Financial projections for the year 2024

Merck

Merck (NYSE: MRK), known as MSD outside the United States and Canada, today announced financial results for the fourth quarter of 2024.
Selling, general and administrative (SG&A) expenses were $2.9 billion in the fourth quarter of 2024, an increase of 2% compared with the fourth quarter of 2023.
Research and development (R&D) expenses were $4.6 billion in the fourth quarter of 2024, a decrease of 52% compared with the fourth quarter of 2023.
Non-GAAP SG&A expenses were $2.8 billion in the fourth quarter of 2024, an increase of 2% compared with the fourth quarter of 2023.
Non-GAAP EPS was $1.72 for the fourth quarter of 2024 compared with $0.03 for the fourth quarter of 2023.

POSITIVE

The financial results for the fourth quarter of 2024 were released today by Merck (NYSE: MRK), which is referred to as MSD outside of the US and Canada.

Merck chairman and CEO Robert M. Davis stated, “We achieved robust growth in 2024, which reflected demand for our innovative portfolio, including for KEYTRUDA, which continues to benefit more cancer patients worldwide, the successful launch of WINREVAIR, and strong performance of our Animal Health business.”. In addition to advancing important clinical programs, we’re also expanding our pipeline through promising business development. Our talented global team’s dedication has kept our business in a strong position, and I have greater faith than ever in our ability to grow in the long run. “.”.

Financial Overview.

According to GAAP, EPS (earnings per share) assuming dilution was $1.48 for the fourth quarter and $6.74 for the entire 2024 fiscal year. For the fourth quarter of 2024, non-GAAP EPS was $1.72, and for the entire year, it was $7.65. The fourth quarter of 2024’s GAAP and non-GAAP EPS includes a charge of $0.23 per share for the execution of licensing agreements with LaNova Medicines Ltd. (Hansoh Pharma) and “LaNova.”. The fourth-quarter 2023 GAAP loss per share and non-GAAP EPS include a $1.69 per share charge associated with a partnership with Daiichi Sankyo. For the entire years 2024 and 2023, GAAP and non-GAAP EPS include charges of $1.28 and $6.21 per share, respectively, associated with specific partnerships, licenses, and asset purchases.

Costs associated with acquisitions and divestitures, restructuring program expenses, and gains and losses from equity securities investments are not included in non-GAAP EPS. Due to a decrease in reserves for unrecognized income tax benefits brought on by the statute of limitations for assessments pertaining to specific federal tax return years expiring, non-GAAP EPS for the fourth quarter and the entire year of 2024 also do not include a benefit. For 2023 as a whole, non-GAAP EPS does not include a charge for settlements with specific plaintiffs in the Zetia antitrust case.

Sales Performance in the Fourth Quarter.

The company’s top products and key performance indicators are shown in the following table along with sales figures.

Sales Performance for the Whole Year.

The company’s top products and key performance indicators are shown in the following table along with sales figures.

Pharmaceutical sales for the full year 2024 increased 7% to $57.4 billion. Pharmaceutical sales increased by 10% when foreign exchange’s negative effects were taken out of the equation. The Argentine peso’s devaluation contributed about 2 percentage points to the foreign exchange negative impact, which was mostly countered by price increases brought on by inflation, as is customary in that market. Increased sales in oncology, especially of KEYTRUDA and WELIREG, as well as higher alliance revenue from Reblozyl and Lynparza, were the main drivers of pharmaceutical sales growth. The successful launch of WINREVAIR and increased sales of specific hospital acute care products, especially PREVYMIS, as well as the cardiovascular franchise drove revenue growth in 2024. Reduced sales of JANUVIA and JANUMET, mainly due to lower pricing in the U.S., partially offset the growth in pharmaceutical sales in 2024. A. and generic competition in many foreign markets, decreased sales of the COVID-19 drug LAGEVRIO, GARDASIL/GARDASIL 9, SIMPONI, and REMICADE, which are all a result of Johnson and Johnson regaining the marketing rights in former Merck territories.

Animal Health’s full-year 2024 sales increased 4% to $5.9 billion. When the negative effects of foreign exchange were taken out of the equation, Animal Health sales increased by 8%. Consistent with market practice, the devaluation of the Argentine peso accounted for about 2 percentage points of the foreign exchange negative impact, which was mostly countered by price increases linked to inflation. Higher prices across the Companion Animal and Livestock product portfolios, increased demand for swine and poultry products, and sales associated with the acquisition of the Elanco aqua business were the main drivers of full-year sales growth. With BRAVECTO sales of $1.11 billion in 2024, the company grew by 6%, or 8%, if foreign exchange effects are taken out of the equation.

