Merck & Co., Inc., Rahway, N.J., USA Announces Third-Quarter 2025 Financial Results

Merck & Co. reported robust third-quarter 2025 financial results, with worldwide sales increasing 4% to $17.3 billion and non-GAAP EPS rising 64% to $2.58. This growth was primarily fueled by strong performance from KEYTRUDA, which saw sales climb 10% to $8.1 billion, and the rapid uptake of WINREVAIR, which surged 141% to $360 million, despite a 24% decline in GARDASIL/GARDASIL 9 sales. The company also advanced its pipeline with FDA approval for subcutaneous KEYTRUDA QLEX, positive Phase 3 results for its oral PCSK9 inhibitor Enlicitide Decanoate, and completed the acquisition of Verona Pharma. Reflecting these developments, Merck raised and narrowed its full-year 2025 non-GAAP EPS guidance to $8.93-$8.98, while reiterating its sales outlook of $64.5 billion to $65.0 billion.

Analysis

Merck & Co. delivered a robust third quarter 2025 performance, with worldwide sales increasing 4% year-over-year to $17.3 billion and non-GAAP EPS surging 64% to $2.58. This growth was primarily fueled by KEYTRUDA, which saw sales climb 10% to $8.1 billion, and the significant uptake of WINREVAIR, which grew 141% to $360 million, despite a 24% decline in GARDASIL/GARDASIL 9 sales due to lower demand in China. The company's non-GAAP gross margin improved to 81.9% from 80.5% in Q3 2024, reflecting favorable product mix and operational efficiency.

Strategic advancements underscore the company's pipeline strength and portfolio diversification. Key milestones include FDA approval for KEYTRUDA QLEX, a subcutaneous formulation, across all solid tumor indications, and positive Phase 3 results for the oral PCSK9 inhibitor Enlicitide Decanoate, positioning it as a potential first-in-class treatment for hypercholesterolemia. The completed acquisition of Verona Pharma, adding the COPD maintenance treatment OHTUVAYRE, further strengthens Merck's cardio-pulmonary portfolio.

Reflecting this positive momentum, Merck raised and narrowed its full-year 2025 non-GAAP EPS guidance to $8.93-$8.98, citing operational improvements and a benefit from an amended AstraZeneca collaboration, partially offset by the Verona Pharma acquisition and foreign exchange impacts. The company's commitment to long-term growth is further evidenced by a $3 billion investment in a new manufacturing Center of Excellence, part of a broader $70 billion pledge to U.S. manufacturing and R&D.

Key Decisions for Investors

• Investors should monitor the continued market penetration and revenue contribution of new products like WINREVAIR and CAPVAXIVE, given their strong initial uptake.
• Evaluate the long-term impact of KEYTRUDA QLEX's subcutaneous approval on patient convenience and competitive positioning within the oncology market.
• Assess the progress of late-stage pipeline assets, particularly Enlicitide Decanoate, and the integration success of recent acquisitions like Verona Pharma for sustained growth drivers.