Merck said it expects to lose $200 million to already-announced tariffs in 2025 amid a roiling trade war between the U.S. and China.
The estimate doesn’t account for the possibility that President Donald Trump will fulfill his long-held promise of imposing levies on pharmaceutical imports to the U.S., which would be on top of existing tariffs. That means Merck, which has a substantial manufacturing presence in Europe, could face additional costs from future tariffs.
The company’s stock fell as much as 2.8% after markets opened in New York Thursday.
For the first quarter, Merck’s results beat estimates. First quarter sales were $15.5 billion, above the $15.3 billion analysts had predicted. Adjusted earnings of $2.22 per share outpaced expectations of $2.13 a share.
Sales of its cancer blockbuster Keytruda were $7.2 billion, missing Wall Street’s estimates of $7.5 billion. Winrevair, the company’s recently launched treatment for a rare lung disease, beat analyst expectations with $280 million in revenue.
The drugmaker is still dealing with the fallout over its HPV vaccine Gardasil in China, where a drop in demand forced it to halt shipments and rescind its previous forecast of $11 billion in annual sales of the shot by 2030. Gardasil sales fell 41% in the first quarter, in line with analysts’ already lowered estimates. Excluding China, revenue from the vaccine increased 14%, the company said.
Merck’s shares have fallen nearly 40% over the past 12 months, driven by uncertainty around the future of Gardasil, which protects against cancer-causing HPV infections, and mounting concerns about impending competition for Keytruda, a cancer medicine that accounts for nearly half of its revenue.
Merck expects to launch an easier-to-use version of Keytruda later this year in a bid to retain 30% to 40% of the market for the original. Halozyme Therapeutics Inc. is suing to block Merck from selling the new Keytruda, claiming in a lawsuit filed Thursday that Merck has infringed its intellectual property.
Merck is counting on the lung disease treatment Winrevair and other new medicines to offset the impending decline of Keytruda. It’s also betting on novel treatments for obesity and cardiovascular disease. Merck expects final-stage results later this year from a study on a pill designed to dramatically lower bad cholesterol, and it has signed deals worth up to $4 billion for the rights to others in the early stages of development for weight loss and heart disease.
For the full year, adjusted earnings will be between $8.82 per share and $8.97 per share, the Rahway, New Jersey-based company said in a statement Thursday, reduced by 6 cents to account for a recent licensing deal. Merck maintained its full-year sales projection of $64.1 billion to $65.6 billion.