EPS, fourth-quarter and full-year expenses, and associated data.

A selection of the expense data is shown in the table below.

millions of dollars.

Gap.

acquisition.

And.

Divestment.

Relevant Expenses 3.

restructuring.

Price.

(Money).

Loss from.

money invested.

in equity.

Securities.

Not-.

GAAP-2.

Quarter Four of 2024.

price of sales.

3,828.

$701.

$121.

$-.

$3,006.

general, administrative, and selling.

2,864.

29.

16. .

(-).

2,819.

Development and research.

4,585.

11.

1.

(-).

4,574.

cost restructuring.

51.

-. .

51.

-. .

-.

net other expenses (income).

126.

(31).

(-).

152.

5.

Quarter Four of 2023.

sales expenses.

$3,911.

$454.

$117.

$-.

$3,340.

Selling, general, and administrative.

2,800.

24.

29.

-.

2,751. .

Development and research.

9,628…

990.

“-.”.

(-).

8.838.

restructuring expenses.

Number 255.

(-).

255.

(-).

-.

Net other (income) expense.

78.

35.

“-.”.

61.

170.

$ in billions.

Gap.

acquisition.

And.

Divestment.

Related Expenses 3.

restructuring.

prices.

(Given income).

Loss from.

Investments.

in equity.

Stocks.

some additional items.

No.

The GAAP2.

Dec. 31, 2024, was the year-end.

price of sales.

$15,190.

$3,409.

$495.

$-.

-$.

$12,289.

Administrative, general, and selling.

10,816.

117.

83.

“-.”.

(-).

10,616.

research and development.

17.938.

72.

1.

-. .

-.

17,865.

cost restructuring.

309.

(-).

309.

-. .

“-.”.

“-.”.

Net other income-related expenses.

24.

(79). .

-. .

Number 45.

“-.”.

10.

December 31, 2023, was the year’s end.

sales expense.

$15,126.

$2,018.

211.

$-.

$-.

$13,897.

general, administrative, and selling.

10,504.

86.

12.2.

“-.”.

(-).

10,296.

development and research.

30,531.

819.

1. .

“-.”.

-. .

29,711.

restructuring expenses.

599.

(-).

599.

-.

-. .

-.

Net other (income) expense.

466.

( 47).

(-).

279.

553.

29.

EPS, GAAP expense, and associated data.

For the fourth quarter of 2024, the gross margin was 75.5%, while for the same period in 2023, it was 73.3%. Higher manufacturing-related expenses, such as inventory write-offs, and higher amortization of intangible assets partially offset the increase, which was mostly caused by the positive effects of the product mix (including lower royalty rates related to KEYTRUDA and GARDASIL/GARDASIL 9) and foreign exchange. For the entire 2024 fiscal year, the gross margin was 76.3%, while for the entire 2023 fiscal year, it was 73.2%. This increase was partly offset by higher intangible asset amortization, higher restructuring costs (mainly reflecting asset impairment charges), and higher manufacturing-related costs (including inventory write-offs). The positive effects of the product mix (including lower royalty rates related to KEYTRUDA and GARDASIL/GARDASIL 9) and foreign exchange were the main causes of the increase.

Comparing the fourth quarter of 2024 to the fourth quarter of 2023, selling, general, and administrative (SG&A) expenses increased by 2% to $2.09 billion. The favorable effect of foreign exchange and lower restructuring costs partially offset the increase, which was mostly caused by higher selling and promotional costs. SG&A expenditures for the entire year 2024 were $10.08 billion, up 3% from the same period in 2023. Higher selling, acquisition, promotional, and administrative expenses were the main causes of the increase, which was somewhat offset by lower restructuring expenses and the positive effects of foreign exchange.

In comparison to the fourth quarter of 2023, research and development (R&D) expenditures decreased by 52% to $4.16 billion in the fourth quarter of 2024. In comparison to the full year of 2023, R&D expenditures decreased by 41% to $17.9 billion in 2024. Lower charges for business development activity, lower intangible asset impairment charges, and the positive effect of foreign exchange were the main causes of the declines in 2024’s fourth quarter and full year. These were somewhat offset by higher spending on clinical development and higher costs for compensation and benefits.

