MSD beats revenue expectations amid pivot to new drugs

MSD Ireland's fill site at Carlow employs almost 530 staff.

MSD beat third-quarter sales expectations on strong results from its pneumonia vaccine as the company works to find new growth drivers ahead of the upcoming patent loss for its star drug Keytruda.

The drugmaker, known as Merck & Co in the US and Canada, operates eight sites across Ireland, located in Carlow, Cork, Dublin, Meath, Louth and Tipperary.

The company has been cutting costs as it prepares for lower prices and generic competition for its blockbuster cancer drug Keytruda, which is manufactured in Swords, Co Dublin. Research and development spending fell by more than $1.6bn (€1.4bn) in the quarter from a year earlier, primarily due to lower charges for its business development activity, and the company also trimmed selling and administrative expenses.

Keytruda and Winrevair for a rare lung disease, another of the medicines it is nurturing to bolster future sales, missed expectations in the quarter. Keytruda’s patents are expected to start expiring in 2028, and the drug could face government-mandated price negotiations as early as 2027.

The company shaved its 2025 sales guidance by $300m (€257.3m) at the top end, while modestly raising its full-year profit forecast. Merck’s shares have declined almost 13% this year through Wednesday’s close.

In July, it said it would slash $3 billion annual spending by the end of 2027, mainly through cutting administrative, sales and research jobs and reducing real estate holdings. It plans to reinvest the savings into launching new drugs.

In September, it snagged US regulatory approval for a new formulation of Keytruda that’s faster and easier to administer. The medicine, called Keytruda Qlex, is given in minutes as a shot under the skin. It’s a key component of Merck’s strategy, allowing it to focus on the newer compound that has a longer remaining patent life.

Drugmakers are facing the threat of tariffs from President Donald Trump, who has vowed to impose them on companies that don’t lower prices and boost manufacturing in the US. Pfizer and AstraZeneca have cut deals with the White House to make some medicines available at steep discounts and recalibrate prices compared to other wealthy countries in exchange for three years of tariff exemptions.

Merck, which hasn’t disclosed a deal, has said it’s stockpiled enough Keytruda to protect itself from tariffs this year. It previously announced plans to invest more than $9bn (€7.7bn) in domestic manufacturing over the next four years, an effort designed to boost the amount of medicine it produces in the US.

Bloomberg