Merck Posts Strong Q3 on Oncology, Vaccine Growth

Key Moments

Third-Quarter Performance Exceeds Market Expectations

By Michael Erman

Merck reported third-quarter results that came in ahead of Wall Street projections, supported by continued strength in its oncology franchise and vaccines portfolio. The announcement pushed the company’s shares up nearly 3% in premarket trading.

The US-based pharmaceutical company posted quarterly revenue of $18.1 billion, topping the average analyst estimate of $17.3 billion, based on LSEG data. Adjusted earnings for the period were $2.49 per share, beating expectations of $2.08 per share.

Merck said that approximately $550 million of its quarterly revenue growth reflected customers pulling forward drug purchases earlier than the company had anticipated.

Keytruda and Gardasil Lead Revenue Growth

Sales of immunotherapy Keytruda – described as one of the world’s top-selling medicines – increased 6% year-over-year to $8.6 billion, above analyst forecasts of $8.0 billion. This figure included $830 million in revenue from Keytruda QLEX, the subcutaneous formulation that received approval late last year.

Gardasil, Merck’s HPV vaccine, also recorded notable gains. After recent quarters marked by soft demand in China, revenue from Gardasil rose 14% to just under $2 billion, exceeding Wall Street expectations of $1.8 billion. The company said the vaccine’s performance benefited from early purchases by the US Centers for Disease Control and Prevention. Gardasil is used to prevent cancers associated with human papillomavirus infection.

Updated Full-Year Guidance

On the back of the quarterly beat, Merck revised its full-year outlook. The company lifted the lower bound of its revenue forecast to $66.8 billion from a prior $66.3 billion, while keeping the upper end unchanged at $67.3 billion.

Merck also raised its adjusted earnings guidance. It now projects full-year profit of $2.77 to $2.82 per share, compared with the earlier range of $2.66 to $2.76 per share.

Diversification Strategy Beyond Keytruda

Merck has been pursuing a strategy to broaden its portfolio as Keytruda approaches a loss of key patent protections beginning in 2028. The company has deployed billions of dollars on acquisitions and licensing agreements to build future revenue streams that could offset anticipated biosimilar competition.

Among its newer growth drivers, pulmonary arterial hypertension therapy Winrevair contributed $694 million in the quarter. That represented a 94% increase from the same period a year earlier and surpassed Wall Street expectations of $645 million.

Oncology Pipeline and mRNA Vaccine Progress

Merck and its partner Moderna recently released clinical data showing that their mRNA-based cancer vaccine significantly lowered the risk of death or melanoma recurrence when administered together with Keytruda. The companies said this represented the first successful late-stage trial outcome for an mRNA cancer vaccine.

Merck’s shares advanced 12% in August after the partners initially disclosed that the trial met its goals, even though detailed results had not yet been presented. The stock then pulled back last week when the full dataset was made public.

Market Performance and Product Metrics

Merck’s stock ended Wednesday’s session at $140.93 and is up around 34% so far this year, outpacing the broader market.

Selected Financial and Product Highlights