Compared to $78 million in the fourth quarter of 2023, other (income) expenses, net, totaled $126 million in the fourth quarter of 2024. The unfavorability was mostly caused by net losses from equity securities investments as opposed to net income from equity securities investments in the previous quarter, which were somewhat offset by lower net interest expense and foreign exchange losses. A $572 million charge in 2023 for settlements with some plaintiffs in the Zetia antitrust case was the main reason for the $24 million in other (income) expense, net, in the full year of 2024 as opposed to the $466 million in expenses in the full year of 2023. Favorability was also a result of lower foreign exchange losses in 2024 and $170 million in revenue from the extension of an existing development and commercialization agreement with Daiichi Sankyo. Compared to 2023, lower net income from equity securities investments and higher net interest expense negatively impacted other (income) expense, net, for the entire year 2024.

For the fourth quarter and full year of 2024, the effective tax rates of 10 percent and 14 percent, respectively, include a favorable impact of 6 percentage points and 2 percentage points, respectively, because of a decrease in reserves for unrecognized income tax benefits brought on by the statute of limitations for assessments pertaining to specific federal tax return years.

Operating strength in the business, lower charges for business development transactions, lower intangible asset impairment charges, and a benefit from the statute of limitations expiring for assessments related to the 2020 federal tax return year were the main drivers of the GAAP EPS of $1.48 for the fourth quarter of 2024 compared to a loss per share of $0.48 for the fourth quarter of 2023. The full-year GAAP EPS for 2024 was $6.74, while the full-year 2023 EPS was $0.14. A charge in the previous year for settlements with some plaintiffs in the Zetia antitrust lawsuit, operational strength in the company, lower intangible asset impairment charges, a benefit from the statute of limitations expiring for the 2020 and 2019 federal tax return years, and lower charges for business development transactions were the main drivers of the increase, which was partially offset by the negative impact of foreign exchange.

Related Information, EPS, and Non-GAAP Expense.

The non-GAAP gross margin for the fourth quarter of 2024 was 80.8%, while the same period in 2023 saw a non-GAAP gross margin of 77.2%. In 2024, the non-GAAP gross margin was 80.8%, while in 2023, it was 76.9%. The positive effects of the product mix (including lower royalty rates for KEYTRUDA and GARDASIL/GARDASIL 9) and foreign exchange were the main drivers of the non-GAAP gross margin improvements in the fourth quarter and the entire year of 2024. These gains were partially offset by higher manufacturing-related costs (such as inventory write-offs).

In comparison to the fourth quarter of 2023, non-GAAP SG&A expenses increased by 2% to $2.08 billion in the fourth quarter of 2024. Compared to the full year of 2023, non-GAAP SG&A expenses increased by 3% to $10.6% in 2024. The favorable effect of foreign exchange helped to partially offset the increases, which were mostly caused by higher selling and promotional expenses as well as higher administrative costs for the entire year.

Non-GAAP R&D costs decreased by 48% from the fourth quarter of 2023 to $4.06 billion in the fourth quarter of 2024. For the entire year of 2024, non-GAAP R&D expenses came to $17.9 billion, a 40 percent decrease from the full year of 2023. Reduced fees for business development activities and the positive effect of foreign exchange were the main causes of the declines in 2024’s fourth quarter and full year. These were somewhat counterbalanced by higher spending on clinical development and higher costs associated with benefits and compensation.

In comparison to the $174 million in the fourth quarter of 2023, the net non-GAAP other (income) expense for the fourth quarter of 2024 was $5 million. The main causes of the favorability were decreased net interest expense and foreign exchange losses. In 2024, non-GAAP other (income) expenses, net, totaled $10 million, while in 2023, they totaled $219 million. Lower foreign exchange losses in 2024, which were somewhat offset by higher net interest expense, and $170 million in revenue from the extension of an existing development and commercialization agreement with Daiichi Sankyo were the main drivers of favorability.

For the fourth quarter and the entire year of 2024, the non-GAAP effective tax rate was 16.2% and 16.8%, respectively.

