Merck & Co. · Earnings release

News Release

Merck

& Co., Inc., Rahway, N.J., USA Announces Fourth-Quarter and Full-Year 2025 Financial Results;Highlights Progress Advancing Broad, Diverse Pipeline

Reports Strength in Oncology and Animal Health,

Plus Increasing Contributions From WINREVAIR and CAPVAXIVE

-

Fourth-Quarter Worldwide Sales Were $16.4 Billion (5% Growth; 4% Growth ex-FX)

-

Fourth-Quarter GAAP EPS Was $1.19; Non-GAAP EPS Was $2.04; GAAP and Non-GAAP EPS Include a Charge of $0.05 per Share for the

Acquisition of MK-8690 Sole Global Rights

-

Full-Year Worldwide Sales Were $65.0 Billion (1% Growth; 2% Growth ex-FX)

o

KEYTRUDA/KEYTRUDA QLEX Sales Were $31.7 Billion (7% Growth Both Nominally and ex-FX); Includes KEYTRUDA QLEX Sales of $40 Million

o

WINREVAIR Sales Were $1.4 Billion

o

CAPVAXIVE Sales Were $759 Million

o

GARDASIL/GARDASIL 9 Sales Were $5.2 Billion (39% Decline Both Nominally and ex-FX)

o

Animal Health Sales Were $6.4 Billion (8% Growth; 9% Growth ex-FX)

-

Full-Year 2025 GAAP EPS Was $7.28; Non-GAAP EPS Was $8.98; GAAP and Non-GAAP EPS Include Charges of $0.20 per Share Related to

Certain Business Development Transactions

-

Announced Positive Late-Stage Trial Results From 18 Phase 3 Trials in 2025

-

Augmented Pipeline and Portfolio Through Acquisitions of Verona Pharma and Cidara Therapeutics and License Agreement With Hengrui

Pharma

-

In the Fourth Quarter

o

Received FDA Commissioner’s National Priority Vouchers for Enlicitide and Sacituzumab Tirumotecan (Sac-TMT), Providing an Opportunity

To Expedite Potential FDA Review Timelines for These Phase 3 Candidates

o

Presented Positive Results From Phase 3 CORALreef Lipids and HeFH Trials Demonstrating Enlicitide

Significantly Reduced LDL-C in Adults

o

Reached Agreement With U.S. Government To Expand Access to Medicines and Lower Costs for Americans

-

Full-Year 2026 Financial Outlook

-

Anticipates Worldwide Sales To Be Between $65.5 Billion and $67.0 Billion

-

Expects Non-GAAP EPS To Be Between $5.00 and $5.15; Outlook Reflects a One-Time Charge of Approximately $3.65 per Share for the Acquisition

of Cidara

-2-

RAHWAY,

N.J., Feb. 3, 2026 – Merck & Co., Inc., Rahway, N.J., USA (NYSE: MRK), known as MSD outside the United States and Canada,

today announced financial results for the fourth quarter and full year of 2025.

"In 2025, we continued to advance leading-edge

science to deliver transformative medicines and vaccines that are improving health outcomes for patients around the world,” said

Robert M. Davis, chairman and chief executive officer. "Our business benefited from demand for our innovative portfolio, including

for KEYTRUDA, increasing contributions from new launches in cardiometabolic and respiratory as well as vaccines, and strong performance

of Animal Health. The transformation of our portfolio, bolstered by the acquisitions of Verona Pharma and Cidara Therapeutics, is well

underway, and momentum is building as we continue to execute on our strategy. Our progress positions us to continue delivering on our

purpose for patients and creating durable value for shareholders.”

Financial Summary

Fourth Quarter

Year Ended

$ in millions, except EPS amounts

Change

Change Ex-

Exchange

Change

Change Ex-

Exchange

Sales

$

$

5

%

4

%

$

$

1

%

2

%

GAAP net income1

%

%

7

%

9

%

Non-GAAP net income that excludes certain items1,2*

%

%

%

%

GAAP EPS

%

%

8

%

%

Non-GAAP EPS that excludes certain items2*

%

%

%

%

*Refer to table on page 9.

