Merck & Co., Inc. Q4 FY2024 earnings call

Rob Davis emphasized 2024 was a year of significant progress in developing transformative medicines and vaccines. GARDASIL in China faced inventory and demand challenges, leading to paused shipments. Caroline Litchfield detailed Q4 financials, with Human Health up 8% and Animal Health up 13%. Dr. Dean Li provided research updates, including progress in cardiometabolic, infectious diseases, vaccines, oncology, and regulatory approvals, with key trials and approvals noted.

Human Health business saw sales increase 8%, driven by Oncology. KEYTRUDA sales grew 21% to $7.8 billion. GARDASIL sales were $1.6 billion, down 18% due to lower demand in China. CAPVAXIVE had sales of $50 million, and VAXNEUVANCE decreased 9%. WINREVAIR contributed $200 million. Animal Health business had sales growth of 13%.

Merck's 2025 non-GAAP revenue guidance is $64.1 to $65.6 billion, representing 2%-4% growth ex-exchange. Excluding GARDASIL China, growth is 7%-9%. EPS expected $8.88-$9.03. Impact of Medicare Part D redesign and JANUVIA price change noted. Share repurchase plans remain with a modest level expected.

Risks include China market dynamics affecting GARDASIL sales, with inventory levels and consumer spending in China posing challenges. Uncertainty in the timing and extent of economic recovery in China impacts long-term GARDASIL growth. Risks also relate to the KEYTRUDA LOE period and competition from other companies' pipeline advancements.

Q: Umer Raffat asked about WINREVAIR growth.

A: Rob Davis stated confidence in WINREVAIR's growth, with January returning to expected levels.

Q: Terence Flynn inquired about M&A and GARDASIL.

A: Rob Davis said long-term expectations unchanged, business development open to deals.

Q: Luisa Hector asked on oral PCSK9.

A: Dr. Dean Li discussed Phase 3 trials and combinations.

Q: Mohit Bansal asked on GARDASIL inventory.

A: Rob Davis spoke on inventory burn and Zhifei's financial position.

Q: Daina Graybosch asked on WINREVAIR HYPERION trial.

A: Dr. Dean Li discussed trial outcomes and safety.

Q: Geoff Meacham asked on GARDASIL inventory threshold and BD.

A: Rob Davis spoke on inventory burn and vaccines R&D.

Q: Chris Schott asked on GARDASIL long-term guidance and ex-China.

A: Rob Davis withdrew $11B target and noted ex-China growth.

Q: Tim Anderson asked on KEYTRUDA long-term guidance and competition.

A: Rob Davis spoke on pipeline potential and Dean Li on TROP2 and PD-1 VEGF.

Q: Akash Tewari asked on oncology $25B guidance.

A: Rob Davis on pipeline components and Dr. Dean Li on TROP2 strategy.

Q: Trung Huynh asked on manufacturing and transfer pricing.

A: Caroline Litchfield on immaterial impact.

Q: Vamil Divan asked on WINREVAIR and Cadence.

A: Dr. Dean Li on broader implications and Caroline on inventory.

Q: Courtney Breen asked on GARDASIL inventory write-off and Part D.

A: Caroline Litchfield on low write-off risk and Part D impact.

Q: James Shin asked on GARDASIL ACIP and guidance.

A: Rob Davis and Dr. Dean Li on ACIP and FDA standards.