(Reuters) -Merck & Co posted higher third-quarter revenue on Thursday, as growth from its blockbuster cancer drug Keytruda offset falling sales from human papillomavirus vaccine Gardasil in China.
However, shares fell 3% premarket after Merck narrowed its revenue guidance for the full year. It now expects revenue of $64.5 billion to $65.0 billion compared with its prior forecast of $64.3 billion to $65.3 billion.
J.P.Morgan analysts called the quarterly beat “modest”, adding the annual forecasts were “largely re-iterated”.
Shares of Merck have fallen about 5% so far in 2025, as investors weigh the company’s efforts to grow beyond Keytruda against broader industry headwinds, including potential U.S. drug pricing reforms.
Merck is working to add new drugs to its pipeline before Keytruda faces competition from cheaper biosimilars later this decade.
Sales of lung disease drug Winrevair, which was recently acquired in a $10 billion takeover of UK-based Verona Pharma, rose 141% to $360 million in the quarter.
However, Bernstein analyst Courtney Breen said the drug’s sales were materially below expectations, adding it is “not a good sign for a key growth driver for the company”.
The company posted revenue of $17.28 billion in the quarter, compared with analyst estimates of $16.96 billion, according to data compiled by LSEG.
On an adjusted basis, the company earned $2.58 per share, compared with estimates of $2.35 per share
Sales of Keytruda rose 10% to $8.1 billion in the quarter, in line with analysts’ estimates. Gardasil sales fell to $1.75 billion, ahead of the Wall Street forecast of $1.66 billion.
The company has not been making new shipments of the vaccine to China. It has said distributors there are working through their inventories after a fall in demand due to pressure on consumer spending in the country.
Merck said it expects full-year earnings of $8.93 to $8.98 a share, compared with its forecast of $8.87 to $8.97 previously.
(Reporting by Michael Erman and Christy Santhosh in Bengaluru; Editing by Stephen Coates and Krishna Chandra Eluri)
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