Core Insights - Merck reported revenue of $15.78 billion for Q1 2024, an increase of 8.9% year-over-year, with EPS at $2.07 compared to $1.40 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate by 2.95%, while EPS surpassed the consensus estimate by 6.70% [1] Financial Performance Metrics - Hospital Acute Care sales for Bridion in the U.S. reached $329 million, exceeding the average estimate of $301.76 million, marking a year-over-year increase of 19.2% [3] - International sales for Bridion were $111 million, below the average estimate of $124.70 million, reflecting a year-over-year decline of 47.1% [3] - Oncology sales for Keytruda in the U.S. were $4.12 billion, matching analyst estimates and showing an 18.2% increase year-over-year [3] - Animal health segment revenues totaled $1.51 billion, slightly below the average estimate of $1.55 billion, with a year-over-year increase of 1.3% [3] - Sales for Pneumovax vaccines were $61 million, below the average estimate of $70.63 million, representing a year-over-year decline of 36.5% [3] - Sales for RotaTeq vaccines were $216 million, below the average estimate of $260.45 million, indicating a year-over-year decrease of 27.3% [3] - Sales for ProQuar/M-M-R II/Varivax vaccines were $570 million, exceeding the average estimate of $544.16 million, with an 8% year-over-year increase [3] - Sales for Gardasil vaccines were $2.25 billion, slightly below the average estimate of $2.28 billion, reflecting a 14.1% year-over-year increase [3] - Alliance revenue for Reblozyl was $71 million, surpassing the average estimate of $68.77 million, with a significant year-over-year increase of 65.1% [3] - Alliance revenue for Lenvima was $255 million, below the average estimate of $265.43 million, showing a year-over-year increase of 9.9% [3] Stock Performance - Merck's shares have returned -3.6% over the past month, compared to a -3% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

[First-Quarter 2024 Financial Results](index=1&type=section&id=First-Quarter%202024%20Financial%20Results) [Financial Highlights & Summary](index=1&type=section&id=Financial%20Highlights%20%26%20Summary) Merck reported strong Q1 2024 results with a 9% increase in worldwide sales to $15.8 billion, driven by robust growth in Oncology and Vaccines, and raised its full-year outlook Q1 2024 Financial Summary | Metric | Q1 2024 | Q1 2023 | Change | Change (Ex-FX) | | :--- | :--- | :--- | :--- | :--- | | **Sales** | $15,775 Million | $14,487 Million | 9% | 12% | | **GAAP Net Income** | $4,762 Million | $2,821 Million | 69% | 76% | | **Non-GAAP Net Income** | $5,279 Million | $3,564 Million | 48% | 54% | | **GAAP EPS** | $1.87 | $1.11 | 68% | 76% | | **Non-GAAP EPS** | $2.07 | $1.40 | 48% | 54% | - Sales growth was primarily driven by strong performance in the Oncology and Vaccines portfolios[1](index=1&type=chunk) - KEYTRUDA sales grew **20%** to **$6.9 billion**, and GARDASIL/GARDASIL 9 sales grew **14%** to **$2.2 billion**[1](index=1&type=chunk) - The company raised and narrowed its full-year 2024 worldwide sales outlook to between **$63.1 billion** and **$64.3 billion**, and its Non-GAAP EPS range to between **$8.53** and **$8.65**[1](index=1&type=chunk) [Sales Performance Review](index=3&type=section&id=Sales%20Performance%20Review) Total sales grew 9% to $15.8 billion, driven by the Pharmaceutical segment's 10% increase, primarily from KEYTRUDA and GARDASIL [Pharmaceutical Sales](index=3&type=section&id=Pharmaceutical%20Sales) Pharmaceutical sales rose 10% to $14.0 billion, driven by strong growth in KEYTRUDA and