Merck’s Q3 Revenue Climbs on Keytruda Immunotherapy

October 30, 2025 – Merck & Co. (NYSE: MRK) reported higher third-quarter revenue, powered by continued growth from its blockbuster cancer immunotherapy Keytruda, which offset declining sales of the human papillomavirus (HPV) vaccine Gardasil, particularly in China.

The company posted $17.28 billion in revenue, surpassing analyst expectations of $16.96 billion, while adjusted earnings per share came in at $2.58, beating estimates by 23 cents.

Despite the strong quarterly performance, shares fell nearly 2% after Merck slightly lowered the high end of its full-year revenue forecast, projecting $64.5 billion to $65.0 billion, down from the prior estimate of $64.3 billion to $65.3 billion.

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Keytruda Continues to Drive Growth

Keytruda remains Merck’s leading growth engine, with sales rising 10% to $8.1 billion in the quarter. CFO Caroline Litchfield noted, “We expect continued growth in Keytruda, although at a slightly slower pace as we reach peak penetration in some indications, and with some headwinds from pricing in ex-U.S. markets.”

Investors are closely monitoring Merck’s efforts to diversify its pipeline, as Keytruda may face competition from cheaper biosimilars later this decade.

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Gardasil Sales Decline in China and Japan

Sales of Gardasil, Merck’s HPV vaccine, fell to $1.75 billion, though slightly above Wall Street’s forecast of $1.66 billion. The decline is mainly due to:

• China: No new shipments; distributors are working through existing inventories amid falling consumer demand.
• Japan: A 3% drop following the conclusion of the catch-up vaccination reimbursement program.

Merck continues to adapt its strategy in these regions while maintaining Gardasil’s long-term growth potential.

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Pipeline Expansion: Winrevair and Ohtuvayre

Merck is also investing in new therapeutic areas. Key developments include:

• Winrevair: Lung disease treatment acquired from Acceleron Pharma in 2021. Sales rose 141% to $360 million, though Bernstein analyst Courtney Breen noted the performance is below expectations, signaling potential challenges for future growth.
• Ohtuvayre: A recently acquired lung disease drug from UK-based Verona Pharma in a $10 billion takeover, strengthening Merck’s respiratory portfolio.

These investments are central to Merck’s strategy of diversifying revenue streams beyond Keytruda.

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Full-Year Guidance and Market Outlook

Merck expects full-year earnings of $8.93 to $8.98 per share, slightly higher than prior guidance of $8.87 to $8.97. Analysts describe the quarterly beat as “modest,” noting that the company faces industry headwinds, including potential U.S. drug pricing reforms and slowing growth in international vaccine markets.

Shares have fallen roughly 5% year-to-date in 2025, reflecting investor caution about broader pharmaceutical sector challenges and the need for pipeline-driven growth.

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Conclusion: Balancing Blockbuster Growth and Pipeline Expansion

Merck’s Q3 results highlight the continued dominance of Keytruda in its portfolio, while the decline in Gardasil underscores challenges in global vaccine markets. Strategic acquisitions like Winrevair and Ohtuvayre demonstrate Merck’s commitment to long-term growth and diversification, positioning the company for continued resilience in a rapidly evolving pharmaceutical landscape.