070, an investigational delta-like
ligand 3 targeting T-cell engager. The company also entered into a
definitive agreement to acquire the aqua business of Elanco Animal
Health Incorporated (Elanco), which will broaden its aqua portfolio
with new products.
Notable recent news releases on Merck’s pipeline and portfolio
are provided in the table that follows.
|
Cardiometabolic
|
FDA Approved Merck’s WINREVAIR, a
First-in-Class Treatment for Adults With PAH, Based on Results From
Phase 3 STELLAR Trial
|
(Read Announcement)
|
|
Oncology
|
European Commission Approved Merck’s
KEYTRUDA Plus Chemotherapy as Neoadjuvant Treatment, Then Continued
as Monotherapy as Adjuvant Treatment, for Resectable NSCLC at High
Risk of Recurrence in Adults, Based on Results From Phase 3
KEYNOTE-671 Trial
|
(Read Announcement)
|
|
FDA Granted Priority Review to Merck’s
Application for KEYTRUDA Plus Chemotherapy as Treatment for Primary
Advanced or Recurrent Endometrial Carcinoma, Based on Results From
Phase 3 NRG-GY018 Trial
|
(Read Announcement)
|
|
KEYTRUDA Plus Chemoradiotherapy (CRT)
Significantly Improved Overall Survival Versus CRT Alone in
Patients With Newly Diagnosed High-Risk Locally Advanced Cervical
Cancer, Based on Results From Phase 3 KEYNOTE-A18 Trial
|
(Read Announcement)
|
|
Merck and Daiichi Sankyo Initiated
REJOICE-Ovarian01 Phase 2/3 Trial of Raludotatug Deruxtecan in
Patients With Platinum-Resistant Ovarian Cancer
|
(Read Announcement)
|
|
Merck Initiated Phase 3 Clinical Trial of
MK-1084, an Investigational Oral KRAS G12C Inhibitor, in
Combination With KEYTRUDA for First-Line Treatment of Certain
Patients With Metastatic NSCLC
|
(Read Announcement)
|
|
Vaccines
|
Merck Announced Positive Data on V116, an
Investigational, 21-Valent Pneumococcal Conjugate Vaccine
Specifically Designed for Adults, Demonstrated Immune Responses in
Adults, Based on Results From Multiple Phase 3 Trials
|
(Read Announcement)
|
|
Merck Announced Plans to Conduct Clinical
Trials of a Novel Investigational Multi-Valent HPV and Single-Dose
Regimen for GARDASIL 9
|
(Read Announcement)
|
|
Infectious Diseases
|
Merck and Gilead Announced Phase 2 Data
Showing an Investigational Oral Once-Weekly Combination Regimen of
Islatravir and Lenacapavir Maintained Viral Suppression at Week
24
|
(Read Announcement)
|
Upcoming Investor Event
Merck will host an Oncology Investor Event to coincide with the
American Society for Clinical Oncology Annual Meeting on Monday,
June 3, 2024, 6 p.m. CT, at which senior management will provide an
update on the company’s oncology strategy and program. The event
will take place in Chicago, Ill., and will be accessible via live
audio webcast at this weblink.
Full-Year 2024 Financial
Outlook
The following table summarizes the company’s full-year financial
outlook.
|
|
Full Year 2024
|
|
|
Updated
|
Prior
|
|
Sales*
|
$63.1 to $64.3 billion
|
$62.7 to $64.2 billion
|
|
Non-GAAP Gross margin2
|
Approximately 81%
|
Approximately 80.5%
|
|
Non-GAAP Operating
expenses2**
|
$25.2 to $26.1 billion
|
$25.1 to $26.1 billion
|
|
Non-GAAP Other (income) expense,
net2
|
Approximately $250 million
expense
|
Approximately $200 million
expense
|
|
Non-GAAP Effective tax
rate2
|
14.5% to 15.5%
|
14.5% to 15.5%
|
|
Non-GAAP EPS2***
|
$8.53 to $8.65
|
$8.44 to $8.59
|
|
Share count (assuming dilution)
|
Approximately 2.55 billion
|
Approximately 2.54 billion
|
|
*The company does not have any
non-GAAP adjustments to sales.
|
|
**Includes a one-time R&D
charge of $656 million related to the Harpoon acquisition. Outlook
does not assume any additional significant potential business
development transactions.