Generally

Accepted Accounting Principles (GAAP) earnings per share (EPS) assuming dilution was $1.19 for the fourth quarter and $7.28 for the full

year of 2025. Non-GAAP EPS was $2.04 for the fourth quarter and $8.98 for the full year of 2025. GAAP and non-GAAP EPS in the fourth

quarter of 2025 include a charge of $0.05 per share related to an agreement with Dr. Falk Pharma GmbH (Falk) pursuant to which the Company

secured the sole global rights to MK-8690. GAAP and non-GAAP EPS in the fourth quarter of 2024 include a charge of $0.23 per share related

to the execution of licensing agreements with LaNova Medicines Ltd. (acquired by Sino Pharmaceutical Limited) and Hansoh Pharma. GAAP

and non-GAAP EPS for the full years of 2025 and 2024 include charges of $0.20 and $1.28 per share, respectively, related to certain licensing

agreements and asset acquisitions.

1Net income attributable to the Company.

2The Company is providing certain 2025 and 2024 non-GAAP information that excludes certain items because of the nature of these items

and the impact they have on the analysis of underlying business performance and trends. Management believes that providing this information

enhances investors’ understanding of the Company’s results because management uses non-GAAP results to assess performance.

Management uses non-GAAP measures internally for planning and forecasting purposes and to measure the performance of the Company along

with other metrics. In addition, annual employee compensation, including senior management’s compensation, is derived in part using

a non-GAAP pretax income metric. This information should be considered in addition to, but not as a substitute for or superior to, information

prepared in accordance with GAAP. For a description of the non-GAAP adjustments, see Table 2a attached to this release.

-3-

Non-GAAP EPS excludes acquisition- and divestiture-related

costs, costs related to restructuring programs, and income and losses from investments in equity securities. Non-GAAP EPS in 2025 also

excludes a net tax benefit, which reflects a net benefit related to favorable audit reserve adjustments. Non-GAAP EPS in the fourth quarter

and full year of 2024 also exclude a benefit due to a reduction in reserves for unrecognized income tax benefits resulting from the expiration

of the statute of limitations for assessments related to certain federal tax return years.

Fourth-Quarter Sales Performance

The following table reflects sales of the Company’s

top products and significant performance drivers.

Fourth Quarter

$ in millions

Change

Change Ex-

Exchange

Commentary

Total Sales

$

$

5

%

4

%

Pharmaceutical

6

%

4

%

Increase primarily driven by growth in oncology as well as cardiometabolic and respiratory, partially offset by a decline in vaccines.

KEYTRUDA/KEYTRUDA QLEX

7

%

5

%

Growth driven by strong global uptake in earlier-stage indications, including triple-negative breast cancer (TNBC), non-small cell lung cancer (NSCLC), renal cell carcinoma, cervical and head and neck cancers, as well as continued global demand in metastatic indications, including urothelial, gastric and endometrial cancers. Sales growth was partially offset by timing of purchases in the U.S. Sales of KEYTRUDA QLEX were $35 million.

GARDASIL/GARDASIL 9

%

%

Decline primarily due to lower demand in China, as well as lower sales in Japan following the national catch-up immunization program, partially offset by higher sales in the U.S. and timing in certain international markets.

PROQUAD, M-M-R II and VARIVAX

4

%

3

%

Increase primarily reflects higher sales of PROQUAD, which largely resulted from both the replenishment of doses borrowed from the U.S. Centers for Disease Control and Prevention Pediatric Vaccine Stockpile and from higher demand in Europe, partially offset by lower demand for M-M-R II in certain international markets and lower demand for VARIVAX in the U.S.

-4-

JANUVIA/JANUMET

3

%

3

%

Growth driven by higher net pricing in the U.S., partially offset by lower demand in China as well as in most other international markets due to generic competition.

BRIDION

%

%

Growth primarily due to higher demand and net pricing in the U.S., partially offset by lower demand in several international markets due to ongoing generic competition.

