Jamie Spencer
Shares of Merck (MRK) fell sharply on Tuesday after the company issued a lower-than-expected 2025 sales forecast, citing a temporary pause in Gardasil vaccine shipments to China. The stock dropped 10% to $89.72, even as broader markets gained.
Gardasil Shipments to China Paused
Merck plans to halt Gardasil shipments to China until at least mid-2025 to manage inventory levels. CEO Robert Davis said that weak Chinese consumer demand and economic slowdown contributed to the decision. Sales of Gardasil, a vaccine for HPV, declined 17% YoY to $1.55 billion in Q4.
Despite the pause, Merck sees long-term growth in China following recent regulatory approval for the vaccine’s use in males.
2025 Earnings and Revenue Forecast
- Adjusted EPS: $8.88 – $9.03 (vs. $9.13 expected)
- Revenue: $64.1B – $65.6B (vs. $67.07B expected)
The forecast fell short of Wall Street expectations, leading to the sharp stock decline.
Q4 Performance and Keytruda Growth
- Adjusted EPS: $1.72 (vs. $1.61 expected)
- Revenue: $15.6B (vs. $15.48B expected)
- Keytruda sales: $7.84B (+19% YoY)
Despite a strong Q4 performance, concerns about slowing Gardasil sales and China’s economic headwinds weighed on investor sentiment.
Impact of U.S. Tariffs
Merck executives stated that the company expects a minimal impact from proposed U.S. tariffs on Chinese, Mexican, and Canadian imports, citing low levels of manufacturing in those regions.