|
|
***Includes a one-time charge of
$0.26 per share related to the Harpoon acquisition.
|
Merck has not provided a reconciliation of forward-looking
non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other
(income) expense, net, non-GAAP effective tax rate and non-GAAP EPS
to the most directly comparable GAAP measures, given it cannot
predict with reasonable certainty the amounts necessary for such a
reconciliation, including intangible asset impairment charges,
legal settlements, and gains and losses from investments in equity
securities either owned directly or through ownership interests in
investment funds, without unreasonable effort. These items are
inherently difficult to forecast and could have a significant
impact on the company’s future GAAP results.
Merck continues to experience strong global demand for key
growth products in oncology and vaccines. Consequently, Merck is
raising and narrowing its full-year outlook ranges for sales and
non-GAAP EPS.
Merck now expects its full-year 2024 sales to be between $63.1
billion and $64.3 billion, including a negative impact of foreign
exchange of approximately 3% at mid-April 2024 exchange rates.
Approximately 2% of the negative impact of foreign exchange is due
to the devaluation of the Argentine peso, which the company expects
will largely be offset by inflation-related price increases,
consistent with practice in that market.
Merck continues to expect its full-year non-GAAP effective
income tax rate to be between 14.5% and 15.5%.
Merck now expects its full-year non-GAAP EPS to be between $8.53
and $8.65, including a charge of $0.26 per share for the
acquisition of Harpoon that closed in the first quarter of 2024 and
a negative impact of foreign exchange of approximately $0.30 per
share. The negative impact of foreign exchange is primarily due to
the devaluation of the Argentine peso, which the company expects
will largely be offset by inflation-related price increases,
consistent with practice in that market.
Consistent with past practice, the financial outlook does not
assume additional significant potential business development
transactions.
Full-year 2023 non-GAAP EPS of $1.51 was negatively impacted by
charges of $6.21 per share related to certain acquisitions and
collaboration agreements.
Non-GAAP EPS excludes acquisition- and divestiture-related
costs, costs related to restructuring programs, income and losses
from investments in equity securities, and a previously disclosed
charge related to settlements with certain plaintiffs in the Zetia
antitrust litigation.
Earnings Conference Call
Investors, journalists and the general public may access a live
audio webcast of the earnings conference call on Thursday, April
25, at 9 a.m. ET via this weblink. A replay of the webcast, along
with the sales and earnings news release, supplemental financial
disclosures, and slides highlighting the results, will be available
at www.merck.com.
All participants may join the call by dialing (888) 847-9708
(U.S. and Canada Toll-Free) or (630) 395-0358 and using the access
code 4164932.
About Merck
At Merck, known as MSD outside of the United States and Canada,
we are unified around our purpose: We use the power of leading-edge
science to save and improve lives around the world. For more than
130 years, we have brought hope to humanity through the development
of important medicines and vaccines. We aspire to be the premier
research-intensive biopharmaceutical company in the world – and
today, we are at the forefront of research to deliver innovative
health solutions that advance the prevention and treatment of
diseases in people and animals. We foster a diverse and inclusive
global workforce and operate responsibly every day to enable a
safe, sustainable and healthy future for all people and
communities. For more information, visit www.merck.com and connect
with us on X (formerly Twitter), Facebook, Instagram, YouTube and
LinkedIn.
Forward-Looking Statement of Merck & Co., Inc., Rahway,
N.J., USA
This news release of Merck & Co., Inc., Rahway, N.J., USA
(the “company”) includes “forward-looking statements” within the
meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. These statements are
based upon the current beliefs and expectations of the company’s
management and are subject to significant risks and uncertainties.
There can be no guarantees with respect to pipeline candidates that
the candidates will receive the necessary regulatory approvals or
that they will prove to be commercially successful. If underlying
assumptions prove inaccurate or risks or uncertainties materialize,
actual results may differ materially from those set forth in the
forward-looking statements.
