Merck 2025 sales forecast underwhelms as it pauses Gardasil sales in China

[February 05, 2025]  By TOM MURPHY

Shares of Merck slid Tuesday after the drugmaker surprised Wall Street with a lower-than-expected 2025 sales forecast due partly to a pause in shipments of one of its top-selling products to China.

The drugmaker plans to temporarily pause shipments of its Gardasil vaccine to China at least through the middle of the year. Chairman and CEO Robert Davis told analysts the pause will help pare inventory and support the drugmaker's commercialization partner in China, which owns the inventory.

He said market dynamics in China that include a soft economy and weak consumer demand remain challenging. Gardasil sales have slumped there for a few quarters. Davis said they need to see inventory come down “meaningfully.”

The International Monetary Fund last month forecast that China's economy, the second-largest in the world, would decelerate from 4.8% last year, to 4.6% in 2025 and 4.5% in 2026. A collapse in the Chinese housing market has undermined consumer confidence.

Overall sales of Gardasil fell 17% to $1.55 billion in the final quarter of last year, mainly due to the lower demand in China.

Gardasil vaccine protects against cancer-causing human papilloma virus or HPV infections. The pause announcement comes a month after Merck received approval in China for use of the vaccine in males.

“We believe China still represents a significant, long-term opportunity for Gardasil, given the large number of females and now males with our recent approval that are not yet immunized,” Davis said.

A Merck scientist conducts research on Feb. 28, 2013, in West Point, Pa. (AP Photo/Matt Rourke, File)

Separately, company executives said they expect an immaterial impact to the company from proposed U.S. tariffs on goods made in China, Mexico or Canada. They said the company has low levels of manufacturing in those countries.

For 2025 Merck expects adjusted earnings to range between $8.88 and $9.03 per share on $64.1 billion to $65.6 billion in sales.

The data firm FactSet says analysts had been projecting earnings of $9.13 per share on $67.07 billion in sales for the Rahway, New Jersey, company.

For the recently completed fourth quarter, Merck booked an adjusted profit of $1.72 per share on $15.6 billion in revenue. Sales of top-selling cancer treatment Keytruda climbed 19% to $7.84 billion.

Analysts expected earnings of $1.61 per share on $15.48 billion in revenue.

Shares of Merck & Co. Inc. tumbled 10%, or $10.07, to $89.72 Tuesday while broader indexes climbed.

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