Reports Strength in Oncology and Animal Health, Plus Increasing Contributions From WINREVAIR and CAPVAXIVE

Fourth-Quarter Worldwide Sales Were $16.4 Billion (5% Growth; 4% Growth ex-FX)
Fourth-Quarter GAAP EPS Was $1.19; Non-GAAP EPS Was $2.04; GAAP and Non-GAAP EPS Include a Charge of $0.05 per Share for the Acquisition of MK-8690 Sole Global Rights
Full-Year Worldwide Sales Were $65.0 Billion (1% Growth; 2% Growth ex-FX)
- KEYTRUDA/KEYTRUDA QLEX Sales Were $31.7 Billion (7% Growth Both Nominally and ex-FX); Includes KEYTRUDA QLEX Sales of $40 Million
- WINREVAIR Sales Were $1.4 Billion
- CAPVAXIVE Sales Were $759 Million
- GARDASIL/GARDASIL 9 Sales Were $5.2 Billion (39% Decline Both Nominally and ex-FX)
- Animal Health Sales Were $6.4 Billion (8% Growth; 9% Growth ex-FX)
Full-Year 2025 GAAP EPS Was $7.28; Non-GAAP EPS Was $8.98; GAAP and Non-GAAP EPS Include Charges of $0.20 per Share Related to Certain Business Development Transactions
Announced Positive Late-Stage Trial Results From 18 Phase 3 Trials in 2025
Augmented Pipeline and Portfolio Through Acquisitions of Verona Pharma and Cidara Therapeutics and License Agreement With Hengrui Pharma
In the Fourth Quarter
- Received FDA Commissioner’s National Priority Vouchers for Enlicitide and Sacituzumab Tirumotecan (Sac-TMT), Providing an Opportunity To Expedite Potential FDA Review Timelines for These Phase 3 Candidates
- Presented Positive Results From Phase 3 CORALreef Lipids and HeFH Trials Demonstrating Enlicitide Significantly Reduced LDL-C in Adults
- Reached Agreement With U.S. Government To Expand Access to Medicines and Lower Costs for Americans
Full-Year 2026 Financial Outlook
- Anticipates Worldwide Sales To Be Between $65.5 Billion and $67.0 Billion
- Expects Non-GAAP EPS To Be Between $5.00 and $5.15; Outlook Reflects a One-Time Charge of Approximately $3.65 per Share for the Acquisition of Cidara

RAHWAY, N.J.–(BUSINESS WIRE)–Merck & Co., Inc., Rahway, N.J., USA (NYSE: MRK), known as MSD outside the United States and Canada, today announced financial results for the fourth quarter and full year of 2025.

“In 2025, we continued to advance leading-edge science to deliver transformative medicines and vaccines that are improving health outcomes for patients around the world,” said Robert M. Davis, chairman and chief executive officer. “Our business benefited from demand for our innovative portfolio, including for KEYTRUDA, increasing contributions from new launches in cardiometabolic and respiratory as well as vaccines, and strong performance of Animal Health. The transformation of our portfolio, bolstered by the acquisitions of Verona Pharma and Cidara Therapeutics, is well underway, and momentum is building as we continue to execute on our strategy. Our progress positions us to continue delivering on our purpose for patients and creating durable value for shareholders.”

Financial Summary

$ in millions, except EPS amounts	Fourth Quarter				Year Ended
$ in millions, except EPS amounts	2025	2024	Change	Change Ex-Exchange	Dec. 31, 2025	Dec. 31, 2024	Change	Change Ex-Exchange
Sales	$16,400	$15,624	5%	4%	$65,011	$64,168	1%	2%
GAAP net income¹	2,963	3,743	-21%	-20%	18,254	17,117	7%	9%
Non-GAAP net income that excludes certain items^1,2*	5,088	4,372	16%	17%	22,513	19,444	16%	18%
GAAP EPS	1.19	1.48	-20%	-18%	7.28	6.74	8%	10%
Non-GAAP EPS that excludes certain items^2*	2.04	1.72	19%	19%	8.98	7.65	17%	19%
*Refer to table on page 9.

