Core Viewpoint - Merck's Q3 sales reached $17.28 billion, exceeding market expectations, with adjusted EPS of $2.58, significantly surpassing Wall Street forecasts and last year's $1.57 [2][3] Financial Performance - Q3 sales of $17.28 billion exceeded the expected $16.96 billion, driven by strong performance from the pneumonia vaccine Capvaxive, which generated $244 million in sales, also above analyst estimates [3][4] - Merck adjusted its 2025 sales guidance down by $300 million, now expecting full-year sales of $64.5 billion to $65 billion, up from a previous estimate of $64.3 billion to $65.3 billion [3] - The company slightly raised its full-year profit forecast to $8.98 per share, from a prior estimate of $8.87 to $8.97 [3] Product Highlights - Capvaxive emerged as a standout product, with Q3 sales of $244 million, outperforming Wall Street expectations [4] - Capvaxive has the potential to become a preferred product, as it can prevent 80% of pathogenic strains in adults, compared to Pfizer's Prevnar, which covers only 50% [4] Cost Management - The company is actively implementing cost control measures in preparation for the patent expiration of Keytruda, with R&D spending down over $1.6 billion year-over-year [6] - Merck announced plans to cut annual spending by $3 billion by the end of 2027, primarily through workforce reductions and real estate holdings [6] Regulatory and Market Challenges - Merck faces potential tariff threats, with competitors like Pfizer and AstraZeneca negotiating agreements for drug discounts in exchange for tariff exemptions [7] - The company has stockpiled sufficient Keytruda inventory to mitigate tariff impacts this year and plans to invest over $9 billion in domestic manufacturing over the next four years [7] - Merck also faces challenges from government recommendations regarding its ProQuad vaccine, which may affect its market position [7]

Group 1: Vaccine Review and Recommendations - The reformed U.S. vaccine advisory group is set to vote on a mercury-containing compound and a common childhood vaccine, following a decision to reassess the childhood vaccination schedule [1] - The Advisory Committee on Immunization Practices (ACIP) will determine which flu virus strains to include in the fall vaccines and will vote on the use of thimerosal, a mercury-based preservative [1] - The committee will also review the use of the MMRV vaccine in children under four years old, which is typically administered to infants aged 12 to 15 months [1][3] Group 2: Changes in Advisory Committee Membership - U.S. Health and Human Services Secretary Robert F. Kennedy Jr. recently dismissed previous vaccine experts from ACIP and appointed new members, many of whom oppose vaccination [2] - The restructured expert group will review current childhood immunization schedules, including vaccines that have not been reviewed in seven years, such as the hepatitis B vaccine [2] Group 3: Concerns Over Vaccine Safety and Efficacy - The discussion on the MMRV vaccine comes amid a measles outbreak in the U.S., which has resulted in fatalities [3] - Concerns have been raised that the committee may decide against recommending the MMRV vaccine, which has been in use for over 15 years without evidence of safety issues [3] - If the MMRV vaccine is not recommended, it could negatively impact Merck's revenue, as the ProQuad vaccine generates approximately $2.5 billion annually for the company [3] Group 4: Thimerosal Controversy - Thimerosal has faced opposition from anti-vaccine advocates who claim it may cause autism, despite the FDA stating it has not been proven to pose safety risks [4] - Robert F. Kennedy Jr. has been a vocal opponent of thimerosal, advocating for its removal from vaccines [4] Group 5: Other Vaccine Discussions - The committee will also discuss the chikungunya vaccine, which is not included in the federal adult immunization schedule and is intended for international travelers [5] - Concerns have been expressed that the actions of anti-vaccine committee members are undermining public trust in vaccines and the healthcare system [5]