Core Viewpoint - Merck (MRK) reported mixed second-quarter results, beating earnings estimates while meeting sales expectations, and narrowed its sales guidance for 2025 despite a less negative impact from currency fluctuations [1][2]. Financial Guidance - Merck now expects revenues to be between $64.3 billion and $65.3 billion, down from the previous range of $64.1 billion to $65.6 billion, reflecting a revised negative impact from foreign exchange of approximately 0.5% [2][10]. - Adjusted EPS is projected to be between $8.87 and $8.97, an increase from the prior range of $8.82 to $8.97, with a revised negative impact of foreign exchange estimated at around 15 cents per share [2][10]. Acquisition Plans - The guidance does not account for the upcoming acquisition of Verona Pharma for approximately $10 billion, expected to close in Q4 2025, which will add Ohtuvayre for chronic obstructive pulmonary disease treatment [3]. Growth Expectations - After a weak sales performance in the first half of 2025, Merck anticipates a return to growth in the second half, driven by oncology drugs like Keytruda, the Animal Health segment, and new products, although lower sales of Gardasil in China and Japan may offset some growth [4][6]. Key Product Performance - Keytruda generated $7.96 billion in sales in Q2 2025, a 9% year-over-year increase, accounting for about 50% of Merck's pharmaceutical sales [5][10]. - The Animal Health segment reported revenues of $1.65 billion, up 11% year-over-year, driven by increased demand for livestock products [5]. New Product Contributions - Winrevair, a new pulmonary arterial hypertension drug, achieved $336 million in sales, a 20% sequential increase, while Capvaxive, a new pneumococcal conjugate vaccine, posted sales of $129 million, up 20.1% [7]. - Both products are viewed as key revenue drivers for long-term growth, especially as Keytruda's exclusivity ends in 2028 [7]. Competitive Landscape - Winrevair is expected to face significant competition in the pulmonary arterial hypertension market from United Therapeutics and Johnson & Johnson, which have established products in this space [8][9][11]. Stock Performance and Valuation - Year-to-date, Merck's shares have declined by 18.8%, compared to an 8.2% decrease in the industry [12]. - Merck's shares trade at a forward price/earnings ratio of 8.64, lower than the industry average of 13.71 and its 5-year mean of 12.79, indicating attractive valuation [13]. Earnings Estimates - The Zacks Consensus Estimate for 2025 earnings has increased from $8.88 to $8.92 per share, while the estimate for 2026 has decreased from $9.70 to $9.61 over the past 30 days [14].

Core Insights - Merck's Keytruda, a PD-L1 inhibitor, is the primary revenue source, contributing approximately 50% of pharmaceutical sales and driving top-line growth [1] - The company is heavily reliant on Keytruda, which is set to lose exclusivity in 2028, prompting strategies for long-term growth [2][3] - Merck is developing a subcutaneous formulation of Keytruda and diversifying its product lineup, particularly in non-oncology areas [3] Winrevair Development - Merck is optimistic about Winrevair, a newly launched pulmonary arterial hypertension (PAH) drug, to enhance revenue post-Keytruda exclusivity [4] - Winrevair received FDA approval in March 2024 based on the STELLAR study, with EU approval following in August 2024 [4] - The drug has shown significant efficacy in late-stage studies, leading to early stoppages due to overwhelming results [6][8] Regulatory Updates - The FDA has accepted Merck's supplemental biologics license application (sBLA) for Winrevair, with a decision expected on October 25, 2025 [7][10] - The ZENITH study demonstrated a meaningful reduction in morbidity or mortality events, supporting the drug's efficacy [6] Financial Performance - Winrevair generated $280 million in sales in Q1 2025, with expectations for increased revenue following a successful label update [11] - Merck's shares have decreased by 17.1% year-to-date, contrasting with a 0.6% decline in the industry [15] - The company's price/earnings ratio is currently 8.84, lower than the industry average of 15.05, indicating attractive valuation [16] Market Competition - Winrevair faces strong competition in the PAH market from United Therapeutics and Johnson & Johnson, which have established products and significant sales [11][12]

Core Insights - United Therapeutics reported $794.4 million in revenue for Q1 2025, a 17.2% increase year-over-year, with an EPS of $6.63 compared to $6.17 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $726.19 million by 9.39%, and the EPS also surpassed the consensus estimate of $6.29 by 5.41% [1] Revenue Breakdown - U.S. Revenues: $749.60 million, exceeding the average estimate of $695.02 million, representing a 16.9% year-over-year increase [4] - Rest-of-World Revenues: $44.80 million, surpassing the average estimate of $27.05 million, reflecting a 23.8% year-over-year increase [4] - Tyvaso Revenue in the U.S.: $441.10 million, compared to the average estimate of $405.30 million [4] - Remodulin Revenue in the U.S.: $120.20 million, exceeding the average estimate of $113.15 million [4] - Adcirca Revenue: $6 million, below the average estimate of $4.77 million, showing a 6.3% decrease year-over-year [4] - Orenitram Revenue: $120.70 million, surpassing the average estimate of $111.47 million, with a 13.7% year-over-year increase [4] - Tyvaso Revenue: $466.30 million, exceeding the average estimate of $413.63 million, with a remarkable 105% year-over-year increase [4] - Remodulin Revenue: $138.20 million, above the average estimate of $126.42 million, reflecting an 8% year-over-year increase [4] - Unituxin Revenue: $58.20 million, below the average estimate of $62.95 million, showing a 0.3% decrease year-over-year [4] - Tyvaso DPI Revenue: $302.50 million, exceeding the average estimate of $271.57 million [4] - Nebulized Tyvaso Revenue: $163.80 million, surpassing the average estimate of $137.44 million [4] - Other Products Revenue: $5 million, below the average estimate of $5.68 million, reflecting a 19.4% decrease year-over-year [4] Stock Performance - Shares of United Therapeutics have returned -2% over the past month, compared to the Zacks S&P 500 composite's -0.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Safe Harbor Statement All statements in this presentation are made as of April 30, 2025. We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events, or otherwise. Statements included in this presentation that are not historical in nature are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, among others, statements related to our revenue growth expec ...