Generally Accepted Accounting Principles (GAAP) earnings per share (EPS) assuming dilution was $1.19 for the fourth quarter and $7.28 for the full year of 2025. Non-GAAP EPS was $2.04 for the fourth quarter and $8.98 for the full year of 2025. GAAP and non-GAAP EPS in the fourth quarter of 2025 include a charge of $0.05 per share related to an agreement with Dr. Falk Pharma GmbH (Falk) pursuant to which the Company secured the sole global rights to MK-8690. GAAP and non-GAAP EPS in the fourth quarter of 2024 include a charge of $0.23 per share related to the execution of licensing agreements with LaNova Medicines Ltd. (acquired by Sino Pharmaceutical Limited) and Hansoh Pharma. GAAP and non-GAAP EPS for the full years of 2025 and 2024 include charges of $0.20 and $1.28 per share, respectively, related to certain licensing agreements and asset acquisitions.

Non-GAAP EPS excludes acquisition- and divestiture-related costs, costs related to restructuring programs, and income and losses from investments in equity securities. Non-GAAP EPS in 2025 also excludes a net tax benefit, which reflects a net benefit related to favorable audit reserve adjustments. Non-GAAP EPS in the fourth quarter and full year of 2024 also exclude a benefit due to a reduction in reserves for unrecognized income tax benefits resulting from the expiration of the statute of limitations for assessments related to certain federal tax return years.

Fourth-Quarter Sales Performance

The following table reflects sales of the Company’s top products and significant performance drivers.

	Fourth Quarter
$ in millions	2025	2024	Change	Change Ex-Exchange	Commentary
Total Sales	$16,400	$15,624	5%	4%
Pharmaceutical	14,843	14,042	6%	4%	Increase primarily driven by growth in oncology as well as cardiometabolic and respiratory, partially offset by a decline in vaccines.
KEYTRUDA/ KEYTRUDA QLEX	8,372	7,836	7%	5%	Growth driven by strong global uptake in earlier-stage indications, including triple-negative breast cancer (TNBC), non-small cell lung cancer (NSCLC), renal cell carcinoma, cervical and head and neck cancers, as well as continued global demand in metastatic indications, including urothelial, gastric and endometrial cancers. Sales growth was partially offset by timing of purchases in the U.S. Sales of KEYTRUDA QLEX were $35 million.
GARDASIL/ GARDASIL 9	1,031	1,550	-34%	-35%	Decline primarily due to lower demand in China, as well as lower sales in Japan following the national catch-up immunization program, partially offset by higher sales in the U.S. and timing in certain international markets.
PROQUAD, M-M-R II and VARIVAX	619	594	4%	3%	Increase primarily reflects higher sales of PROQUAD, which largely resulted from both the replenishment of doses borrowed from the U.S. Centers for Disease Control and Prevention Pediatric Vaccine Stockpile and from higher demand in Europe, partially offset by lower demand for M-M-R II in certain international markets and lower demand for VARIVAX in the U.S.
JANUVIA/JANUMET	501	487	3%	3%	Growth driven by higher net pricing in the U.S., partially offset by lower demand in China as well as in most other international markets due to generic competition.
BRIDION	499	449	11%	11%	Growth primarily due to higher demand and net pricing in the U.S., partially offset by lower demand in several international markets due to ongoing generic competition.
WINREVAIR	467	200	133%	133%	Growth primarily reflects continued uptake in the U.S. and early launch uptake in certain international markets, partially offset by lower net pricing in the U.S. largely due to Medicare Part D redesign.
Lynparza*	389	365	7%	4%	Growth primarily due to higher demand in several international markets.
CAPVAXIVE	279	50	N/M	N/M	Growth largely due to continued uptake in the U.S.
PREVYMIS	275	215	28%	26%	Increase primarily due to higher demand in the U.S. as well as in most international markets, reflecting in part the launch of new indications.
Lenvima*	272	255	7%	6%	Increase due to higher sales in the U.S., primarily reflecting higher demand, partially offset by lower pricing.
WELIREG	220	160	37%	37%	Growth primarily due to higher demand in the U.S. and continued launch uptake in several international markets, partially offset by lower net pricing in the U.S.
OHTUVAYRE	178	–	–	–	Represents sales following the Company’s Oct. 7, 2025 acquisition of Verona Pharma plc (Verona Pharma).
Animal Health	1,505	1,397	8%	6%	Growth primarily due to higher demand of livestock products.
Livestock	987	889	11%	9%	Growth primarily driven by higher demand across all species, as well as improved supply and new product launches.
Companion Animal	518	508	2%	0%	Growth from new product launches was partially offset by lower demand for other products in portfolio, reflecting a reduction in veterinary visits. Sales of BRAVECTO line of products were $222 million and $209 million in current and prior-year quarters, respectively, which represents an increase of 6%, or 5% excluding impact of foreign exchange.
Other Revenues**	52	185	-71%	-15%	Decline primarily due to unfavorable impact of revenue-hedging activities and lower revenue from third-party manufacturing arrangements.