Compared to $0.03 for the fourth quarter of 2023, non-GAAP EPS for the fourth quarter of 2024 was $1.72. The full-year 2024 non-GAAP EPS was $7.65, while the full-year 2023 EPS was $1.051. Lower fees for business development transactions and the company’s operational strength were the main drivers of the increase in both periods. Over the course of the year, the increase was somewhat offset by the negative impact of foreign exchange.

The following table shows a reconciliation of net income (loss) and earnings (loss) per share between GAAP and non-GAAP.

Highlights of the pipeline and portfolio.

Throughout the fourth quarter, Merck achieved major clinical and regulatory milestones and made significant progress in its wide and varied pipeline.

In the field of oncology, Merck reported favorable topline findings from the pivotal Phase 3 MK-3475A-D77 trial, which assessed the noninferiority of intravenous (IV) KEYTRUDA given with chemotherapy versus subcutaneous pembrolizumab and berahyaluronidase alfa when used as a first-line treatment for adult patients with metastatic non-small cell lung cancer. Compared to IV administration, subcutaneous pembrolizumab and berahyaluronidase alfa may enhance patient satisfaction and facilitate access for both patients and healthcare professionals.

During the American Society of Hematology Annual Meeting and Exposition in December 2024, Merck presented new data on a variety of hematologic malignancies. Among these was encouraging Phase 2 data for its experimental antibody-drug conjugate zilovertamab vedotin, which is intended to treat patients with diffuse large B-cell lymphoma who had not yet received treatment. Merck’s continuous advancement in clinical research for its growing and diverse hematology pipeline was demonstrated by the data, which included more than 20 abstracts.

In the United States, Merck also accomplished a number of significant regulatory milestones. A. Japan, China, and Europe. A few highlights are the U. S. Food and Drug Administration (FDA) granting Breakthrough Therapy designation to sacituzumab tirumotecan (sac-TMT) for the treatment of certain patients with previously treated advanced or metastatic nonsquamous NSCLC with epidermal growth factor receptor (EGFR) mutations. Merck also got new approvals for WELIREG and Lynparza in China, as well as for KEYTRUDA-based regimens in China and Japan.

In vaccines and infectious diseases, the FDA accepted the Biologics License Application (BLA) for clesrovimab, an investigational prophylactic long-acting monoclonal antibody designed to protect infants from respiratory syncytial virus (RSV) disease during their first RSV season and set a Prescription Drug User Fee Act (PDUFA) date of June 10, 2025. This regulatory milestone represents a significant step toward the availability of clesrovimab for the 2025–2026 RSV season. The filing was predicated on findings from the pivotal Phase 2b/3 study of clesrovimab in infants for RSV prevention, which was presented during ID Week 2024. In addition, Merck announced topline results from two pivotal Phase 3 trials of the investigational, once-daily, oral, two-drug, single-tablet regimen of doravirine/islatravir (DOR/ISL) in adults with virologically suppressed HIV-1 infection, in line with Merck’s commitment to help address the needs of people living with HIV.

Additionally, Merck was granted expanded approval for GARDASIL in China in January 2025. For the prevention of specific HPV-related cancers and illnesses in males aged 9 to 26, it is currently the first HPV vaccine authorized in China. Furthermore, the Committee for Medicinal Products for Human Use (CHMP) of the European Union (EU) suggested that CAPVAXIVE be approved for adult pneumococcal vaccination; an EU approval decision is anticipated in the second quarter of 2025.

Merck reported positive topline results from the Phase 3 ZENITH study, which evaluated WINREVAIR in adults with pulmonary arterial hypertension (PAH) who were classified as having a high risk of death by the World Health Organization (WHO) Group 1 functional class (FC) III or IV. An independent data monitoring committee suggested that the study be terminated early due to overwhelming efficacy, based on the positive findings of an interim analysis. Merck also announced in January 2025 that the Phase 3 HYPERION study, which was evaluating WINREVAIR in newly diagnosed adults with PAH with FC II or III at intermediate or high risk of disease progression, was terminated early due to the positive results of the ZENITH trial’s interim analysis and a review of all the data collected thus far from the WINREVAIR clinical program. Every participant in the ZENITH and HYPERION studies will have the chance to get WINREVAIR as part of the long-term, open-label extension study called SOTERIA.

Merck persisted in carrying out its plan for business development. The business revealed that MK-2010, a novel investigational PD-1/VEGF bispecific antibody from LaNova, had closed an exclusive worldwide license. Additionally, Merck and Hansoh signed an exclusive worldwide licensing agreement for the evaluation of MK-4082, an oral small molecule experimental preclinical glucagon-like peptide (GLP-1) receptor agonist.

