By Michael Erman
(Reuters) -Merck said it will pause shipments of Gardasil to China through at least mid-year, as continued weak demand for the HPV vaccine there is expected to hurt 2025 revenue, but it still posted a strong fourth-quarter profit on sales of cancer drug Keytruda.
Shares of the U.S. drugmaker fell nearly 8% to $91.84 in premarket trading.
The company said it expects 2025 revenue in the range of $64.1 billion to $65.6 billion. Analysts, on average, had forecast revenue of $67.3 billion for the year, according to LSEG data.
It expects 2025 earnings per share in the range of $8.88 to $9.03 a share compared with an average analyst estimate of $9.03 a share.
Gardasil, which prevents cancers caused by the human papillomavirus, has been one of Merck’s top growth drivers aside from Keytruda, and much of its international growth had come from China before sales of the shot slowed significantly there beginning in the second quarter of 2024.
Merck said the pause in Gardasil shipments to China began this month. The company has blamed economic issues in the country for pushing down demand as well as China’s anti-bribery and anti-corruption drive that has also hurt sales. Beijing has been running a campaign targeting bribery of doctors that has disrupted business and scuttled hospital deals with international pharmaceutical companies.
Merck shares closed at $99.97 on Monday, more than 20% below the levels they were trading at in July.
Its fourth quarter Gardasil sales were $1.55 billion, below Wall Street’s forecast of around $1.8 billion, which has been pared back nearly 20% since the issues in China were disclosed last summer.
Still, sales of Keytruda – the world’s top-selling prescription medicine – more than offset that shortfall. The company sold over $7.8 billion worth of the drug in the quarter, compared with analyst forecasts of around $7.4 billion.
The drugmaker said it earned $4.37 billion, or $1.72 a share, in the quarter, excluding one-time items, compared with $66 million, or 3 cents a share, last year. Analysts had expected the company to earn $1.62 a share in the quarter.
Total revenue in the quarter was $15.6 billion, up from $14.6 billion a year earlier. That compares with analyst expectations of $15.5 billion.
(Reporting by Michael Erman and Mariam Sunny; Editing by Lincoln Feast.)