*Alliance revenue for this product represents the Company’s share of profits, which are product sales net of cost of sales and commercialization costs.

**Other revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities.

N/M – Not meaningful.

Full-Year Sales Performance

The following table reflects sales of the Company’s top products and significant performance drivers.

	Year Ended
$ in millions	Dec. 31, 2025	Dec. 31, 2024	Change	Change Ex-Exchange
Total Sales	$65,011	$64,168	1%	2%
Pharmaceutical	58,142	57,400	1%	1%
KEYTRUDA/KEYTRUDA QLEX	31,680	29,482	7%	7%
GARDASIL/GARDASIL 9	5,233	8,583	-39%	-39%
JANUVIA/JANUMET	2,544	2,268	12%	13%
PROQUAD, M-M-R II and VARIVAX	2,451	2,485	-1%	-2%
BRIDION	1,841	1,764	4%	4%
Lynparza*	1,450	1,311	11%	10%
WINREVAIR	1,443	419	N/M	N/M
Lenvima*	1,053	1,010	4%	4%
PREVYMIS	978	785	25%	23%
VAXNEUVANCE	825	808	2%	1%
CAPVAXIVE	759	97	N/M	N/M
WELIREG	716	509	41%	41%
ROTATEQ	673	711	-5%	-5%
Reblozyl*	525	371	41%	41%
LAGEVRIO	380	964	-61%	-61%
Simponi**	–	543	-100%	-100%
Animal Health	6,354	5,877	8%	9%
Livestock	3,896	3,462	13%	14%
Companion Animal	2,458	2,415	2%	2%
Other Revenues***	515	891	-42%	-6%

*Alliance revenue for Lynparza and Lenvima represent the Company’s share of profits, which are product sales net of cost of sales and commercialization costs. Alliance revenue for Reblozyl represents royalties.

**Marketing rights in former territories of the Company reverted to Johnson & Johnson on Oct. 1, 2024.

***Other revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities.

N/M – Not meaningful.

In addition, Koselugo alliance revenue was $436 million for the full year of 2025 compared with $170 million for the full year of 2024. The increase was due to an amendment to the collaboration agreement with AstraZeneca in 2025, which discontinued the provisions whereby the Company shared revenue and costs with AstraZeneca, and revised the payment structure, resulting in the Company’s recognition of a $150 million upfront payment and $175 million of regulatory milestones.