WINREVAIR

%

%

Growth primarily reflects continued uptake in the U.S. and early launch uptake in certain international markets, partially offset by lower net pricing in the U.S. largely due to Medicare Part D redesign.

Lynparza*

7

%

4

%

Growth primarily due to higher demand in several international markets.

CAPVAXIVE

N/M

N/M

Growth largely due to continued uptake in the U.S.

PREVYMIS

%

%

Increase primarily due to higher demand in the U.S. as well as in most international markets, reflecting in part the launch of new indications.

Lenvima*

7

%

6

%

Increase due to higher sales in the U.S., primarily reflecting higher demand, partially offset by lower pricing.

WELIREG

%

%

Growth primarily due to higher demand in the U.S. and continued launch uptake in several international markets, partially offset by lower net pricing in the U.S.

OHTUVAYRE

-

-

-

Represents sales following the Company's Oct. 7, 2025 acquisition of Verona Pharma plc (Verona Pharma).

Animal Health

8

%

6

%

Growth primarily due to higher demand of livestock products.

Livestock

%

9

%

Growth primarily driven by higher demand across all species, as well as improved supply and new product launches.

Companion Animal

2

%

0

%

Growth from new product launches was partially offset by lower demand for other products in portfolio, reflecting a reduction in veterinary visits. Sales of BRAVECTO line of products were $222 million and $209 million in current and prior-year quarters, respectively, which represents an increase of 6%, or 5% excluding impact of foreign exchange.

Other Revenues**

%

%

Decline primarily due to unfavorable impact of revenue-hedging activities and lower revenue from third-party manufacturing arrangements.

*Alliance revenue for this product represents the

Company’s share of profits, which are product sales net of cost of sales and commercialization costs.

**Other revenues are

comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including

revenue-hedging activities.

N/M - Not meaningful.

-5-

Full-Year Sales Performance

The following table reflects sales of the Company’s

top products and significant performance drivers.

Year Ended

$ in millions

Change

Change Ex-

Exchange

Total Sales

$

$

1

%

2

%

Pharmaceutical

1

%

1

%

KEYTRUDA/KEYTRUDA QLEX

7

%

7

%

GARDASIL/GARDASIL 9

%

%

JANUVIA/JANUMET

%

%

PROQUAD, M-M-R II and VARIVAX

-1

%

-2

%

BRIDION

4

%

4

%

Lynparza*

%

%

WINREVAIR

N/M

N/M

Lenvima*

4

%

4

%

PREVYMIS

%

%

VAXNEUVANCE

2

%

1

%

CAPVAXIVE

N/M

N/M

WELIREG

%

%

ROTATEQ

-5

%

-5

%

Reblozyl*

%

%

LAGEVRIO

%

%

Simponi**

-

%

%

Animal Health

8

%

9

%

Livestock

%

%

Companion Animal

2

%

2

%

Other Revenues***

%

-6

%

*Alliance revenue for Lynparza and Lenvima represent

the Company’s share of profits, which are product sales net of cost of sales and commercialization costs. Alliance revenue for Reblozyl

represents royalties.

**Marketing rights in former territories of the

Company reverted to Johnson & Johnson on Oct. 1, 2024.

***Other revenues are comprised primarily of revenues

from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities.

N/M - Not meaningful.

In addition, Koselugo alliance revenue was $436

million for the full year of 2025 compared with $170 million for the full year of 2024. The increase was due to an amendment to the collaboration

agreement with AstraZeneca in 2025, which discontinued the provisions whereby the Company shared revenue and costs with AstraZeneca, and

revised the payment structure, resulting in the Company’s recognition of a $150 million upfront payment and $175 million of regulatory

milestones.