Risks and uncertainties include but are not limited to, general
industry conditions and competition; general economic factors,
including interest rate and currency exchange rate fluctuations;
the impact of pharmaceutical industry regulation and health care
legislation in the United States and internationally; global trends
toward health care cost containment; technological advances, new
products and patents attained by competitors; challenges inherent
in new product development, including obtaining regulatory
approval; the company’s ability to accurately predict future market
conditions; manufacturing difficulties or delays; financial
instability of international economies and sovereign risk;
dependence on the effectiveness of the company’s patents and other
protections for innovative products; and the exposure to
litigation, including patent litigation, and/or regulatory
actions.
The company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events or otherwise. Additional factors that could cause
results to differ materially from those described in the
forward-looking statements can be found in the company’s Annual
Report on Form 10-K for the year ended December 31, 2023 and the
company’s other filings with the Securities and Exchange Commission
(SEC) available at the SEC’s Internet site (www.sec.gov).
Appendix
Generic product names are provided below.
Pharmaceutical
BRIDION (sugammadex)
GARDASIL (Human
Papillomavirus Quadrivalent [Types 6, 11, 16 and 18] Vaccine,
Recombinant)
GARDASIL 9 (Human Papillomavirus 9-valent Vaccine,
Recombinant)
JANUMET (sitagliptin and metformin
HCl)
JANUVIA (sitagliptin)
KEYTRUDA (pembrolizumab)
LAGEVRIO
(molnupiravir)
Lenvima (lenvatinib)
Lynparza (olaparib)
M-M-R II
(Measles, Mumps and Rubella Virus Vaccine Live)
PROQUAD (Measles, Mumps, Rubella and Varicella Virus
Vaccine Live)
ROTATEQ (Rotavirus Vaccine, Live,
Oral, Pentavalent)
VARIVAX (Varicella Virus
Vaccine Live)
VAXNEUVANCE (Pneumococcal 15-valent
Conjugate Vaccine)
WINREVAIR (sotatercept-csrk)
Animal Health
BRAVECTO (fluralaner)
|
________________________________ |
|
1 Net income attributable to Merck & Co., Inc. |
|
2 Merck is providing certain 2024 and 2023 non-GAAP
information that excludes certain items because of the nature of
these items and the impact they have on the analysis of underlying
business performance and trends. Management believes that providing
this information enhances investors’ understanding of the company’s
results because management uses non-GAAP results to assess
performance. Management uses non-GAAP measures internally for
planning and forecasting purposes and to measure the performance of
the company along with other metrics. In addition, annual employee
compensation, including senior management’s compensation, is
derived in part using a non-GAAP pretax income metric. This
information should be considered in addition to, but not as a
substitute for or superior to, information prepared in accordance
with GAAP. For a description of the non-GAAP adjustments, see Table
2a attached to this release. |
|
3 Includes expenses for the amortization of intangible
assets recognized as a result of acquisitions of businesses,
intangible asset impairment charges and expense or income related
to changes in the estimated fair value measurement of liabilities