Full-year 2025 Pharmaceutical sales were $58.1 billion, representing growth of 1% both nominally and excluding the impact of foreign exchange. Sales growth was primarily driven by higher sales in oncology, particularly KEYTRUDA and WELIREG, as well as increased alliance revenue from Koselugo (resulting from the amendment to the collaboration agreement noted above), Reblozyl and Lynparza. Also contributing to sales growth were higher sales in the cardiometabolic and respiratory franchise largely attributable to the ongoing launch of WINREVAIR, as well as the inclusion of OHTUVAYRE sales resulting from the acquisition of Verona Pharma, which closed on Oct. 7, 2025. Growth in the diabetes franchise, largely attributable to higher net pricing of JANUVIA in the U.S., also contributed to sales growth. Sales growth in 2025 was partially offset by lower sales in the vaccines franchise reflecting lower sales of GARDASIL/GARDASIL 9, which were offset in part by the ongoing launch of CAPVAXIVE and the U.S. launch of ENFLONSIA. Lower sales in the immunology franchise (due to the return of the marketing rights for Simponi and Remicade in former Company territories to Johnson & Johnson on Oct. 1, 2024) and lower sales in the virology franchise (largely attributable to LAGEVRIO) also offset Pharmaceutical sales growth in 2025.

Full-year 2025 Animal Health sales were $6.4 billion, representing growth of 8%, or 9% excluding the impact of foreign exchange. Sales growth was primarily driven by the performance of Livestock products across all species and new product launches in Companion Animal. Sales of the BRAVECTO line of products were $1.1 billion in 2025, representing growth of 1% both nominally and excluding the impact of foreign exchange.

Fourth-Quarter and Full-Year Expense and Related Information

The table below presents selected expense information.

$ in millions	GAAP	Acquisition- and Divestiture- Related Costs³	Restructuring Costs	(Income) Loss From Investments in Equity Securities	Non- GAAP²
Fourth Quarter 2025
Cost of sales	$5,551	$1,054	$1,173	$-	$3,324
Selling, general and administrative	2,898	48	2	–	2,848
Research and development	3,886	5	(111)	–	3,992
Restructuring costs	213	–	213	–	–
Other (income) expense, net	432	–	–	206	226

Fourth Quarter 2024
Cost of sales	$3,828	$701	$121	$-	$3,006
Selling, general and administrative	2,864	29	16	–	2,819
Research and development	4,585	12	(1)	–	4,574
Restructuring costs	51	–	51	–	–
Other (income) expense, net	126	(31)	–	152	5

$ in millions	GAAP	Acquisition- and Divestiture- Related Costs³	Restructuring Costs	(Income) Loss From Investments in Equity Securities	Non- GAAP²
Year Ended Dec. 31, 2025
Cost of sales	$16,382	$2,871	$1,484	$-	$12,027
Selling, general and administrative	10,733	120	3	–	10,610
Research and development	15,789	19	175	–	15,595
Restructuring costs	889	–	889	–	–
Other (income) expense, net	151	(3)	–	(306)	460

Year Ended Dec. 31, 2024
Cost of sales	$15,193	$2,409	$495	$-	$12,289
Selling, general and administrative	10,816	117	83	–	10,616
Research and development	17,938	72	1	–	17,865
Restructuring costs	309	–	309	–	–
Other (income) expense, net	(24)	(79)	–	45	10

GAAP Expense, EPS and Related Information

Gross margin was 66.2% for the fourth quarter of 2025 compared with 75.5% for the fourth quarter of 2024. Gross margin was 74.8% for the full year of 2025 compared with 76.3% for the full year of 2024. The gross margin decline in both periods was primarily due to the unfavorable impacts of higher restructuring costs (primarily related to the accelerated depreciation of manufacturing lines at two sites under the 2025 Restructuring Program), inventory write-offs and amortization of intangible assets, as well as the recognition of inventory fair value step-up related to the Verona Pharma acquisition, partially offset by the favorable impact of product mix.

Selling, general and administrative (SG&A) expenses were $2.9 billion in the fourth quarter of 2025, an increase of 1% compared with the fourth quarter of 2024. The increase was primarily due to higher administrative costs, partially offset by lower promotional costs. Full-year 2025 SG&A expenses were $10.7 billion, a decrease of 1% compared with the full year of 2024. The decrease was primarily due to lower restructuring and promotional costs, partially offset by increased administrative costs.