billion, representing growth of 1% both nominally and excluding the impact of foreign exchange. Sales growth was primarily driven by higher

sales in oncology, particularly KEYTRUDA and WELIREG, as well as increased alliance revenue from Koselugo (resulting from the amendment

to the collaboration agreement noted above), Reblozyl and Lynparza. Also contributing to sales growth were higher sales in the cardiometabolic

and respiratory franchise largely attributable to the ongoing launch of WINREVAIR, as well as the inclusion of OHTUVAYRE sales resulting

from the acquisition of Verona Pharma, which closed on Oct. 7, 2025. Growth in the diabetes franchise, largely attributable to higher

net pricing of JANUVIA in the U.S., also contributed to sales growth. Sales growth in 2025 was partially offset by lower sales in the

vaccines franchise reflecting lower sales of GARDASIL/GARDASIL 9, which were offset in part by the ongoing launch of CAPVAXIVE and the

U.S. launch of ENFLONSIA. Lower sales in the immunology franchise (due to the return of the marketing rights for Simponi and Remicade

in former Company territories to Johnson & Johnson on Oct. 1, 2024) and lower sales in the virology franchise (largely attributable

to LAGEVRIO) also offset Pharmaceutical sales growth in 2025.

-6-

Full-year 2025 Animal Health sales were $6.4 billion,

representing growth of 8%, or 9% excluding the impact of foreign exchange. Sales growth was primarily driven by the performance of Livestock

products across all species and new product launches in Companion Animal. Sales of the BRAVECTO line of products were $1.1 billion in

2025, representing growth of 1% both nominally and excluding the impact of foreign exchange.

Fourth-Quarter and Full-Year Expense and Related Information

The table below presents selected expense information.

$ in millions

GAAP

Acquisition-

and

Divestiture-

Related Costs3

Restructuring

Costs

(Income)

Loss From

Investments

in Equity

Securities

Non-

GAAP2

Cost of sales

$

$

$

$

-

$

Selling, general and administrative

2

-

Research and development

5

)

-

Restructuring costs

-

-

-

Other (income) expense, net

-

-

Cost of sales

$

$

$

$

-

$

Selling, general and administrative

-

Research and development

(1

)

-

Restructuring costs

-

-

-

Other (income) expense, net

)

-

5

3 Reflects expenses related to business combinations, including

the amortization of intangible assets, intangible asset impairment charges, and expense or income related to changes in the estimated

fair value measurement of liabilities for contingent consideration. Also includes integration, transaction and certain other costs associated

with acquisitions and divestitures, as well as amortization of intangible assets related to collaborations, licensing arrangements and

asset acquisitions, and recognition of fair value step-up to inventories for asset acquisitions.

-7-

$ in millions

GAAP

Acquisition-

and

Divestiture-

Related Costs3

Restructuring

Costs

(Income)

Loss From

Investments

in Equity

Securities

Non-

GAAP2

Cost of sales

$

$

$

$

-

$

Selling, general and administrative

3

-

Research and development

-

Restructuring costs

-

-

-

Other (income) expense, net

(3

)

-

)

Cost of sales

$

$

$

$

-

$

Selling, general and administrative

-

Research and development

1

-

Restructuring costs

-

-

-

Other (income) expense, net

)

)

-

GAAP Expense, EPS and Related Information

Gross margin was 66.2% for the fourth quarter of

2025 compared with 75.5% for the fourth quarter of 2024. Gross margin was 74.8% for the full year of 2025 compared with 76.3% for the

full year of 2024. The gross margin decline in both periods was primarily due to the unfavorable impacts of higher restructuring costs

(primarily related to the accelerated depreciation of manufacturing lines at two sites under the 2025 Restructuring Program), inventory

write-offs and amortization of intangible assets, as well as the recognition of inventory fair value step-up related to the Verona Pharma

acquisition, partially offset by the favorable impact of product mix.

Selling, general and administrative (SG&A)

expenses were $2.9 billion in the fourth quarter of 2025, an increase of 1% compared with the fourth quarter of 2024. The increase was

primarily due to higher administrative costs, partially offset by lower promotional costs. Full-year 2025 SG&A expenses were $10.7

billion, a decrease of 1% compared with the full year of 2024. The decrease was primarily due to lower restructuring and promotional costs,

partially offset by increased administrative costs.