GARDASIL, while JANUVIA/JANUMET declined due to generics Top Pharmaceutical Product Sales (Q1 2024 vs Q1 2023) | Product | Q1 2024 Sales ($ Million) | Q1 2023 Sales ($ Million) | Change | Change (Ex-FX) | | :--- | :--- | :--- | :--- | :--- | | **KEYTRUDA** | 6,947 | 5,795 | 20% | 24% | | **GARDASIL/GARDASIL 9** | 2,249 | 1,972 | 14% | 17% | | **JANUVIA/JANUMET** | 670 | 880 | -24% | -21% | | **PROQUAD, M-M-R II, VARIVAX** | 570 | 528 | 8% | 8% | | **BRIDION** | 440 | 487 | -10% | -8% | | **VAXNEUVANCE** | 219 | 106 | 106% | 106% | - KEYTRUDA's growth was driven by increased uptake in earlier-stage indications like triple-negative breast cancer and renal cell carcinoma, as well as continued strong demand in metastatic indications[7](index=7&type=chunk) - GARDASIL's growth was attributed to strong demand, particularly in China, which also benefited from the timing of shipments, and public-sector buying patterns in the U.S[7](index=7&type=chunk) [Animal Health Sales](index=4&type=section&id=Animal%20Health%20Sales) Animal Health sales increased 1% to $1.5 billion, primarily due to higher pricing offsetting lower volumes, with Companion Animal sales up 3% Animal Health Sales Breakdown (Q1 2024 vs Q1 2023) | Segment | Q1 2024 Sales ($ Million) | Q1 2023 Sales ($ Million) | Change | Change (Ex-FX) | | :--- | :--- | :--- | :--- | :--- | | **Total Animal Health** | 1,511 | 1,491 | 1% | 4% | | **Livestock** | 850 | 849 | 0% | 4% | | **Companion Animal** | 661 | 642 | 3% | 4% | - Growth was primarily driven by higher pricing, which was partially offset by lower volumes[8](index=8&type=chunk) - Sales of BRAVECTO were **$332 million**, representing growth of **6%** (**7%** ex-FX)[8](index=8&type=chunk) [Expense and Earnings Analysis](index=4&type=section&id=Expense%20and%20Earnings%20Analysis) Profitability improved in Q1 2024 with expanded gross margins and decreased R&D expenses, leading to substantial growth in both GAAP and Non-GAAP EPS [GAAP Results Analysis](index=5&type=section&id=GAAP%20Results%20Analysis) GAAP Gross Margin increased to 77.6% due to favorable product mix, while R&D expenses decreased to $4.0 billion, leading to higher GAAP EPS - Gross margin increased to **77.6%** from 72.9% in Q1 2023, primarily due to favorable product mix (including lower royalty rates for KEYTRUDA and GARDASIL/GARDASIL 9)[12](index=12&type=chunk) - R&D expenses decreased to **$4.0 billion**, primarily due to lower charges for business development activity compared to the prior year[13](index=13&type=chunk) - The effective tax rate was **15.9%**, compared with 22.6% in Q1 2023[14](index=14&type=chunk) [Non-GAAP Results Analysis](index=5&type=section&id=Non-GAAP%20Results%20Analysis) Non-GAAP Gross Margin improved to 81.2% due to favorable product mix, with Non-GAAP R&D expenses decreasing, resulting in higher Non-GAAP EPS of $2.07 - Non-GAAP gross margin increased to **81.2%** from 76.9% in Q1 2023, driven by favorable product mix and foreign exchange[15](index=15&type=chunk) - Non-GAAP R&D expenses were **$4.0 billion**, down from $4.3 billion in Q1 2023, due to lower charges for business development[17](index=17&type=chunk) - The non-GAAP effective tax rate was **16.1%**, compared to 20.4% in the prior year[18](index=18&type=chunk) [GAAP to Non-GAAP Reconciliation](index=6&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation) Reconciliation from GAAP EPS of $1.87 to Non-GAAP EPS of $2.07 reflects a $0.20 per share difference, primarily from acquisition and restructuring cost adjustments Q1 2024 EPS Reconciliation | Item | Per Share Amount | | :--- | :--- | | **GAAP EPS** | **$1.87** | | Difference | $0.20 | | **Non-GAAP EPS** | **$2.07** | Q1 2024 Excluded Items (Pre-tax, $ Million) | Item | Amount ($ Million) | | :--- | :--- | | Acquisition- and divestiture-related costs | $496 | | Restructuring costs | $246 | | Income from investments in equity securities | ($116) | [Pipeline and Portfolio Developments](index=7&type=section&id=Pipeline%20and%20Portfolio%20Developments) Merck achieved significant regulatory and clinical milestones, including FDA approval for WINREVAIR, expanded KEYTRUDA indications, positive vaccine data, and the acquisition of Harpoon Therapeutics - Received FDA approval for **WINREVAIR**, a first-in-class biologic for adults with pulmonary arterial hypertension (PAH)[21](index=21&type=chunk) - **KEYTRUDA** received European approval for resectable NSCLC and FDA Priority Review for frontline advanced endometrial cancer[22](index=22&type=chunk) - Shared positive Phase 3 data for **V116**, an investigational 21-valent pneumococcal conjugate vaccine for adults[23](index=23&type=chunk) - Completed the acquisition of **Harpoon Therapeutics**, expanding the oncology pipeline with novel T-cell engagers[26](index=26&type=chunk) - Announced plans for clinical trials of a new multi-valent HPV vaccine and a single-dose regimen for **GARDASIL 9**[23](index=23&type=chunk) [Full-Year 2024 Financial Outlook](index=9&type=section&id=Full-Year%202024%20Financial%20Outlook) Merck raised its full-year 2024 financial guidance, with worldwide sales now expected between $63.1 billion and $64.3 billion and Non-GAAP EPS between $8.53 and $8.65 Full-Year 2024 Financial Outlook | Metric | Updated 2024 Outlook | Prior 2024 Outlook | | :--- | :--- | :--- | | **Sales** | $63.1 to $64.3 billion | $62.7 to $64.2 billion | | **Non-GAAP Gross Margin** | Approx. 81% | Approx. 80.5% | | **Non-GAAP Operating Expenses** | $25.2 to $26.1 billion | $25.1 to $26.1 billion | | **Non-GAAP EPS** | $8.53 to $8.65 | $8.44 to $8.59 | - The sales outlook includes an estimated negative impact of approximately **3%** from foreign exchange[34](index=34&type=chunk) - The Non-GAAP EPS outlook includes a charge of **$0.26 per share** for the Harpoon acquisition and an estimated negative foreign exchange impact of approximately **$0.30 per share**[36](index=36&type=chunk) [Appendix: Detailed Financial Tables](index=13&type=section&id=Appendix%3A%20Detailed%20Financial%20Tables) [Consolidated Statement of Income (GAAP)](index=13&type=section&id=Consolidated%20Statement%20of%20Income%20(GAAP)) The GAAP consolidated statement of income for Q1 2024 shows total sales of $15.775 billion, with net income attributable to Merck at $4.762 billion, resulting in diluted EPS of $1.87 Q1 2024 Consolidated Statement of Income (GAAP, $ Million) | Line Item | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | **Sales** | 15,775 | 14,487 | 9% | | Cost of sales | 3,540 | 3,926 | -10% | | Research and development | 3,992 | 4,276 | -7% | | **Income Before Taxes** | 5,670 | 3,650 | 55% | | **Net Income Attributable to Merck** | 4,762 | 2,821 | 69% | | **Earnings per Share (Diluted)** | $1.87 | $1.11 | 68% | [GAAP to Non-GAAP Reconciliation](index=14&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation) This table details the reconciliation of Q1 2024 GAAP to Non-GAAP results, adjusting for acquisition and restructuring costs to reconcile income before taxes and EPS Q1 2024 GAAP to Non-GAAP Reconciliation Summary ($ Million) | Line Item | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | **Income Before