On February 4, Merck announced its fourth quarter financial report for 2024 and its full-year performance last year. Of the $64.2 billion in sales for the year, its PD-1 monoclonal antibody product pembrolizumab (trade name Keytruda, commonly known as "Keytruda") accounted for nearly half, with sales of $29.5 billion.

Merck also announced that it would suspend shipments of HPV vaccine products Gardasil/Gardasil 9 to the Chinese market from February this year, and this decision will last at least until the middle of this year. Merck China said that this decision was mainly affected by the overall market environment, weak consumer demand and high channel inventory; it also maintains full confidence in the potential of the Chinese market.

Suspending shipments to the Chinese market from this month
At the same time as announcing its financial report, Merck announced a highly anticipated decision, namely, from February this year, it will suspend shipments of its HPV vaccine products Gardasil/Gardasil 9 to the Chinese market. This decision will last at least until the middle of this year.

In 2024, Merck's HPV vaccine product Gardasil (GARDASIL/GARDASIL 9) sales revenue was US$8.6 billion, a year-on-year decrease of 3%. Gardasil also saw a 17% sales decline in the fourth quarter. Merck said that the decline was mainly due to the decline in demand in the Chinese market, which was partially offset by increased demand in other regions, especially Japan.

On February 5, Merck China told the Beijing News reporter that this decision was made after communicating with its local partner Zhifei Bio, mainly affected by the overall market environment, weak consumer demand and high channel inventory. The company decided to adjust the delivery rhythm of the Chinese market in stages according to the dynamic changes in consumer demand from February 2025, and it is expected to gradually return to normal in the middle of the year.

In January this year, the new indication of Merck's quadrivalent human papillomavirus vaccine was approved by the National Medical Products Administration for vaccination of males aged 9-26. The vaccine became the first and currently the only approved HPV vaccine for men in China. Merck said that this move will accelerate the process of optimizing inventory management, and China remains the core strategic market for the long-term growth of Gardasil. There is still a wide range of immunization needs among the female population of appropriate age and the population covered by the recently approved male indications. Merck remains fully confident in the potential of the Chinese market and its commitment to patients and consumers will not change.

The Chinese market is an important market for Merck's HPV vaccine. Robert M. Davis, chairman and CEO of Merck, said in 2024 that China accounts for 60% to 70% of Gardasil's international sales. The decline in sales of the vaccine in the domestic market has long been evident. Gardasil maintained a sales growth of 14% in the first quarter of last year, but only 1% in the second quarter, and was mostly driven by high pricing in the US market, but this growth was largely offset by the decline in sales in the Chinese market.

Last year's revenue increased by 7% year-on-year
According to the financial report, Merck's global sales in the fourth quarter of last year were US$15.6 billion, a year-on-year increase of 7%, and 9% year-on-year excluding the impact of foreign exchange. The company's annual sales were US$64.2 billion, a year-on-year increase of 7%; excluding the impact of foreign exchange, a year-on-year increase of 10%. Among them, Merck's drug sales revenue in 2024 was US$57.4 billion, a year-on-year increase of 7%. The growth in drug sales was mainly driven by sales growth in the oncology field, especially the increase in revenue of K drug and WELIREG (the world's first HIF-2α inhibitor bezutifan), as well as Reblozyl (erythrocyte maturation agent) and Lynparza (PARP inhibitor anticancer drug).

Among them, Merck's well-known product pembrolizumab (K drug) had sales of US$7.836 billion in the fourth quarter of last year. Its growth was mainly due to the continued strong demand for metastatic indications worldwide, including new bladder cancer and endometrial cancer indications, as well as early indications including triple-negative breast cancer and non-small cell lung cancer. In 2024, K drug achieved sales of US$29.5 billion with a year-on-year growth of 18%.

In 2023, with sales of $25 billion, Ketamine surpassed AbbVie's Humira and became the world's best-selling drug of the year. Ketamine was approved for marketing in the United States in September 2014. It is the world's best-selling PD-1 monoclonal antibody in recent years and the PD-1 monoclonal antibody with the most approved indications for tumor types. The core patent of Ketamine will expire in 2028. Some institutions predict that Ketamine's sales are expected to reach a milestone of $30 billion in 2028. With the entry of generic drugs by then, Ketamine's market will also be snatched up.

Another star drug, semaglutide, has a sales level on par with Ketamine. According to the financial report released by Novo Nordisk on February 5, semaglutide had sales of $29.296 billion last year, of which Ozempic (hypoglycemic injection version) had sales of $17.466 billion, Rybelsus (hypoglycemic oral version) had sales of $3.382 billion, and Wegovy (weight loss version) had sales of $8.448 billion.

In terms of R&D, Merck's R&D expenses in the fourth quarter of 2024 were US$4.6 billion, a year-on-year decrease of 52%, and the full-year R&D expenses in 2024 were US$17.9 billion, a year-on-year decrease of 41%. The decline was mainly due to the company's lower expenses for business development activities in the fourth quarter and the whole year, lower impairment of intangible assets and foreign exchange impact.

Merck expects its full-year sales in 2025 to be between US$64.1 billion and US$65.6 billion, including a negative foreign exchange impact of about 2% calculated at the exchange rate in mid-January 2025, which is lower than the average expectation of Wall Street analysts of US$67.4 billion.

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