Shares in Merck – known outside North America as MSD – tumbled after the drugmaker said it was halting shipments of a top-selling vaccine to China to help a key local supplier reduce excess inventory, hurting sales forecasts for one of its blockbuster medicines.
In results published on Tuesday the pharmaceutical group forecast full-year sales of between $64.1 billion and $65.6 billion (€61.8bn-€63.2bn) in 2025, broadly flat compared with $64.1 billion of sales last year and less than consensus expectations of $67.3 billion.
MSD blamed the lower-than-expected forecast on the decision to pause shipments of its Gardasil vaccine to China until at least midyear. Gardasil is given to patients to prevent human papillomavirus (HPV), which is linked with cervical cancer. The pause on shipments “will facilitate a more rapid reduction of excess inventory and help support the financial position of its important and trusted partner”, MSD said in a statement.
It also projected earnings per share of between $8.88 and $9.03 for 2025, below Wall Street expectations of $9.19.
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The company stressed, however, that its action on Gardasil in China did not “in any way diminish the confidence Merck has in the business”. The vaccine is its second highest selling product behind cancer drug Keytruda.
Shares in Merck/MSD dropped more than 11 per cent in morning trading in New York, leaving it on track for its biggest fall since 2008, according to FactSet data.
Worries about its Gardasil business have hung over the stock since last summer when an unexpected drop in sales led to a sharp sell-off in its shares.
The sales growth in newly-launched hypertension drug Winrevair, which MSD acquired in 2021 in an $11.5 billion acquisition, was also more tepid than expected, generating just under $420 million last year.
Merck’s shares are down 30 per cent over the past year as the company has grappled with how to replace revenues from Keytruda, which generates $29.4 billion a year in sales and is set to lose exclusivity by the end of the decade.
Rival pharma group Pfizer also announced full-year earnings on Tuesday, reporting 2024 revenues of $63.6 billion and reaffirming its sales forecasts for 2025 of $61 billion to $64 billion.
Pfizer beat fourth-quarter expectations on strong sales of its Covid vaccine and pill as it seeks to fend off criticism from an activist investor that has argued the company squandered its pandemic gains and needs a new path forward.
Sales of the Covid vaccine and pill were around $550 million more than analysts had been expecting for the quarter.
The Covid gains helped make up for a worrisome miss from one of its new products, a vaccine for RSV that has been viewed as a driver of future growth. That shot, Abrysvo, brought in $198 million in the quarter, missing expectations by more than $300 million. Pfizer’s RSV vaccine has struggled to compete with one from GSK in a market that now also includes Moderna.
Pfizer’s shares were trading 1.35 per cent weaker by midday in New York.
The results from two of the biggest US drugmakers came in advance of a key US Senate committee vote to advance the Confirmation of vaccine sceptic Robert F Kennedy Jnr as US health secretary to a full vote of the Senate.
In a series of Senate hearings Kennedy has been grilled about his views. He has also been quizzed about his financial interest in a vaccine safety lawsuit targeting Gardasil, which he has since relinquished. – Copyright The Financial Times Limited 2025
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