Shares of Merck slid Tuesday after the drugmaker surprised Wall Street with a lower-than-expected 2025 sales forecast due partly to a pause in shipments of one of its top-selling products to China.
The drugmaker plans to temporarily pause shipments of its Gardasil vaccine to China at least through the middle of the year. Chairman and CEO Robert Davis told analysts the pause will help pare inventory and support the financial position of the drugmaker’s commercialization partner in China.
He said market dynamics in China, where Gardasil sales have slumped for a few quarters, remain challenging.
The International Monetary Fund last month forecast that China’s economy, the second-largest in the world, would decelerate from 4.8% last year, to 4.6% in 2025 and 4.5% in 2026. A collapse in the Chinese housing market has undermined consumer confidence.
Overall sales of Gardasil fell 17% to $1.55 billion in the final quarter of last year, mainly due to lower demand in China.
Gardasil vaccine protects against cancer-causing human papilloma virus or HPV infections. The pause announcement comes a month after Merck received approval in China for use of the vaccine in males.
“We believe China still represents a significant, long-term opportunity for Gardasil, given the large number of females and now males with our recent approval that are not yet immunized,” Davis said.
For 2025 Merck, based in , Rahway, New Jersey, expects adjusted earnings to range between $8.88 and $9.03 per share on $64.1 billion to $65.6 billion in sales.
Analysts had been projecting earnings of $9.13 per share on $67.07 billion in sales, according to FactSet.
For the recently completed fourth quarter, Merck booked an adjusted profit of $1.72 per share on $15.6 billion in revenue. Sales of top-selling cancer treatment Keytruda climbed 19% to $7.84 billion.
Analysts expected earnings of $1.61 per share on $15.48 billion in revenue.
Shares of Merck & Co. Inc. tumbled nearly 10%, or $9.64, to $90.15 at the opening bell Tuesday.
