RAHWAY, N.J.--(BUSINESS WIRE)--Merck & Co., Inc., Rahway, N.J., USA Announces Third-Quarter 2025 Financial Results. ...

Core Insights - Merck (MRK.US) announced that its dual oral therapy Welireg (belzutifan) combined with lenvatinib met one of its primary endpoints for progression-free survival (PFS) in a Phase III trial for advanced renal cell carcinoma (RCC) patients who had disease progression after prior anti-PD-1/L1 therapy [1] Group 1: Clinical Trial Results - The mid-term analysis showed that the combination of belzutifan and lenvatinib demonstrated statistically significant and clinically meaningful improvement in PFS compared to cabozantinib [2] - The combination therapy also showed statistically significant improvement in the key secondary endpoint of objective response rate (ORR) compared to cabozantinib [2] Group 2: Industry Context - RCC is the most common type of kidney cancer, accounting for approximately 90% of kidney cancer diagnoses [2] - In 2022, there were about 435,000 new cases of kidney cancer globally, with approximately 156,000 deaths attributed to the disease [2] - The incidence of RCC is about twice as high in men compared to women, with around 30% of kidney cancer patients diagnosed at an advanced stage [2]

Core Insights - The pharmaceutical maker's stock has decreased by 12% this year, indicating potential challenges in the market [1] Group 1 - The upcoming third quarter earnings report is anticipated, which may provide insights into the company's financial performance [1]

Core Insights - Merck is scheduled to report its third-quarter earnings on October 30, before market opens [3] - Consensus estimates predict earnings per share of $2.35, representing a year-over-year increase of 49.7% [3] - Revenue is expected to reach $16.98 billion, indicating a 1.7% increase compared to the same period last year [3]

Group 1 - Major technology companies Microsoft, Alphabet, and Meta Platforms are set to report earnings after market close on Wednesday [1] - Healthcare companies Eli Lilly and Company and Merck & Company Inc. will report pre-market on Thursday, followed by Apple Inc. and Amazon.com Inc. after market close [1] - The following week will see further technology earnings reports from Advanced Micro Devices, Arista Networks, QUALCOMM Incorporated, and Arm Holdings after market close on Tuesday and Wednesday [1]

Merck and Japan's Eisai said on Wednesday they will shut down a late-stage study testing an experimental combination therapy to treat a type of liver cancer, after interim results showed the treatment... ...

Core Viewpoint - The European Commission has approved Merck's KEYTRUDA® for the treatment of resectable locally advanced head and neck squamous cell carcinoma, marking a significant advancement in cancer therapy [1] Group 1: Approval Details - KEYTRUDA® (pembrolizumab) is approved as a monotherapy for neoadjuvant treatment of locally advanced head and neck squamous cell carcinoma [1] - The treatment will continue as adjuvant therapy in combination with radiation therapy, with or without concomitant cisplatin [1] - Following the combination therapy, KEYTRUDA® will be administered as a monotherapy in adults [1]

Core Insights - Financial giants are showing a bullish sentiment towards Merck & Co, with 55% of traders being bullish and 44% bearish, indicating a positive outlook on the stock [1] - The predicted price range for Merck & Co over the last three months is between $65.0 and $90.0, suggesting significant investor interest within this territory [2] - Analysts have set a consensus target price of $95.0 for Merck & Co, reflecting a generally optimistic view despite some recent downgrades [10][11] Options Activity - A total of 9 unusual trades were identified for Merck & Co, with 4 puts valued at $268,018 and 5 calls valued at $429,832, highlighting active trading interest [1] - The largest options trades include a bearish call trade with a total value of $183.7K at a strike price of $90.00 and a bullish put trade valued at $145.3K at a strike price of $85.00 [8] - The trading volume for Merck & Co reached 3,711,859, with the stock price slightly increasing by 0.17% to $88.15, indicating ongoing market activity [13] Company Overview - Merck & Co specializes in pharmaceutical products across various therapeutic areas, including cardiometabolic diseases, cancer, and infections, with Keytruda being a significant contributor to sales [9] - The company also has a strong vaccine portfolio aimed at preventing pediatric diseases and human papillomavirus, alongside a range of animal health-related drugs [9] - Approximately 47% of Merck's sales are derived from the US human health sector, emphasizing its strong domestic market presence [9]

Core Viewpoint - Merck is set to report its third-quarter 2025 earnings on October 30, with consensus estimates for sales at $17.06 billion and earnings per share (EPS) at $2.36. Earnings estimates for 2025 have slightly declined from $8.94 to $8.92 per share over the past month [1][6]. Earnings Performance - Merck has consistently exceeded earnings expectations in the last four quarters, with an average earnings surprise of 3.92%. The most recent quarter showed a 5.97% surprise [3][4]. Factors Influencing Upcoming Results - After a weak first half, Merck anticipates growth in the second half, driven by oncology drugs like Keytruda, Animal Health, and new products, although this may be partially offset by lower sales of Gardasil in China and Japan [6][7]. Oncology Drug Performance - Keytruda is expected to drive significant sales growth, with consensus estimates for its sales at $8.4 billion, while internal estimates are slightly higher at $8.51 billion. The drug's sales are bolstered by its uptake in earlier-stage indications and continued momentum in metastatic indications [8][9]. Vaccine and Other Drug Performance - Sales of Gardasil are projected to decline due to reduced demand in China and Japan, with consensus estimates at $1.75 billion, while internal estimates are at $1.70 billion. Other vaccines have also seen declining sales [11][12]. - The diabetes franchise is facing challenges from lower demand and generic competition, impacting sales of Januvia/Janumet [14]. New Product Contributions - New drugs like Winrevair and Capvaxive are contributing to sales growth, with Winrevair showing strong demand in the U.S. market and Capvaxive gaining traction in retail pharmacies [15][24]. Financial Performance and Valuation - Merck's stock has underperformed the industry and the S&P 500, with a year-to-date loss of 11.5% compared to a 5.7% increase for the industry. However, the company's valuation appears attractive, trading at a forward P/E ratio of 9.42, lower than the industry average of 15.58 [17][20]. Investment Thesis - Merck has a robust portfolio with over six blockbuster drugs, primarily driven by Keytruda. The company has also expanded its pipeline significantly, with plans to launch around 20 new vaccines and drugs in the coming years [23][24]. - Despite concerns about dependency on Keytruda and challenges in the non-oncology business, Merck's strong revenue generation from its existing products supports a long-term investment perspective [26][29].

Industry Overview - The pharmaceutical industry is facing challenges including changing drug pricing policies, tariffs, and pressure to increase U.S. manufacturing [2][3] - Investors are particularly focused on potential "most favored nation" drug pricing deals with the Trump administration, following agreements with major companies [3] Company Earnings Preview - **Merck**: Expected to show topline growth driven by demand for immunotherapy Keytruda and new drug launches, though growth may be offset by sluggish sales of Gardasil in China [4] - **Eli Lilly**: Anticipated to report strong results due to growth in diabetes injection Mounjaro and weight loss drug Zepbound, with potential for an increase in full-year guidance [4] - **Bristol Myers Squibb**: Expected to have modest upside, with significant attention on upcoming phase three trial data for Cobenfy in Alzheimer's disease psychosis, which could represent a multi-billion-dollar opportunity [4] - **Gilead**: Core business improvement expected, particularly in the HIV sector, with focus on the launch of the twice-yearly HIV prevention injection Yeztugo and implications of Trump's pricing policy [4] - **AbbVie**: Anticipated to have a solid quarter with improvements in its aesthetics business and continued strength in Skyrizi and Rinvoq, positioning the company to exceed expectations [4]