Research and development (R&D) expenses were $3.9 billion in the fourth quarter of 2025, a decrease of 15% compared with the fourth quarter of 2024. The decrease was primarily due to lower charges for business development activity and a reduction to estimated contractual termination costs associated with restructuring actions, partially offset by higher clinical development costs. R&D expenses were $15.8 billion for the full year of 2025, a decrease of 12% compared with the full year of 2024. The decrease was primarily due to lower charges for business development activity, partially offset by higher clinical development spending and higher restructuring costs.

Other (income) expense, net, was $432 million of expense in the fourth quarter of 2025 compared with $126 million of expense in the fourth quarter of 2024 primarily due to higher net interest expense, higher foreign exchange losses and increased net losses from investments in equity securities. Other (income) expense, net, was $151 million of expense in the full year of 2025 compared with $24 million of income in the full year of 2024. The unfavorable year-over-year change primarily reflects $170 million of income in 2024 related to the expansion of an existing development and commercialization agreement with Daiichi Sankyo, as well as higher net interest expense and higher foreign exchange losses in 2025, partially offset by higher net income from investments in equity securities in 2025.

The effective tax rate was 13.4% for the fourth quarter of 2025 and 13.3% for the full year of 2025.

GAAP EPS was $1.19 for the fourth quarter of 2025 compared with $1.48 for the fourth quarter of 2024. The decrease was primarily driven by higher restructuring costs and amortization of intangible assets, partially offset by favorability from lower charges for business development transactions, as well as operational strength in the business driven in part by the benefits of the previously announced multiyear optimization initiative. GAAP EPS was $7.28 for the full year of 2025 compared with $6.74 for the full year of 2024. The increase was primarily driven by favorability from lower charges for business development transactions and operational strength in the business, partially offset by higher restructuring costs and amortization of intangible assets.

Non-GAAP Expense, EPS and Related Information

Non-GAAP gross margin was 79.7% for the fourth quarter of 2025 compared with 80.8% for the fourth quarter of 2024. The decrease was primarily due to higher inventory write-offs, partially offset by the favorable impact of product mix. Non-GAAP gross margin was 81.5% for the full year of 2025 compared with 80.8% for the full year of 2024. The increase was primarily due to the favorable impact of product mix, partially offset by higher inventory write-offs.

Non-GAAP SG&A expenses were $2.8 billion in the fourth quarter of 2025, an increase of 1% compared with the fourth quarter of 2024. The increase was primarily due to higher administrative costs, partially offset by lower promotional costs. Non-GAAP SG&A expenses were $10.6 billion for the full year of 2025, flat compared with the full year of 2024 as lower promotional costs were largely offset by higher administrative costs.

Non-GAAP R&D expenses were $4.0 billion in the fourth quarter of 2025, a decrease of 13% compared with the fourth quarter of 2024. Non-GAAP R&D expenses were $15.6 billion for the full year of 2025, a decrease of 13% compared with the full year of 2024. The decrease in both periods was primarily due to lower charges for business development activity, partially offset by higher clinical development costs.

Non-GAAP other (income) expense, net, was $226 million of expense in the fourth quarter of 2025 compared with $5 million of expense in the fourth quarter of 2024 primarily due to higher net interest expense and higher foreign exchange losses. Non-GAAP other (income) expense, net, was $460 million of expense in the full year of 2025 compared with $10 million of expense in the full year of 2024. The unfavorable year-over-year change primarily reflects $170 million of income in 2024 related to the expansion of an existing development and commercialization agreement with Daiichi Sankyo, as well as higher net interest expense and higher foreign exchange losses in 2025.

The non-GAAP effective tax rate was 15.4% for the fourth quarter of 2025 and 14.4% for the full year of 2025.

