On Thursday, Merck & Co Inc (NYSE:MRK) reported third-quarter sales of $16.66 billion, up 4% year over year, beating the consensus of $16.47 billion.

Merck reported a decline of 11% in sales of Gardasil to $2.31 billion, a vaccine that prevents cancer from HPV, the most common sexually transmitted infection in the U.S., due to lower demand in China, partially offset by higher sales in the U.S., driven by public-sector buying patterns, higher pricing and demand, and higher demand in most international regions.

Beyond Gardasil, Goldman Sachs highlights a solid lineup of positives for Merck, including robust performance from key franchises like Keytruda and promising momentum from both commercial products like Winrevair and Capvaxive and development-stage innovations such as clesrovimab and tulisokobart.

Merck's blockbuster cancer immunotherapy Keytruda generated $7.43 billion in revenue during the quarter, up 17% from the year-earlier period. 

The newly approved Winrevair (sotatercept) for adults with pulmonary arterial hypertension generated sales of $149 million.

Goldman reiterates the Buy rating for Merck stock, decreasing the price target from $139 to $135, reflecting lowered resetting of Gardasil forecasts.

BMO Capital Markets suggests that Merck's Gardasil sales in China may continue to be challenging through 2025.

Although Merck does not provide specific product-level forecasts, CEO Rob Davis offered some perspective, anticipating Gardasil sales in China could reach around $2 billion to $3 billion in 2025.

Winrevair continues to show strong performance, driven by organic demand. According to a BMO analyst, there was some initial skepticism about the organic demand for Winrevair after comments regarding stocking in Q2 2024.

However, the recent performance data has restored confidence, indicating that the drug is experiencing sustained demand growth, with an uptake of approximately 80% for the quarter.

This trend is expected to continue into 2025, particularly with the forthcoming ZENITH and CADENCE trials.

BMO cut the price target from $150 to $136, with an Outperform rating.

Price Action: MRK stock is down 0.22% at $102.07 at the last check on Friday.

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Image via Merck