Taxes** | 5,670 | 626 | 6,296 | | **Net Income Attributable to Merck** | 4,762 | 517 | 5,279 | | **Earnings per Share (Diluted)** | $1.87 | $0.20 | $2.07 | [Franchise / Key Product Sales](index=15&type=section&id=Franchise%20%2F%20Key%20Product%20Sales) This table provides a detailed breakdown of Q1 2024 sales by franchise and key products, highlighting top performers like KEYTRUDA, GARDASIL, and Animal Health Select Product Sales (Q1 2024 vs Q1 2023, $ Million) | Product/Franchise | Q1 2024 | Q1 2023 | Nom % Change | | :--- | :--- | :--- | :--- | | **Total Sales** | 15,775 | 14,487 | 9% | | **Pharmaceutical** | 14,006 | 12,721 | 10% | | Keytruda | 6,947 | 5,795 | 20% | | Gardasil/Gardasil 9 | 2,249 | 1,972 | 14% | | Januvia/Janumet (Total) | 670 | 880 | -24% | | **Animal Health** | 1,511 | 1,491 | 1% |

Core Insights - Merck reported strong first-quarter results, exceeding expectations in both revenue and adjusted earnings, driven by sales of Keytruda and vaccine products [1][2] - The company raised its full-year revenue forecast to between $63.1 billion and $64.3 billion, and adjusted earnings per share to $8.53 to $8.65, reflecting positive growth outlook [1][2] Financial Performance - First-quarter adjusted earnings per share were $2.07, surpassing the expected $1.88, while revenue reached $15.78 billion, exceeding the forecast of $15.20 billion [2] - Net income for the quarter was $4.76 billion, or $1.87 per share, compared to $2.82 billion, or $1.11 per share, in the same period last year [2] - Revenue increased by 9% year-over-year, indicating strong performance despite upcoming patent expirations for Keytruda [2] Strategic Initiatives - Merck is preparing for the patent expiration of Keytruda in 2028, which is expected to impact sales, but has new drug launches and deals to mitigate losses [2][3] - The recent approval of Winrevair, a treatment for a severe lung condition, is projected to generate worldwide sales of up to $5 billion by 2030 [3] - The company is implementing a restructuring program aimed at improving its manufacturing network, with $246 million in charges recorded in the first quarter [3]

Core Viewpoint - Merck is expected to report Q1 2024 results with revenue of $15.2 billion and adjusted earnings of $1.97, driven primarily by Keytruda and Gardasil sales growth [1][4]. Financial Performance - Merck's stock has increased by 55% from $80 in January 2021 to approximately $125 currently, outperforming the S&P 500's 35% increase during the same period [1]. - The stock performance has been inconsistent, with returns of -6% in 2021, 45% in 2022, and -2% in 2023, underperforming the S&P 500 in 2021 and 2023 [2]. - The previous quarter's revenue was $14.6 billion, a 6% year-over-year increase, primarily due to Keytruda and Gardasil sales [4]. Key Growth Drivers - Keytruda is projected to generate around $7 billion in quarterly sales, reflecting high teens year-over-year growth, while Gardasil is expected to see mid-teens sales growth [1][5]. - Keytruda has received five new U.S. FDA approvals since October, which is anticipated to support its sales growth [5]. - Gardasil is experiencing strong demand in China, a trend expected to continue [5]. Valuation and Market Position - Merck's current valuation is estimated at $134 per share, closely aligned with its market price of $127, trading at 5x revenues compared to a 4.5x average over the last five years [3]. - The company expects full-year 2024 revenue to be between $62.7 billion and $64.2 billion, with earnings projected between $8.44 and $8.59 per share [4].

