NEW YORK – Merck in a call with investors to discuss its fourth quarter and full-year 2024 financial results highlighted efforts to diversify its pipeline as it faces patent expirations later this decade of its blockbuster immune checkpoint inhibitor Keytruda (pembrolizumab).
Keytruda remains Merck's top-selling product and still comprises a significant portion of the company's overall revenue, bringing in $7.84 billion in sales in Q4 2024, up 19 percent from $6.61 billion in the year-ago quarter. Over the whole year, Keytruda contributed $29.48 billion in sales, an 18 percent increase from $25.01 billion in 2023.
Rahway, New Jersey-based Merck attributed Keytruda's quarterly growth to increased global demand in metastatic indications, including in bladder and endometrial cancers, as well as to its uptake in earlier-stage cancers, including in non-small cell lung cancer and in high-risk, early-stage triple-negative breast cancer. In the US, the company noted increased uptake of Keytruda in locally advanced or metastatic urothelial cancer and in primary advanced or recurrent endometrial cancer.
Merck executives remain confident they can navigate Keytruda's loss-of-exclusivity period, starting in 2028. Merck CEO Rob Davis said during the call that this belief "is based on the strength of our pipeline, the excitement we have for our ongoing and upcoming launches of innovative new products, and the commercial opportunity they represent."
He pointed to the company's efforts to diversify its pipeline and highlighted recent findings from a study evaluating a subcutaneous formulation of Keytruda.
For the three months ending Dec. 31, Merck brought in $15.62 billion in sales, up 7 percent from $14.63 billion in Q4 2023, beating analysts' average estimate of $15.51 billion. The company's pharmaceutical segment notched $14.04 billion in sales in Q4 2024, up 7 percent from $13.14 billion in Q4 2023. Keytruda sales during the quarter comprised nearly 56 percent of total pharmaceutical sales.
In November, the company reported results from the Phase III MK-3475A-D77 trial, which found that a subcutaneous formulation of Keytruda combined with Alteogen's berahyaluronidase alfa, a hyaluronidase variant, and chemotherapy was non-inferior to intravenously delivered Keytruda with chemo in metastatic non-small cell lung cancer patients. This formulation could both improve patients' access to the drug and their experience, as compared to IV administration, the company said.
Davis noted that additional data readouts and regulatory filings on the subcutaneous formulation are expected this year and that the subcutaneous version could potentially launch in 2025. At the JP Morgan Healthcare Conference in January, the company said it would offer subcutaneous Keytruda at a "competitive price point."
Bristol Myers Squibb in December received US Food and Drug Administration approval for a subcutaneous formulation of the competing immunotherapy Opdivo, sold under the brand name Opdivo Qvantig (nivolumab and hyaluronidase).
Merck has additionally expanded its pipeline through acquisitions, partnerships, and licensing. It acquired Harpoon Therapeutics in early 2024, adding the T-cell engager targeting DLL3 drug, MK-6070, to its pipeline and partnered with Daiichi Sankyo in August to develop MK-6070 in addition to three antibody-drug conjugates (ADCs) they had already partnered on.
And in November, Merck added a novel investigational PD-1/VEGF bispecific antibody, now dubbed MK-2010, to its pipeline that it licensed from LaNova. Dean Li, president of Merck Research Laboratories, said during the call that Merck plans to explore the potential of MK-2010 across multiple tumor types in a global population.
Merck's revenue from the PARP inhibitor Lynparza (olaparib), which it comarkets with AstraZeneca, was $365 million in Q4 2024, a 16 percent increase from $315 million in Q4 2023.
The company also noted that it anticipates a negative impact from the redesign of Medicare Part D in the US, particularly on the pulmonary arterial hypertension drug Winrevair (sotatercept) but also on its portfolio of small molecule oncology products, including Lynparza, Lenvima (lenvatinib), and Welireg (belzutifan).
In Q4 2024, Merck had a net income of $3.74 billion, or $1.48 per share, versus a net loss of $1.23 billion, or $.48 per share, in Q4 2023. Non-GAAP EPS for the quarter was $1.72, beating analysts' average estimate of $1.68.
Full-year financials
In 2024, Merck brought in $64.17 billion in total sales, up 7 percent from $60.12 billion in 2023 and inching over analysts' expectations of $64.01 billion in revenue for the full year.
This growth was, according to Merck CFO Caroline Litchfield, driven by oncology product sales, as well as animal health and new product launches. Merck's pharmaceutical segment brought in $57.4 billion in 2024, up 7 percent from $53.58 billion in 2023. Keytruda sales comprised 51 percent of total pharmaceutical revenue.
Lynparza sales in 2024, meanwhile, were $1.31 billion, a 9 percent increase from $1.20 billion in 2023.
For the full year, Merck's net income was $17.12 billion, or $6.74 per share, versus $365 million, or $.14 per share in 2023. Non-GAAP EPS was $7.65, coming above analysts' average estimate of $7.62.
In 2025, Merck is expecting revenues to range between $64.1 billion and $65.6 billion and non-GAAP EPS between $8.88 and $9.03.