Merck Pauses Gardasil Shipments to China, Outlook Dims

Key Highlights:

* Merck halts Gardasil shipments to China until mid-year due to weak demand.
* 2025 revenue forecast lowered to $64.1-$65.6 billion, below analyst estimates.
* Gardasil demand plummets in China amid economic challenges and anti-bribery campaign.
* Strong Keytruda sales offset Gardasil shortfall, driving revenue growth.

Financial Performance:

* Q4 EPS excluding one-time items: $1.72, exceeding analyst expectations of $1.62.
* Q4 total revenue: $15.6 billion, up from $14.6 billion year-over-year.
* Keytruda sales: $7.8 billion, surpassing analyst forecasts.

Market Impact:

* Merck shares fell nearly 8% in premarket trading to $91.84.
* Shares have declined over 20% since July amid Gardasil sales concerns.

Outlook:

* Merck anticipates 2025 revenue of $64.1-$65.6 billion.
* 2025 EPS forecast: $8.88-$9.03 per share, slightly below analyst estimates.

Additional Context:

* Gardasil is an HPV vaccine that has been a significant growth driver for Merck.
* Chinese sales of Gardasil slowed significantly in Q2 2024.
* Merck attributes weak demand to economic factors and China's anti-corruption drive.