Merck’s pipeline and portfolio are highlighted in the following table of noteworthy recent news releases.

Complete Financial Outlook for 2025.

The company’s financial outlook for the entire year is summed up in the following table.

Merck has not provided a reconciliation of forward-looking non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other (income) expense, net, non-GAAP effective tax rate and non-GAAP EPS to the most directly comparable GAAP measures, given it cannot predict with reasonable certainty the amounts necessary for such a reconciliation, including intangible asset impairment charges, legal settlements, and income and losses from investments in equity securities either owned directly or through ownership interests in investment funds, without unreasonable effort. Future GAAP results for the company may be significantly impacted by these factors, which are by nature hard to predict.

With a negative foreign exchange impact of about 2 percent at mid-January 2025 exchange rates, Merck projects full-year 2025 sales to be between $64 million and $65 billion. This sales range represents the decision to temporarily stop GARDASIL/GARDASIL 9 shipments into China starting in February 2025 and continuing through at least the middle of the year.

The anticipated range of Merck’s full-year non-GAAP effective income tax rate is 16–17%.

With a negative foreign exchange impact of about $0.35 per share, Merck projects non-GAAP EPS for the entire year 2025 to be between $8.88 and $9.03. A $300 million one-time charge, or roughly $0.09 per share, is included in this range for a milestone payment to LaNova that will be recorded after the technology transfer for MK-2010 is finished. A net charge of $1.28 per share associated with specific asset acquisitions, licensing agreements, and partnerships had a negative impact on non-GAAP EPS of $7.65 in 2024.

The financial outlook makes no assumptions about any further significant potential business development transactions, as has been the case in the past.

Call for the earnings conference.

On Tuesday, February, a live audio webcast of the earnings conference call will be available to investors, media, and the public. 4, at 9 a.m. A. ET through this website. Additionally, the sales and earnings news release, supplemental financial disclosures, slides showcasing the results, and a replay of the webcast will be accessible at www.merck.com.

To join the call, all participants need to dial (800) 369-3351 (U.S. A. and Canada Toll-Free) or the access code 9818590 at (517) 308-9448.

About Merck.

At Merck, known as MSD outside of the United States and Canada, we are unified around our purpose: We use the power of leading-edge science to save and improve lives around the world. Through the creation of significant medications and vaccines, we have given humanity hope for over 130 years. We aspire to be the premier research-intensive biopharmaceutical company in the world – and today, we are at the forefront of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. To ensure a safe, sustainable, and healthy future for all individuals and communities, we cultivate a diverse and inclusive global workforce and conduct business responsibly every day. Visit www.merck.com to learn more, and follow us on X (formerly Twitter), Facebook, Instagram, YouTube, and LinkedIn.

A statement about Merck & Co.’s future. , INC. , Rahway, N. J. in the United States.

This news release of Merck & Co. , Inc. , Rahway, N. J. , USA (the “company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U. S. Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to pipeline candidates that the candidates will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.

Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.

The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2023 and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www . sec . gov).

Appendix.

Generic product names are provided below.

medicine.

BRIDION (Sugammadex).

Pneumococcal 21-valent Conjugate Vaccine, or CAPVAXIVE.

GARDASIL is a recombinant vaccine that protects against human papillomavirus quadrivalent (types 6, 11, 16, and 18).

The recombinant human papillomavirus 9-valent vaccine is known as GARDASIL 9.

(sitagliptin and metformin HCl) JANUMET.

(sitagliptin) JANUVIA.

[KEYTRUDA] (pembrolizumab).

LAGEVRIO (molnupiravir).

Lenvima (lenvatinib).

Olaparib (Lynparza).

The live measles, mumps, and rubella virus vaccine is known as M-M-R II.

PREVYMIS ( letermovir ).

PROQUAD (Measles, Mumps, Rubella and Varicella Virus Vaccine Live).

Reblozyl (luspatercept).

REMICADE (infliximab).

ROTATEQ (Rotavirus Vaccine, Live, Oral, Pentavalent).

SIMPONI (golimumab).

VARIVAX (Varicella Virus Vaccine Live).

VAXNEUVANCE ( Pneumococcal 15-valent Conjugate Vaccine ).