for contingent consideration. Also includes integration,
transaction and certain other costs associated with acquisitions
and divestitures, as well as amortization of intangible assets
related to collaborations and licensing arrangements. |
| |
|
MERCK & CO., INC. |
|
CONSOLIDATED STATEMENT OF INCOME - GAAP |
|
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES) |
|
(UNAUDITED) |
|
Table 1 |
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
% Change |
|
|
|
| |
|
|
|
|
|
1Q24
|
|
|
1Q23
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
Sales |
|
$
|
15,775
|
|
$
|
14,487
|
|
|
9
|
%
|
|
|
|
| |
|
|
|
|
|
Costs, Expenses and Other |
| |
|
|
|
|
| Cost of sales |
|
|
3,540
|
|
|
3,926
|
|
|
-10
|
%
|
|
| Selling, general and administrative |
|
|
2,483
|
|
|
2,479
|
|
|
0
|
%
|
|
| Research and development |
|
|
3,992
|
|
|
4,276
|
|
|
-7
|
%
|
|
| Restructuring costs |
|
|
123
|
|
|
67
|
|
|
84
|
%
|
|
| Other (income) expense, net |
|
|
(33
|
)
|
|
89
|
|
|
* |
|
|
Income Before Taxes |
|
|
5,670
|
|
|
3,650
|
|
|
55
|
%
|
|
|
Income Tax Provision |
|
|
903
|
|
|
825
|
|
|
|
|
|
Net Income |
|
|
4,767
|
|
|
2,825
|
|
|
69
|
%
|
|
|
Less: Net Income Attributable to Noncontrolling Interests |
|
|
5
|
|
|
4
|
|
|
|
|
|
Net Income Attributable to Merck & Co., Inc. |
|
$
|
4,762
|
|
$
|
2,821
|
|
|
69
|
%
|
|
|
|
| |
|
|
|
|
| Earnings per Common Share Assuming Dilution |
|
$
|
1.87
|
|
$
|
1.11
|
|
|
68
|
%
|
|
|
|
| |
|
|
| |
|
Average Shares Outstanding Assuming Dilution |
|
|
2,544
|
|
|
2,551
|
|
|
| |
| Tax Rate |
|
|
15.9
|
%
|
|
22.6
|
%
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| * 100% or greater |
|
|
|
|
| |
| |
|
MERCK & CO., INC. |
|
FIRST QUARTER 2024 GAAP TO NON-GAAP RECONCILIATION |
|
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES) |
|
(UNAUDITED) |
|
Table 2a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
GAAP |
|
Acquisition and Divestiture-Related Costs
(1) |
|
Restructuring Costs (2) |
|
(Income) Loss from Investments in Equity Securities |
|
Adjustment Subtotal |
|
Non-GAAP |
|
|
|
|
|
|
| |
| First Quarter |
|
|
|
|
|
|
|
|
|
|
| |
| Cost of sales |
|
$
|
3,540
|
|
|
463
|
|
|
116
|
|
|
|
|
579
|
|
|
$
|
2,961
|
|
| Selling, general and administrative |
|
|
2,483
|
|
|
21
|
|
|
5
|
|
|
|
|
26
|
|
|
|
2,457
|
|
| Research and development |
|
|
3,992
|
|
|
16
|
|
|
2
|
|
|
|
|
18
|
|
|
|
3,974
|
|
| Restructuring costs |
|
|
123
|
|
|
|
|
123
|
|
|
|
|
123
|
|
|
|
–
|
|
| Other (income) expense, net |
|
|
(33
|
)
|
|
(4
|
)
|
|
|
|
(116
|
)
|
|
(120
|
)
|
|
|
87
|
|
| Income Before Taxes |
|
|
5,670
|
|
|
(496
|
)
|
|
(246
|
)
|
|
116
|
|
|
(626
|
)
|
|
|
6,296
|
|
| Income Tax Provision (Benefit) |
|
|
903
|
|
|
(92
|
)
|
(3
|
)
|
(42
|
)
|
(3
|
)
|
25
|
|
(3
|
)
|
(109
|
)
|
|
|
1,012
|
|
| Net Income |
|
|
4,767
|
|
|
(404
|
)
|
|
(204
|
)
|
|
91
|
|
|
(517
|
)
|
|
|
5,284
|
|
| Net Income Attributable to Merck & Co., Inc. |
|
|
4,762
|
|
|
(404
|
)
|
|
(204
|
)
|
|
91
|
|
|
(517
|
)
|
|
|
5,279
|
|
| Earnings per Common Share Assuming Dilution |
|
$
|
1.87
|
|
|
(0.16
|
)
|
|
(0.08
|
)
|
|
0.04
|
|
|
(0.20
|
)
|
|
$
|
2.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Tax Rate |
|
|
15.9
|
%
|
|
|
|
|
|
|
|
|
|
|
16.1
|
%
|
|
Only the line items that are affected by non-GAAP adjustments are
shown. |
| |
|
Merck is providing certain non-GAAP information that excludes
