Merck(US:MRK)2025-05-02 20:10Sales Performance - Merck's worldwide sales for Q1 2025 were $15.5 billion, a decrease of 2% compared to Q1 2024, with declines in vaccines, virology, and immunology, partially offset by growth in oncology, cardiovascular, diabetes, and animal health [162]. - Keytruda sales reached $7.205 billion in Q1 2025, reflecting a 4% increase from Q1 2024, driven by higher demand in early-stage indications and metastatic cancers [164][165]. - Total U.S. sales for Q1 2025 were $8.522 billion, a 14% increase from Q1 2024, while international sales decreased by 16% to $7.007 billion [161]. - Combined worldwide sales of Gardasil and Gardasil 9 declined 41% in Q1 2025, primarily due to lower demand in China, partially offset by higher demand in Japan and the U.S. [173]. - Global sales of ProQuad declined 41% in Q1 2025, with approximately $70 million in sales reduction due to borrowing doses from the CDC Pediatric Vaccine Stockpile [176]. - Worldwide sales of M-M-R II grew 62% in Q1 2025, driven by higher sales in the U.S. due to measles outbreaks and increased pricing [176]. - Global sales of Vaxneuvance grew 5% in Q1 2025, primarily due to continued uptake in pediatric indications in Europe and Asia Pacific [177]. - Sales of Capvaxive reached $107 million in Q1 2025 following its U.S. launch in Q3 2024, with approvals from the FDA and EC supporting its market entry [178]. - Worldwide sales of Prevymis grew 19% in Q1 2025, largely due to higher demand in the U.S. [180]. - Sales of Winrevair were $280 million in Q1 2025, reflecting continued uptake since its launch in Q2 2024 [181]. - Combined sales of Januvia and Janumet increased 19% in Q1 2025, primarily due to higher net pricing in the U.S. [186]. - Livestock product sales grew 9% in Q1 2025, driven by higher demand across all species and the inclusion of sales from the July 2024 acquisition of Elanco's aqua business [189]. - Sales of Lagevrio declined 71% in Q1 2025, primarily due to lower demand in several Asia Pacific markets [184]. - Sales of the Bravecto product line were $327 million in Q1 2025, a decline of 1% year-over-year, but a growth of 2% when excluding foreign exchange effects [190]. Financial Performance - Total costs for Q1 2025 were $9.626 billion, a decrease of 5% compared to $10.105 billion in Q1 2024 [191]. - Gross margin improved to 78.0% in Q1 2025 from 77.6% in Q1 2024, driven by a favorable product mix and lower restructuring costs [193]. - Research and development expenses decreased by 9% to $3.621 billion in Q1 2025, primarily due to a significant charge in the prior year related to an acquisition [195]. - Non-GAAP net income attributable to Merck was $5.611 billion in Q1 2025, compared to $5.279 billion in Q1 2024 [209]. - The effective income tax rate for Q1 2025 was 13.9%, down from 15.9% in Q1 2024, reflecting a favorable geographical mix of income [204]. - Animal Health segment profits increased by 14% to $634 million in Q1 2025, driven by higher sales [203]. - The company recorded restructuring costs of $69 million in Q1 2025, down from $123 million in Q1 2024 [199]. Cash Flow and Investments - Cash provided by operating activities was $2.5 billion in Q1 2025, down from $3.1 billion in Q1 2024, impacted by milestone payments of $700 million [226]. - Cash used in investing activities increased to $1.5 billion in Q1 2025 from $1.4 billion in Q1 2024, primarily due to higher purchases of securities and capital expenditures [227]. - Cash used in financing activities rose to $5.8 billion in Q1 2025 compared to $2.8 billion in Q1 2024, driven by higher long-term debt payments and increased dividends [228]. - The company factored $1.7 billion of accounts receivable as of March 31, 2025, down from $2.1 billion at December 31, 2024 [229]. - Total debt to total liabilities and equity was 30.3% as of March 31, 2025, compared to 31.7% at December 31, 2024 [226]. Strategic Developments - Merck entered an exclusive license agreement with Jiangsu Hengrui Pharmaceuticals for HRS-5346, receiving a $200 million upfront payment and potential future milestone payments [157]. - Merck acquired WuXi Vaccines' Dundalk facility for $437 million, with total assets under construction recorded at $759 million [158]. - The company expects to record a pretax charge of $200 million to R&D expenses upon closing the HRS-5346 agreement, anticipated in Q2 2025 [157]. - The company expects to incur approximately $550 million in charges related to the 2024 Restructuring Program in 2025, with anticipated annual net cost savings of about $750 million by the end of 2031 [198]. - The company has several candidates under regulatory review in the U.S. and internationally [214]. Regulatory and Market Updates - The FDA set a PDUFA date of September 23, 2025, for the BLA of MK-3475A, which is under review for noninferiority to intravenous Keytruda [216]. - The FDA accepted a supplemental New Drug Application for MK-6482, with a PDUFA date of May 26, 2025, for treating advanced pheochromocytoma and paraganglioma [217]. - Patritumab deruxtecan (MK-1022) received a complete response letter from the FDA in June 2024, but no efficacy or safety issues were identified [215]. - The company is working with Daiichi Sankyo to address FDA feedback regarding the BLA for patritumab deruxtecan [215]. - Keytruda is under priority review for the treatment of resectable locally advanced head and neck squamous cell carcinoma, with a PDUFA date of June 23, 2025 [221]. Shareholder Returns - Dividends paid to stockholders were $2.1 billion for Q1 2025, compared to $2.0 billion for Q1 2024 [232]. - Merck purchased $1.2 billion (13 million shares) of its common stock for its treasury in Q1 2025, with plans to continue at this pace for the remainder of 2025 [233]. - The remaining share repurchase authorization as of March 31, 2025, was $11.2 billion [233]. - Merck has a $6.0 billion credit facility maturing in May 2028, which has not been drawn upon [234].