WELIREG ( belzutifan ).

WINREVAIR (sotatercept-csrk).

Animal Health.

BRAVECTO (fluralaner).

MERCK & CO. , Inc. GAAP (AMOUNTS IN MILLIONS, EXCEPT FOR PER SHARE FIGURES)(UNAUDITED) Table 1GAAP percent ChangeGAAP percent Change is the combined statement of operations.

Q24.

Q23.

Full Year 2023 Sales Full Year 2024.

The $.

15,624.

The $.

14.630.

seven percent.

The $.

65,168.

$.

$60,115.

7 percent.

Expenses, costs, and additional sales expenses.

4,828.

3,911.

-2 percent.

15,193.

16,126.

-6 percent.

general, administrative, and selling.

2,864. .

2,804.

2 percent.

10, 816.

10,504.

three percent.

Research and development.

4,585.

9,628…

-52 percent.

17,938.

30,531.

41 percent.

restructuring expenses.

50.

255.

-80 percent.

309.

599.

-48 percent.

Other (income) expense, net.

126.

78.

62 percent.

(24.

).

466.

*.

Income (Loss) Before Taxes.

4,170.

(2,046.

).

*.

19,936.

1,889.

*.

Income Tax Provision (Benefit).

425.

(821.

).

2,803.

1,512.

Net Income (Loss).

3,745.

(1,225.

).

*.

17,133.

377.

*.

Less: Net Income Attributable to Noncontrolling Interests.

2.

1.

16.

12.

Net Income (Loss) Attributable to Merck & Co. , Inc.

$.

3,743.

$.

(1,226.

).

*.

$.

17,117.

$.

365.

*.

Earnings (Loss) per Common Share Assuming Dilution(1).

$.

1.48.

$.

(0.48.

).

*.

$.

6.74.

$.

0.14.

*.

Average Shares Outstanding Assuming Dilution(1).

2,537.

2,533.

2,541.

2,547.

Tax Rate.

10.2.

percent.

40.1.

percent.

14.1.

percent.

80.0.

percent.

* 100 percent or greater(1)Because the company recorded a net loss in the fourth quarter of 2023, no potential dilutive common shares were used in the computation of loss per common share assuming dilution as the effect would have been anti-dilutive.

MERCK & CO. , INC. FOURTH QUARTER AND FULL YEAR 2024 GAAP TO NON-GAAP RECONCILIATION(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)(UNAUDITED)Table 2aGAAP Acquisition and Divestiture.

Related Costs(1) Restructuring Costs(2) (Income) Loss from.

Investments in Equity.

Securities Certain Other ItemsAdjustment SubtotalNon-GAAPFourth QuarterCost of sales.

$ 3,828.

701.

121.

822.

$ 3,006.

Selling, general and administrative.

2,864.

29.

16.

45.

2,819.

Research and development.

4,585.

12.

(1).

11.

4,574.

Restructuring costs.

51.

51.

51.

–.

Other (income) expense, net.

126.

(31).

152.

121.

5.

Income Before Taxes.

4,170.

(711).

(187).

(152).

(1,050).

5,220.

Income Tax Provision (Benefit).

425.

(111).

(3).

(17).

(3).

(33).

(3).

(260).

(4).

(421).

846.

Net Income.

3,745.

(600).

(170).

(119).

260.

(629).

4,374.

Net Income Attributable to Merck & Co. , Inc.

3,743.

(600).

(170).

(119).

260.

(629).

4,372.

Earnings per Common Share Assuming Dilution.

$ 1.48.

(0.23).

(0.07).

(0.04).

0.10.

(0.24).

$ 1.72.

Tax Rate.

10.2 percent.

16.2 percent.

Full YearCost of sales.

$ 15,193.

2,409.

495.

2,904.

$ 12,289.

Selling, general and administrative.

10,816.

117.

83.

200.

10,616.

Research and development.

17,938.

72.

1.

73.

17,865.

Restructuring costs.

309.

309.

309.

–.

Other (income) expense, net.

(24).

(79).

45.

(34).

10.

Income Before Taxes.

19,936.

(2,519).

(888).

(45).

(3,452).

23,388.

Income Tax Provision (Benefit).

2,803.

(461).

(3).

(135).

(3).

(10).

(3).

(519).

(4).

(1,125).

3,928.

Net Income.

17,133.

(2,058).