Non-GAAP EPS was $2.04 for the fourth quarter of 2025 compared with $1.72 for the fourth quarter of 2024. Non-GAAP EPS was $8.98 for the full year of 2025 compared with $7.65 for the full year of 2024. The increase in both periods was primarily driven by favorability from lower charges for business development transactions, as well as operational strength in the business driven in part by the benefits of the previously announced multiyear optimization initiative.

A reconciliation of GAAP to non-GAAP net income and EPS is provided in the table that follows.

	Fourth Quarter		Year Ended
$ in millions, except EPS amounts	2025	2024	Dec. 31, 2025	Dec. 31, 2024
EPS
GAAP EPS	$1.19	$1.48	$7.28	$6.74
Difference	0.85	0.24	1.70	0.91
Non-GAAP EPS that excludes items listed below²	$2.04	$1.72	$8.98	$7.65

Net Income
GAAP net income¹	$2,963	$3,743	$18,254	$17,117
Difference	2,125	629	4,259	2,327
Non-GAAP net income that excludes items listed below^1,2	$5,088	$4,372	$22,513	$19,444

Excluded Items:
Acquisition- and divestiture-related costs³	$1,107	$711	$3,007	$2,519
Restructuring costs	1,277	187	2,551	888
Loss (income) from investments in equity securities	206	152	(306)	45
Decrease to net income before taxes	2,590	1,050	5,252	3,452
Estimated income tax (benefit) expense⁴	(465)	(421)	(993)	(1,125)
Decrease to net income	$2,125	$629	$4,259	$2,327

Pipeline and Portfolio Highlights

In 2025, the Company announced positive late-stage trial results from 18 Phase 3 trials and began enrolling patients in 21 new Phase 3 studies evaluating multiple indications and therapeutic areas, with approximately 80 Phase 3 studies currently underway.

Throughout the fourth quarter, the Company made important progress to advance its broad, diverse pipeline, meeting significant regulatory and clinical milestones.

Oncology:
- U.S. Food and Drug Administration (FDA) approved KEYTRUDA and KEYTRUDA QLEX, each in combination with Padcev, for the perioperative treatment of adult patients with muscle-invasive bladder cancer (MIBC) who are ineligible for cisplatin-based chemotherapy based on Phase 3 KEYNOTE-905 trial.
  - Approvals represent the first PD-1 inhibitor plus antibody-drug conjugate (ADC) regimens for this patient population.
- FDA awarded a priority review voucher under the Commissioner’s National Priority Voucher (CNPV) pilot program for sac-TMT, an investigational anti-TROP2 ADC being developed in collaboration with Kelun-Biotech.
- European Commission (EC) approved the subcutaneous route of administration and new pharmaceutical formulation of KEYTRUDA for use across all KEYTRUDA indications for adult patients in Europe.
- FDA accepted two supplemental Biologics License Applications (sBLAs) for KEYTRUDA and KEYTRUDA QLEX, each with Trodelvy, for the first-line treatment of certain patients with PD-L1+ inoperable (unresectable) locally advanced or metastatic TNBC based on Phase 3 KEYNOTE-D19/ASCENT-04 trial.
  - FDA set Prescription Drug User Fee Act (PDUFA) dates in the second half of 2026 for these applications.
- Announced positive topline results from Phase 3 KEYNOTE-B15 trial in patients with MIBC who are eligible for cisplatin-based chemotherapy showing KEYTRUDA plus Padcev significantly improved event-free survival (EFS), overall survival (OS) and pathologic complete response (pCR) rates versus neoadjuvant chemotherapy and surgery when given before and after surgery.
- In collaboration with Moderna, Inc. (Moderna), announced median five-year follow-up data from Phase 2b KEYNOTE-942/mRNA-4157-P201 study for intismeran autogene, an investigational mRNA-based individualized neoantigen therapy, in combination with KEYTRUDA in patients with high-risk melanoma (stage III/IV) following complete resection.