Executive Summary

Q4 2024 delivered solid topline and margin performance while Merck reset HPV vaccine expectations in China: revenue $15.6B (+7% YoY), GAAP EPS $1.48, non-GAAP EPS $1.72; non-GAAP gross margin 80.8% (+360 bps YoY) .
Oncology remained the growth engine: KEYTRUDA up 19% YoY to $7.84B; WELIREG +122% YoY; WINREVAIR contributed $200M as uptake broadened .
2025 outlook introduced: sales $64.1–$65.6B, non-GAAP EPS $8.88–$9.03; shipments of GARDASIL to China paused from Feb through at least mid-year; EPS includes ~$0.09 one-time charge; FX headwind ~$0.35/share .
Management highlighted catalysts: subcutaneous pembrolizumab, WINREVAIR ZENITH hard outcomes data (ACC ’25), clesrovimab RSV BLA acceptance (PDUFA 6/10/25), and continued KEYTRUDA leadership in earlier-stage cancers .
Street estimate comparisons unavailable (S&P Global access limit); no beat/miss determination provided at time of this recap.

What Went Well and What Went Wrong

What Went Well

KEYTRUDA demand across metastatic and earlier-stage indications drove 19% YoY growth; favorable mix and lower royalty rates lifted gross margin (GAAP 75.5%; non-GAAP 80.8%) .
WINREVAIR ramp: $200M in Q4; ~1,500 new U.S. patients in Q4; ~5,200 new prescriptions since launch with ~80% conversion to commercial product; approvals now in >35 countries .
Pipeline/regulatory momentum: RSV clesrovimab BLA accepted (PDUFA 6/10/25); subcutaneous pembrolizumab met primary endpoints; CHMP positive for CAPVAXIVE adult pneumococcal; oncology ADC programs advanced .

What Went Wrong

GARDASIL/GARDASIL 9 declined 17% YoY in Q4 on China weakness; management paused China shipments to accelerate inventory normalization at the partner (Zhifei) and acknowledged macro softness .
Diabetes portfolio under pressure: JANUVIA/JANUMET down 38% YoY in Q4 on U.S. pricing, generics ex-U.S., and supply constraints in China .
Medicare Part D redesign expected to reduce 2025 sales by ~$400M, primarily impacting WINREVAIR and small-molecule oncology (WELIREG, Lynparza, Lenvima); KEYTRUDA $200M wholesaler buy-in in Q4 will reverse in Q1 2025 .

Financial Results

Quarterly summary vs prior periods

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Billions)	$16.112	$16.657	$15.624
GAAP EPS ($)	$2.14	$1.24	$1.48
Non-GAAP EPS ($)	$2.28	$1.57	$1.72
GAAP Gross Margin (%)	76.8%	75.5%	75.5%
Non-GAAP Gross Margin (%)	80.9%	80.5%	80.8%

Notes: Q4 YoY revenue +7%; non-GAAP EPS significantly above prior-year impacted by lower BD charges and tax reserve releases .

Q4 2024 product and segment breakdown

Item ($USD Millions)	Q4 2023	Q4 2024	YoY Change
Total Sales	$14,630	$15,624	+7%
Pharmaceutical	$13,141	$14,042	+7%
KEYTRUDA	$6,608	$7,836	+19%
GARDASIL/GARDASIL 9	$1,871	$1,550	-17%
PROQUAD/M‑M‑R II/VARIVAX	$545	$594	+9%
JANUVIA/JANUMET	$787	$487	-38%
BRIDION	$429	$449	+5%
Lynparza (alliance revenue)	$315	$365	+16%
Lenvima (alliance revenue)	$226	$255	+13%
PREVYMIS	$175	$215	+23%
WINREVAIR	—	$200	n/m
VAXNEUVANCE	$176	$161	-9%
WELIREG	$72	$160	+122%
Animal Health	$1,278	$1,397	+9%
Livestock	$808	$889	+10%
Companion Animal	$470	$508	+8%
Other Revenues	$211	$185	-13%

KPIs (Q4 operating metrics)

KPI	Q4 2024
WINREVAIR new U.S. patients (approx)	~1,500
WINREVAIR total new prescriptions since launch	~5,200
WINREVAIR conversion to commercial product	~80%
KEYTRUDA U.S. wholesaler inventory buy-in (to reverse in Q1)	~$200M

Guidance Changes

Metric/Item	Period	Previous Guidance	Current Guidance	Change
Sales	FY 2025	N/A	$64.1–$65.6B	New
Non-GAAP Gross Margin	FY 2025	N/A	~82.5%	New
Non-GAAP Operating Expenses	FY 2025	N/A	$25.4–$26.4B	New
Non-GAAP Other (Income) Expense, net	FY 2025	N/A	$300–$400M expense	New
Non-GAAP Effective Tax Rate	FY 2025	N/A	16–17%	New
Non-GAAP EPS	FY 2025	N/A	$8.88–$9.03 (incl. ~$0.09 one-time)	New
Share Count (diluted)	FY 2025	N/A	~2.53B	New
GARDASIL China shipments	H1 2025	N/A	Paused from Feb through at least mid-year	Lower shipments (inventory normalization)
Medicare Part D redesign impact	FY 2025	N/A	~-$400M sales headwind (WINREVAIR, WELIREG, Lynparza, Lenvima)	Headwind
KEYTRUDA wholesaler inventory	Q1 2025	N/A	~$200M Q4 buy-in to reverse	Headwind in Q1
JANUVIA list price	FY 2025	N/A	Lower list price; expect higher net sales (Medicaid rebate dynamics)	Positive net mix
Dividend	Q1 2025	N/A	$0.81 per share declared	Maintained/paid

