Merck Reports $15.5 Billion Revenue in Q1 2025, Net Income Increases to $5.1 Billion

Merck & Co., Inc. reported a total revenue of $15.5 billion for the first quarter of 2025, reflecting a 2% decrease from $15.8 billion in the same period of 2024. The decline was attributed to lower sales in vaccines, virology, and immunology, which were partially offset by growth in oncology, cardiovascular, diabetes, and animal health segments. Notably, sales of the Gardasil vaccine dropped significantly due to reduced demand in China, while the oncology franchise, led by Keytruda, saw a 4% increase in sales, reaching $7.2 billion.

The company's net income for the first quarter of 2025 was $5.1 billion, up from $4.8 billion in the prior year, resulting in basic earnings per share of $2.01, compared to $1.88 in the first quarter of 2024. This increase in profitability was supported by a reduction in the cost of sales, which fell by 3% to $3.4 billion, and a decrease in research and development expenses, which declined by 9% to $3.6 billion. The gross margin improved to 78.0% from 77.6% year-over-year, primarily due to a favorable product mix and lower restructuring costs.

Strategically, Merck has been active in expanding its portfolio through acquisitions and licensing agreements. In March 2025, the company entered into an exclusive license agreement with Jiangsu Hengrui Pharmaceuticals for HRS-5346, an investigational Lipoprotein(a) inhibitor, with an upfront payment of $200 million. Additionally, Merck acquired a facility from WuXi Vaccines for $437 million, which will enhance its manufacturing capabilities. These moves are part of Merck's ongoing strategy to bolster its research and development pipeline and improve operational efficiency.

Operationally, Merck's total employee headcount remained stable, with no significant changes reported. The company continues to focus on geographic expansion, particularly in emerging markets, while also navigating challenges posed by global pricing pressures and regulatory changes. The company anticipates that ongoing government initiatives aimed at controlling healthcare costs will continue to impact its sales and profitability in the near term.

Looking ahead, Merck expects to maintain its focus on innovation and strategic partnerships to drive growth. The company is also preparing for the anticipated impact of government price negotiations on its products, particularly those included in the Inflation Reduction Act. Despite these challenges, Merck remains committed to investing in its pipeline and operational improvements, with an outlook for continued growth in key therapeutic areas.