Merck & Co., Inc. (MRK) 2024 Q2 Earnings Call Summary
August 1, 2024 
Merck & Co., Inc. (MRK)
| Market Cap | 0.21T |
|---|---|
| Beta | |
| P/E | 39.75452774136047 |
| EPS | 12.247158441111395 |
| Dividend | 0 |
| Dividend Yield | 0.00% |
Optimistic Highlights
- Strong Business Momentum: Demonstrated strong growth, reflecting continued demand across the broad portfolio.
- Successful Product Launches: Launched WINREVAIR for pulmonary arterial hypertension and received FDA approval for CAPVAXIVE, a pneumococcal conjugate vaccine for adults.
- Pipeline Expansion: Closed the acquisition of EyeBio, expanding efforts in ophthalmology, and the Animal Health business acquired Elanco’s aqua business.
- Financial Performance: Achieved strong growth with total company revenues of $16.1 billion, an increase of 7% (11% excluding the impact of foreign exchange).
Pessimistic Highlights
- GARDASIL Dynamics in China: Experienced a significant step down in shipments to China, impacting the quarter's performance.
- Inventory Adjustments: Potential for shipments to come below the 2024 contracted doses for GARDASIL in China, representing a potential headwind.
Company Outlook
- Updated Full Year Guidance: Raised and narrowed full-year revenue guidance to between $63.4 and $64.4 billion, reflecting strong business momentum.
- Investment in Innovation: Committed to disciplined investments in science to drive long-term value, including the potential for additional business development transactions.
- Confidence in GARDASIL: Despite current challenges in China, remains confident in achieving sales of over $11 billion by 2030.
Q & A Highlights
Q: Can you quantify what percent of your international sales are coming from China for GARDASIL? (Chris Schott, JPMorgan)
A: China represents about 60% to 70% of the numbers for GARDASIL. The step down in 2Q was surprising and is being assessed for future shipments. (Rob Davis)
Q: Could you speak to whether there's any future contracting happening for GARDASIL in China and whether your long-term price integrity will stay intact? (Umer Raffat, Evercore)
A: We have always expected a 9-valent competitor in China and have contracted doses for 2025 less than 2024, anticipating competition but also potential for male vaccination. (Rob Davis, Caroline Litchfield)
Q: Can you characterize the pace of new starts for WINREVAIR and the timeline from prescription to start? (Carter Gould, Barclays)
A: Over 2,000 patients received a prescription for WINREVAIR by the end of June, with about 75% to 80% expected to receive commercial product. The timeline from prescription to start is about one month. (Rob Davis)
Q: How does clesrovimab compare on hospitalizations to Beyfortus, and how does it achieve longer durability given that it has a shorter half-life? (Steve Scala, TD Cowen)
A: Clesrovimab is designed to cover the entire RSV season with a single dose, and detailed findings will be presented at an upcoming scientific congress. (Dean Li)
Q: For WINREVAIR, is the conversion of 75% to 80% of scripts into commercial embedded within fiscal year '24 guide? And any timeline on the INTerpath filing? (James Shin, Deutsche Bank)
A: Yes, the conversion rate is embedded within the FY '24 guidance. The timeline for the INTerpath filing is focused on getting the Phase III fully enrolled. (Rob Davis, Dean Li)