Earnings Call Themes & Trends

Topic	Q2 2024 (Previous Mentions)	Q3 2024 (Previous Mentions)	Q4 2024 (Current Period)	Trend
GARDASIL China dynamics	Step down in Zhifei shipments; anti-corruption drag on CDC engagement; scenario baked into FY24 guide	Inventories above normal at Zhifei; shipments similar to Q3; double-digit ex-China growth; target $2–3B China contribution discussed	Shipment pause from Feb; macro weakness; inventory normalization priority	Near-term headwind; groundwork for recovery
Oncology performance	KEYTRUDA leadership in early-stage NSCLC, women’s cancers; ADC pipeline progress	KEYTRUDA OS data in TNBC/cervical; continued early-stage approvals; ADCs advancing	KEYTRUDA +19% YoY; continued mix-driven margin gains	Strong, sustained
WINREVAIR launch	Initial U.S. launch; >1,000 patients started; ~75–80% conversion; CHMP positive	$149M sales; ~3,700 new prescriptions; EU approval; coverage ~60% lives	$200M sales; ~1,500 new patients in Q4; >35 countries approved	Accelerating adoption
Vaccines portfolio (CAPVAXIVE, RSV)	CAPVAXIVE FDA/ACIP; clesrovimab topline positive	CAPVAXIVE ACIP expanded to 50–64; clesrovimab data presented	clesrovimab BLA accepted (PDUFA 6/10/25); CAPVAXIVE CHMP positive	Building to 2025 launches
Tariffs/macro	—	—	Proposed tariffs assessed; impact immaterial given low mfg footprint in China/Mexico/Canada	Limited risk
Part D redesign	—	—	~$400M 2025 sales headwind; product exposure detailed	Known policy headwind

Management Commentary

“We’ve made the decision to take a new approach and temporarily paused shipments to China beginning this month and through at least midyear…to accelerate reduction of inventory and help support the financial position of our partner” — Robert Davis, CEO .
“Approximately 1,500 new patients in the U.S. received a prescription [WINREVAIR] in Q4…~80% of those patients who receive a prescription will receive commercial product” — Caroline Litchfield, CFO .
“ZENITH…first PAH trial ever stopped early for overwhelming efficacy…hard outcomes of lung transplantation, hospitalization and death” — Dean Li, President Merck Research Labs .
“We expect Medicare Part D redesign to have a negative impact to sales of approximately $400 million, primarily affecting WINREVAIR and…WELIREG, Lynparza and Lenvima” — Caroline Litchfield .

Q&A Highlights

WINREVAIR trajectory: Management reaffirmed strong 2025 growth contribution; January trends tracking to expectations; bolus patients still converting, breadth of prescribers expanding .
BD/M&A appetite: Focus remains science-led deals in $1–$15B range; continued interest in second/third-gen cardiometabolic (oral GLP‑1, outcomes-focused) and oncology assets .
China HPV market: No specific Zhifei inventory disclosed; pause intended to normalize; long-term opportunity intact with recent male approval in China and low global penetration .
KEYTRUDA LOE period concerns: Company points to >$50B potential from diversified late-stage pipeline and oncology new growth drivers; may consider longer-term guidance but no timeline set .
Tariffs: CFO characterized proposed tariffs impact as immaterial; low manufacturing in targeted geographies .

Estimates Context

S&P Global consensus estimates for Q4 2024 EPS and revenue were not retrievable at the time of writing due to access limits; therefore, beat/miss vs Street could not be assessed. Values typically sourced from S&P Global were unavailable for this recap.

Key Takeaways for Investors

Oncology momentum and margin mix offset vaccine headwinds: KEYTRUDA +19% YoY in Q4 and WELIREG/ADC progress support sustained margin strength (non-GAAP GM 80.8%) .
WINREVAIR is scaling: $200M Q4 sales, accelerating patient starts, and global expansion underpin 2025 growth even as Part D redesign creates a manageable headwind .
China reset is tactical: Shipment pause should de-risk inventory and working capital at the partner; ex-China GARDASIL demand remains robust, preserving medium-term vaccine thesis .
2025 setup: Guidance embeds FX and policy headwinds, one-time charges, and KEYTRUDA inventory normalization; watch Q1 for the ~$200M reversal and cadence into H2 reacceleration .
Near-term catalysts: ACC ’25 ZENITH outcomes for WINREVAIR, RSV clesrovimab PDUFA (6/10/25), subcutaneous pembrolizumab filing and potential launch, plus CAPVAXIVE market expansion .
Pipeline diversification is central to navigating KEYTRUDA LOE: management reiterated confidence in >$50B potential from late-phase assets spanning oncology, cardiometabolic, immunology, and infectious diseases .
Dividend support continues: $0.81/share declared for Q1 2025; balance sheet and authorization enable flexible buybacks as needed .

Citations: Q4 press release –; Q4 8‑K (Item 2.02 and exhibits) –; Q4 transcript –; Q3 press release/transcript – –; Q2 press release/transcript – –.

Merck & Co., Inc. (MRK)·Q4 2024 Earnings Summary