Core Viewpoint - Merck is expected to report first-quarter 2024 results on April 25, with a consensus estimate for total revenues at $15.34 billion, driven by strong sales of its key products, particularly Keytruda and Gardasil [1][2]. Group 1: Revenue Estimates and Key Products - The Zacks Consensus Estimate for Merck's Pharmaceutical unit is $13.53 billion, with an estimate of $6.80 billion for Keytruda sales, which accounts for approximately 42% of the company's pharmaceutical sales [2][3]. - Keytruda's sales growth is attributed to increased uptake in earlier-stage indications and its recent approval for early-stage non-small cell lung cancer [2][3]. - Gardasil sales are expected to reach $2.28 billion, with growth driven by strong international demand and higher pricing in the U.S. [4][5]. Group 2: Strategic Initiatives and Product Pipeline - Merck is pursuing innovative strategies to enhance Keytruda's long-term growth, including combinations with other immuno-oncology agents and a partnership with Moderna for a personalized mRNA therapeutic cancer vaccine [4][5]. - The company is expanding its manufacturing capacity for Gardasil and targeting broader age cohorts for vaccination [5]. - Merck has eight potential new product approvals expected between 2025 and 2030, with V116 and Winrevair identified as significant revenue generators [6]. Group 3: Earnings Performance and Market Position - Merck has consistently beaten earnings expectations, with an average earnings surprise of 38.17% over the last four quarters [8]. - The stock has increased by 8.5% over the past year, compared to a 13.0% increase for the industry [8]. - Despite a strong product lineup, concerns remain about Merck's dependency on Keytruda and the need for diversification ahead of its patent expiration post-2028 [3][6].

Core Viewpoint - Analysts forecast Merck (MRK) to report quarterly earnings of $2.01 per share, reflecting a year-over-year increase of 43.6%, with revenues expected to reach $15.34 billion, a 5.9% increase compared to the previous year [1] Group 1: Earnings and Revenue Estimates - The consensus EPS estimate has been revised upward by 7% over the last 30 days, indicating analysts' reassessment of their initial forecasts [1] - The anticipated quarterly earnings of $2.01 per share and revenues of $15.34 billion highlight positive growth expectations for Merck [1] Group 2: Specific Sales Projections - Analysts project 'Sales- Oncology- Alliance revenue- Reblozyl' at $68.77 million, a year-over-year increase of 59.9% [2] - The consensus estimate for 'Sales- Vaccines- Pneumovax' is $70.63 million, indicating a decline of 26.4% from the prior year [2] - 'Sales- Vaccines- ProQuar/M-M-R II/Varivax' is estimated at $544.16 million, reflecting a 3.1% increase year over year [2] Group 3: Additional Sales Metrics - 'Sales- Alliance revenue- Lenvima' is expected to reach $265.43 million, showing a year-over-year increase of 14.4% [3] - 'Sales- Hospital Acute Care- Bridion - U.S.' is projected at $301.76 million, indicating a 9.3% increase from the previous year [3] - 'Sales- Oncology- Keytruda - U.S.' is anticipated to be $4.12 billion, reflecting an 18.2% increase year over year [3] Group 4: Animal Health and Vaccine Sales - 'Sales- Animal health - International' is forecasted at $1.05 billion, a 4.2% increase from the prior year [4] - 'Sales- Animal health - U.S.' is expected to be $495.47 million, indicating a 2.8% year-over-year increase [4] - 'Sales- Vaccines- Pneumovax - U.S.' is projected at $28.41 million, reflecting a decline of 29% from the previous year [4] Group 5: Market Performance - Over the past month, Merck shares have returned +1.6%, contrasting with the Zacks S&P 500 composite's -4% change [4]

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The most recent trading session ended with Merck (MRK) standing at $125.37, reflecting a +0.25% shift from the previouse trading day's closing. The stock's change was more than the S&P 500's daily loss of 0.58%. Meanwhile, the Dow lost 0.12%, and the Nasdaq, a tech-heavy index, lost 1.15%.Shares of the pharmaceutical company witnessed a gain of 2.34% over the previous month, beating the performance of the Medical sector with its loss of 6.07% and the S&P 500's loss of 1.09%.Investors will be eagerly watchin ...

There's a new reason to believe that their joint projects are going well.According to some new data revealed by Moderna (MRNA -0.12%) at the American Association for Cancer Research Annual Meeting on April 8, the biotech responsible for the Spikevax coronavirus vaccine may have another blockbuster drug in the works, this time a personalized cancer vaccine (PCV) for head and neck cancers that it's developing in conjunction with Merck (MRK -0.47%).It's a no-brainer that favorable data makes for favorable sent ...

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