Merck Posts Q Loss on Cidara Charge; Sales Rise 5%

• Keytruda sales rose 12% to $8 billion, exceeding analyst estimates of $7.6 billion, including $128 million from a newer formulation of the world's top-selling prescription drug
• Winrevair sales surged 88% to $525 million, beating expectations of $479 million, while animal health sales jumped 13% to $1.8 billion
• Diabetes drug Januvia sales fell 28% to $574 million due to lower U.S. demand and generic competition, while HPV vaccine Gardasil declined 19% to $1.07 billion

Merck Q1 2025 Summary

Financial Performance:

Merck & Co reported a first-quarter loss driven by acquisition-related charges, despite a 5% increase in product sales. Q1 revenue rose to $16.3 billion from $15.5 billion year-over-year, exceeding Wall Street's estimate of $15.8 billion. The company posted an adjusted loss of $1.28 per share, including a $3.62 per share charge related to its Cidara Therapeutics acquisition.

Full-Year Guidance:

Merck narrowed its 2026 profit forecast to $5.04-$5.16 per share, raising the midpoint. The outlook excludes a planned $2.35 per share one-time charge from an upcoming biotech acquisition. Analysts had projected 2026 profit at $5.12 per share.

Key Product Performance:

• Keytruda (cancer immunotherapy): Sales jumped 12% to $8 billion, beating estimates of $7.6 billion. Results include $128 million from a newer formulation of the world's top-selling prescription drug.

• Winrevair (lung disease): Revenue surged 88% to $525 million, above the $479 million analyst estimate.

• Januvia (diabetes): Sales declined 28% to $574 million due to lower U.S. demand, pricing pressure, and international generic competition.

• Gardasil (HPV vaccine): Revenue fell 19% to $1.07 billion.

• Animal Health: Strong performance with sales rising 13% to $1.8 billion.

Market Implications:

Merck's core oncology and respiratory franchises demonstrate robust growth, offsetting legacy product declines. The Cidara acquisition signals strategic investment in pipeline expansion despite near-term earnings pressure.