certain items because of the nature of these items and the impact
they have on the analysis of underlying business performance and
trends. Management believes that providing non-GAAP information
enhances investors’ understanding of the company’s results because
management uses non-GAAP measures to assess performance. Management
uses non-GAAP measures internally for planning and forecasting
purposes and to measure the performance of the company along with
other metrics. In addition, annual employee compensation, including
senior management’s compensation, is derived in part using a
non-GAAP pretax income metric. The non-GAAP information presented
should be considered in addition to, but not as a substitute for or
superior to, information prepared in accordance with
GAAP. |
| |
|
(1) Amounts included in cost of sales primarily reflect
expenses for the amortization of intangible assets. Amounts
included in selling, general and administrative expenses reflect
integration, transaction and certain other costs related to
acquisitions and divestitures. Amounts included in research and
development expenses primarily reflect the amortization of
intangible assets. Amounts included in other (income) expense, net,
primarily reflect royalty income related to the prior termination
of the Sanofi-Pasteur MSD joint venture. |
| |
|
(2) Amounts primarily include employee separation costs
and accelerated depreciation associated with facilities to be
closed or divested related to activities under the company's formal
restructuring programs. |
| |
|
(3) Represents the estimated tax impacts on the
reconciling items based on applying the statutory rate of the
originating territory of the non-GAAP adjustments. |
| |
|
MERCK & CO., INC. |
|
FRANCHISE / KEY PRODUCT SALES |
|
(AMOUNTS IN MILLIONS) |
|
(UNAUDITED) |
|
Table 3 |
|
|
|
|
|
|
|
|
|
|
| |
|
|
2024
|
|
2023
|
| 1Q |
|
| 1Q |
| 1Q |
2Q |
3Q |
4Q |
Full Year |
| Nom % |
Ex-Exch % |
|
TOTAL SALES (1) |
$
|
15,775
|
|
$
|
14,487
|
$
|
15,035
|
$
|
15,962
|
$
|
14,630
|
$
|
60,115
|
|
9
|
12
|
| PHARMACEUTICAL |
|
14,006
|
|
|
12,721
|
|
13,457
|
|
14,263
|
|
13,141
|
|
53,583
|
|
10
|
13
|
| Oncology |
|
| |
|
|
|
|
| |
|
| Keytruda |
|
6,947
|
|
|
5,795
|
|
6,271
|
|
6,338
|
|
6,608
|
|
25,011
|
|
20
|
24
|
| Alliance Revenue – Lynparza (2) |
|
292
|
|
|
275
|
|
310
|
|
299
|
|
315
|
|
1,199
|
|
6
|
7
|
| Alliance Revenue – Lenvima (2) |
|
255
|
|
|
232
|
|
242
|
|
260
|
|
226
|
|
960
|
|
10
|
10
|
| Welireg |
|
85
|
|
|
42
|
|
50
|
|
54
|
|
72
|
|
218
|
|
102
|
102
|
| Alliance Revenue – Reblozyl (3) |
|
71
|
|
|
43
|
|
47
|
|
52
|
|
70
|
|
212
|
|
66
|
66
|
| Vaccines (4) |
|
| |
|
|
|
|
| |
|
| Gardasil/Gardasil 9 |
|
2,249
|
|
|
1,972
|
|
2,458
|
|
2,585
|
|
1,871
|
|
8,886
|
|
14
|
17
|
| ProQuad/M-M-R II/Varivax |
|
570
|
|
|
528
|
|
582
|
|
713
|
|
545
|
|
2,368
|
|
8
|
8
|
| Vaxneuvance |
|
219
|
|
|
106
|
|
168
|
|
214
|
|
176
|
|
665
|
|
106
|
106
|
| RotaTeq |
|
216
|
|
|
297
|
|
131
|
|
156
|
|
185
|
|
769
|
|
-27
|
-27
|
| Pneumovax 23 |
|
61
|
|
|
96
|
|
92
|
|
140
|
|
85
|
|
412
|
|
-36
|
-33
|
| Hospital Acute Care |
|
| |
|
|
|
|
| |
|
| Bridion |
|
440
|
|
|
487
|
|
502
|
|
424
|
|
429
|
|
1,842
|
|
-10
|
-8
|
| Prevymis |
|
174
|
|
|
129
|
|
143
|
|
157
|
|
175
|
|
605
|
|
35
|
39
|
| Dificid |
|
73
|
|
|
65
|
|
76