Research and development (R&D) expenses were

$3.9 billion in the fourth quarter of 2025, a decrease of 15% compared with the fourth quarter of 2024. The decrease was primarily due

to lower charges for business development activity and a reduction to estimated contractual termination costs associated with restructuring

actions, partially offset by higher clinical development costs. R&D expenses were $15.8 billion for the full year of 2025, a decrease

of 12% compared with the full year of 2024. The decrease was primarily due to lower charges for business development activity, partially

offset by higher clinical development spending and higher restructuring costs.

Other (income) expense, net, was $432 million of

expense in the fourth quarter of 2025 compared with $126 million of expense in the fourth quarter of 2024 primarily due to higher net

interest expense, higher foreign exchange losses and increased net losses from investments in equity securities. Other (income) expense,

net, was $151 million of expense in the full year of 2025 compared with $24 million of income in the full year of 2024. The unfavorable

year-over-year change primarily reflects $170 million of income in 2024 related to the expansion of an existing development and commercialization

agreement with Daiichi Sankyo, as well as higher net interest expense and higher foreign exchange losses in 2025, partially offset by

higher net income from investments in equity securities in 2025.

-8-

The effective tax rate was 13.4% for the fourth

GAAP EPS was $1.19 for the fourth quarter of 2025

compared with $1.48 for the fourth quarter of 2024. The decrease was primarily driven by higher restructuring costs and amortization of

intangible assets, partially offset by favorability from lower charges for business development transactions, as well as operational strength

in the business driven in part by the benefits of the previously announced multiyear optimization initiative. GAAP EPS was $7.28 for the

full year of 2025 compared with $6.74 for the full year of 2024. The increase was primarily driven by favorability from lower charges

for business development transactions and operational strength in the business, partially offset by higher restructuring costs and amortization

of intangible assets.

Non-GAAP Expense, EPS and Related Information

Non-GAAP gross margin was 79.7% for the fourth

quarter of 2025 compared with 80.8% for the fourth quarter of 2024. The decrease was primarily due to higher inventory write-offs, partially

offset by the favorable impact of product mix. Non-GAAP gross margin was 81.5% for the full year of 2025 compared with 80.8% for the full

year of 2024. The increase was primarily due to the favorable impact of product mix, partially offset by higher inventory write-offs.

Non-GAAP SG&A expenses were $2.8 billion in

the fourth quarter of 2025, an increase of 1% compared with the fourth quarter of 2024. The increase was primarily due to higher administrative

costs, partially offset by lower promotional costs. Non-GAAP SG&A expenses were $10.6 billion for the full year of 2025, flat compared

with the full year of 2024 as lower promotional costs were largely offset by higher administrative costs.

Non-GAAP R&D expenses were $4.0 billion in

the fourth quarter of 2025, a decrease of 13% compared with the fourth quarter of 2024. Non-GAAP R&D expenses were $15.6 billion for

the full year of 2025, a decrease of 13% compared with the full year of 2024. The decrease in both periods was primarily due to lower

charges for business development activity, partially offset by higher clinical development costs.

Non-GAAP other (income) expense, net, was $226

million of expense in the fourth quarter of 2025 compared with $5 million of expense in the fourth quarter of 2024 primarily due to higher

net interest expense and higher foreign exchange losses. Non-GAAP other (income) expense, net, was $460 million of expense in the full

year of 2025 compared with $10 million of expense in the full year of 2024. The unfavorable year-over-year change primarily reflects $170

million of income in 2024 related to the expansion of an existing development and commercialization agreement with Daiichi Sankyo, as

well as higher net interest expense and higher foreign exchange losses in 2025.

-9-

The non-GAAP effective tax rate was 15.4% for the

Non-GAAP EPS was $2.04 for the fourth quarter of

2025 compared with $1.72 for the fourth quarter of 2024. Non-GAAP EPS was $8.98 for the full year of 2025 compared with $7.65 for the

full year of 2024. The increase in both periods was primarily driven by favorability from lower charges for business development transactions,

as well as operational strength in the business driven in part by the benefits of the previously announced multiyear optimization initiative.