(753).

(35).

519.

(2,327).

19,460.

Net Income Attributable to Merck & Co. , Inc.

17,117.

(2,058).

(753).

(35).

519.

(2,327).

19,444.

Earnings per Common Share Assuming Dilution.

$ 6.74.

(0.81).

(0.30).

(0.01).

0.21.

(0.91).

$ 7.65.

Tax Rate.

14.1 percent.

16.8 percent.

Only the line items that are affected by non-GAAP adjustments are shown. Merck is providing certain non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. Management believes that providing non-GAAP information enhances investors’ understanding of the company’s results because management uses non-GAAP measures to assess performance. Management uses non-GAAP measures internally for planning and forecasting purposes and to measure the performance of the company along with other metrics. In addition, annual employee compensation, including senior management’s compensation, is derived in part using a non-GAAP pretax income metric. The non-GAAP information presented should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. (1) Amounts included in cost of sales primarily reflect expenses for the amortization of intangible assets. Amounts included in selling, general and administrative expenses reflect integration, transaction and certain other costs related to acquisitions and divestitures. Amounts included in research and development expenses primarily reflect the amortization of intangible assets. Additionally, research and development expenses for the full year includes Animal Health intangible asset impairment charges. Amounts included in other (income) expense, net, primarily reflect royalty income and a decrease in the estimated fair value measurement of liabilities for contingent consideration related to the prior termination of the Sanofi-Pasteur MSD joint venture. (2) Amounts primarily include employee separation costs, accelerated depreciation and asset impairments associated with facilities to be closed or divested related to activities under the company’s formal restructuring programs. (3)Represents the estimated tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments. (4)Represents benefits recorded in the fourth quarter and full year due to reductions in reserves for unrecognized income tax benefits resulting from the expiration of the statute of limitations for assessments related to federal income tax return years. The benefit recognized in the fourth quarter relates to the 2020 federal tax return year and the benefit recognized for the full year relates to both the 2020 and 2019 federal tax return years.

MERCK & CO. , INC. FRANCHISE / KEY PRODUCT SALES(AMOUNTS IN MILLIONS)(UNAUDITED)Table 3.

2024.

2023.

4Q.

Full Year.

1Q2Q3Q4QFull Year1Q2Q3Q4QFull YearNom percentEx-Exch percentNom percentEx-Exch percent TOTAL SALES(1).

$15,775.

$16,112.

$16,657.

$15,624.

$64,168.

$14,487.

$15,035.

$15,962.

$14,630.

$60,115.

7.

9.

7.

10.

PHARMACEUTICAL.

14,006.

14,408.

14,943.

14,042.

57,400.

12,721.

13,457.

14,263.

13,141.

53,583.

7.

8.

7.

10.

OncologyKeytruda.

6,947.

7,270.

7,429.

7,836.

29,482.

5,795.

6,271.

6,338.

6,608.

25,011.

19.

21.

18.

22.

Alliance Revenue – Lynparza (2).

292.

317.

337.

365.

1,311.

275.

310.

299.

315.

1,199.

16.

18.

9.

11.

Alliance Revenue – Lenvima(2).

255.

249.

251.

255.

1,010.

232.

242.

260.

226.

960.

13.

14.

5.

6.

Welireg.

85.

126.

139.

160.

509.

42.

50.

54.

72.

218.

122.

123.

133.

133.

Alliance Revenue – Reblozyl(3).

71.

90.

100.

110.

371.

43.

47.

52.

70.

212.

58.

58.

75.

75.

Vaccines(4) Gardasil/Gardasil 9.

2,249.

2,478.

2,306.

1,550.

8,583.

1,972.

2,458.

2,585.

1,871.

8,886.

-17.

-18.

-3.

-2.

ProQuad/M-M-R II/Varivax.

570.

617.

703.

594.

2,485.

528.

582.

713.

545.

2,368.

9.

9.

5.

5.

Vaxneuvance.

219.

189.

239.

161.

808.

106.

168.

214.

176.

665.

-9.

-9.

22.

23.

RotaTeq.

216.

163.

193.

139.

711.

297.

131.

156.

185.

769.

-25.

-25.

-8.

-7.

Pneumovax 23.

61.

59.

68.

74.

263.

96.

92.

140.

85.

412.

-12.

-12.

-36.

-34.

Hospital Acute CareBridion.

440.