|
|
74
|
|
87
|
|
302
|
|
12
|
12
|
| Zerbaxa |
|
56
|
|
|
50
|
|
54
|
|
53
|
|
61
|
|
218
|
|
13
|
15
|
| Noxafil |
|
56
|
|
|
60
|
|
55
|
|
51
|
|
46
|
|
213
|
|
-7
|
4
|
| Cardiovascular |
|
| |
|
|
|
|
| |
|
| Alliance Revenue - Adempas/Verquvo (5) |
|
98
|
|
|
99
|
|
68
|
|
92
|
|
108
|
|
367
|
|
-1
|
-1
|
| Adempas (6) |
|
70
|
|
|
59
|
|
65
|
|
65
|
|
66
|
|
255
|
|
18
|
18
|
| Virology |
|
| |
|
|
|
|
| |
|
| Lagevrio |
|
350
|
|
|
392
|
|
203
|
|
640
|
|
193
|
|
1,428
|
|
-11
|
-5
|
| Isentress/Isentress HD |
|
111
|
|
|
123
|
|
136
|
|
119
|
|
105
|
|
483
|
|
-10
|
-7
|
| Delstrigo |
|
56
|
|
|
44
|
|
50
|
|
54
|
|
54
|
|
201
|
|
28
|
30
|
| Pifeltro |
|
42
|
|
|
34
|
|
38
|
|
37
|
|
33
|
|
142
|
|
23
|
23
|
| Neuroscience |
|
| |
|
|
|
|
| |
|
| Belsomra |
|
46
|
|
|
56
|
|
63
|
|
58
|
|
54
|
|
231
|
|
-17
|
-11
|
| Immunology |
|
| |
|
|
|
|
| |
|
| Simponi |
|
184
|
|
|
180
|
|
180
|
|
179
|
|
171
|
|
710
|
|
2
|
1
|
| Remicade |
|
39
|
|
|
51
|
|
48
|
|
45
|
|
43
|
|
187
|
|
-24
|
-21
|
| Diabetes (7) |
|
| |
|
|
|
|
| |
|
| Januvia |
|
419
|
|
|
551
|
|
511
|
|
581
|
|
547
|
|
2,189
|
|
-24
|
-21
|
| Janumet |
|
251
|
|
|
329
|
|
354
|
|
255
|
|
240
|
|
1,177
|
|
-24
|
-20
|
| Other Pharmaceutical (8) |
|
576
|
|
|
626
|
|
560
|
|
568
|
|
576
|
|
2,333
|
|
-8
|
-6
|
| ANIMAL HEALTH |
|
1,511
|
|
|
1,491
|
|
1,456
|
|
1,400
|
|
1,278
|
|
5,625
|
|
1
|
4
|
| Livestock |
|
850
|
|
|
849
|
|
807
|
|
874
|
|
808
|
|
3,337
|
|
-
|
4
|
| Companion Animal |
|
661
|
|
|
642
|
|
649
|
|
526
|
|
470
|
|
2,288
|
|
3
|
4
|
| Other Revenues (9) |
|
258
|
|
|
275
|
|
122
|
|
299
|
|
211
|
|
907
|
|
-6
|
11
|
| *200% or
greater |
|
|
|
|
|
|
|
|
|
| Sum of
quarterly amounts may not equal year-to-date amounts due to
rounding. |
| |
|
(1) Only select products are shown. |
| |
|
(2) Alliance Revenue represents Merck’s share of
profits, which are product sales net of cost of sales and
commercialization costs. |
| |
|
(3) Alliance Revenue represents royalties. |
| |
|
(4) Total Vaccines sales were $3,424 million in the
first quarter of 2024 and $3,133 million in the first quarter
2023. |
| |
|
(5) Alliance Revenue represents Merck's share of profits
from sales in Bayer's marketing territories, which are product
sales net of cost of sales and commercialization costs. |
| |
|
(6) Net product sales in Merck's marketing
territories. |
| |
|
(7) Total Diabetes sales were $745 million in the first
quarter of 2024 and $950 million in the first quarter of 2023. |
| |
|
(8) Includes Pharmaceutical products not individually
shown above. |
| |
|
(9) Other Revenues are comprised primarily of revenues
from third-party manufacturing arrangements and miscellaneous
corporate revenues, including revenue-hedging activities. Other
Revenues related to the receipt of upfront and milestone payments
for out-licensed products were $61 million in the first quarter of
2024 and $51 million in the first quarter of 2023. |
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240425889273/en/
Media Contacts:
Robert Josephson
(203) 914-2372
robert.josephson@merck.com
Michael Levey
(215) 872-1462
michael.levey@merck.com
Investor Contacts:
Peter Dannenbaum
(732) 594-1579
peter.dannenbaum@merck.com
Steven Graziano
(732) 594-1583
steven.graziano@merck.com
Merck (NYSE:MRK)
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