455.

420.

449.

1,764.

487.

502.

424.

429.

1,842.

5.

5.

-4.

-3.

Prevymis.

174.

188.

208.

215.

785.

129.

143.

157.

175.

605.

23.

23.

30.

33.

Dificid.

73.

92.

96.

79.

340.

65.

76.

74.

87.

302.

-9.

-9.

13.

13.

Zerbaxa.

56.

62.

64.

70.

252.

50.

54.

53.

61.

218.

14.

16.

16.

18.

Noxafil.

56.

45.

41.

36.

177.

60.

55.

51.

46.

213.

-23.

-17.

-17.

-8.

CardiovascularWinrevair.

70.

149.

200.

419.

-.

-.

-.

-.

Alliance Revenue – Adempas/Verquvo(5).

98.

106.

102.

109.

415.

99.

68.

92.

108.

367.

1.

1.

13.

13.

Adempas(6).

70.

72.

72.

73.

287.

59.

65.

65.

66.

255.

11.

9.

12.

14.

VirologyLagevrio.

350.

110.

383.

121.

964.

392.

203.

640.

193.

1,428.

-37.

-37.

-33.

-28.

Isentress/Isentress HD.

111.

89.

102.

92.

394.

123.

136.

119.

105.

483.

-13.

-7.

-18.

-14.

Delstrigo.

56.

60.

65.

69.

249.

44.

50.

54.

54.

201.

28.

29.

24.

26.

Pifeltro.

42.

39.

42.

40.

163.

34.

38.

37.

33.

142.

20.

20.

15.

15.

NeuroscienceBelsomra.

46.

53.

78.

45.

222.

56.

63.

58.

54.

231.

-17.

-17.

-4.

1.

ImmunologySimponi.

184.

172.

189.

543.

180.

180.

179.

171.

710.

N/M.

N/M.

-24.

-23.

Remicade.

39.

35.

41.

114.

51.

48.

45.

43.

187.

N/M.

N/M.

-39.

-36.

Diabetes (7) Januvia.

419.

405.

278.

232.

1,334.

551.

511.

581.

547.

2,189.

-58.

-56.

-39.

-36.

Janumet.

251.

224.

204.

255.

935.

329.

354.

255.

240.

1,177.

7.

11.

-21.

-16.

Other Pharmaceutical(8).

576.

573.

644.

713.

2,510.

626.

560.

568.

576.

2,333.

25.

25.

8.

10.

ANIMAL HEALTH.

1,511.

1,482.

1,487.

1,397.

5,877.

1,491.

1,456.

1,400.

1,278.

5,625.

9.

13.

4.

8.

Livestock.

850.

837.

886.

889.

3,462.

849.

807.

874.

808.

3,337.

10.

14.

4.

9.

Companion Animal.

661.

645.

601.

508.

2,415.

642.

649.

526.

470.

2,288.

8.

10.

6.

7.

Other Revenues(9).

258.

222.

227.

185.

891.

275.

122.

299.

211.

907.

-13.

3.

-2.

4.

N/M – Not MeaningfulSum of quarterly amounts may not equal year-to-date amounts due to rounding. (1)Only select products are shown. (2)Alliance Revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs. (3)Alliance Revenue represents royalties. (4)Total Vaccines sales were $3,424 million, $3,656 million, $3,675 million and $2,693 million in the first, second, third and fourth quarter of 2024, respectively, and $3,133 million, $3,557 million, $4,002 million and $2,962 million in the first, second, third and fourth quarter of 2023, respectively. (5)Alliance Revenue represents Merck’s share of profits from sales in Bayer’s marketing territories, which are product sales net of cost of sales and commercialization costs. (6)Net product sales in Merck’s marketing territories. (7)Total Diabetes sales were $745 million, $715 million, $592 million and $546 million in the first, second, third and fourth quarter of 2024, respectively, and $950 million, $951 million, $924 million and $876 million in the first, second, third and fourth quarter of 2023, respectively. (8)Includes Pharmaceutical products not individually shown above. (9)Other Revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities. Other Revenues related to the receipt of upfront and milestone payments for out-licensed products were $61 million, $15 million, $15 million and $15 million in the first, second, third and fourth quarter of 2024, respectively, and $51 million, $3 million and $65 million in the first, second and third quarter of 2023, respectively.

Source: Merck & Co. , Inc.

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