A reconciliation of GAAP to non-GAAP net income

and EPS is provided in the table that follows.

Fourth Quarter

Year Ended

$ in millions, except EPS amounts

EPS

GAAP EPS

$

$

$

$

Difference

Non-GAAP EPS that excludes items listed below2

$

$

$

$

Net Income

GAAP net income1

$

$

$

$

Difference

Non-GAAP net income that excludes items listed below1,2

$

$

$

$

Excluded Items:

Acquisition- and divestiture-related costs3

$

$

$

$

Restructuring costs

Loss (income) from investments in equity securities

)

Decrease to net income before taxes

Estimated

income tax (benefit) expense4

)

)

)

)

Decrease to net income

$

$

$

$

4 Includes the estimated tax impacts on the reconciling

items based on applying the statutory rate of the originating territory of the non-GAAP adjustments for all periods presented. Amount

in the full year of 2025 also includes a $60 million net benefit, which reflects a net benefit related to favorable audit reserve adjustments.

Amounts in the fourth quarter and full year of 2024 also include a $260 million benefit and a $519 million benefit, respectively, due

to reductions in reserves for unrecognized income tax benefits resulting from the expiration of the statute of limitations for assessments

related to certain federal tax return years. The benefit recognized in the fourth quarter of 2024 relates to the 2020 federal tax return

year and the benefit for the full year of 2024 relates to both the 2020 and 2019 federal tax return years.

Pipeline and Portfolio Highlights

In 2025, the Company announced positive late-stage

trial results from 18 Phase 3 trials and began enrolling patients in 21 new Phase 3 studies evaluating multiple indications and therapeutic

areas, with approximately 80 Phase 3 studies currently underway.

Throughout the fourth quarter, the Company made

important progress to advance its broad, diverse pipeline, meeting significant regulatory and clinical milestones.

·

Oncology:

o

U.S. Food and Drug Administration (FDA) approved KEYTRUDA and KEYTRUDA QLEX, each in combination with Padcev, for the perioperative

treatment of adult patients with muscle-invasive bladder cancer (MIBC) who are ineligible for cisplatin-based chemotherapy based on Phase

§

Approvals represent the first PD-1 inhibitor plus antibody-drug conjugate (ADC) regimens for this patient population.

o

FDA awarded a priority review voucher under the Commissioner’s National Priority Voucher (CNPV) pilot program for sac-TMT, an

investigational anti-TROP2 ADC being developed in collaboration with Kelun-Biotech.

o

European Commission (EC) approved the subcutaneous route of administration and new pharmaceutical formulation of KEYTRUDA for use

across all KEYTRUDA indications for adult patients in Europe.

o

FDA accepted two supplemental Biologics License Applications (sBLAs) for KEYTRUDA and KEYTRUDA QLEX, each with Trodelvy, for the first-line

treatment of certain patients with PD-L1+ inoperable (unresectable) locally advanced or metastatic TNBC based on Phase 3 KEYNOTE-D19/ASCENT-04

trial.

§

FDA set Prescription Drug User Fee Act (PDUFA) dates in the second half of 2026 for these applications.

o

Announced positive topline results from Phase 3 KEYNOTE-B15 trial in patients with MIBC who are eligible for cisplatin-based chemotherapy

showing KEYTRUDA plus Padcev significantly improved event-free survival (EFS), overall survival (OS) and pathologic complete response

(pCR) rates versus neoadjuvant chemotherapy and surgery when given before and after surgery.

o

In collaboration with Moderna, Inc. (Moderna), announced median five-year follow-up data from Phase 2b KEYNOTE-942/mRNA-4157-P201

study for intismeran autogene, an investigational mRNA-based individualized neoantigen therapy, in combination with KEYTRUDA in patients

with high-risk melanoma (stage III/IV) following complete resection.

·

Infectious Diseases:

o

Announced positive topline results from the Phase 3 trial of the investigational, once-daily, oral, two-drug, single-tablet regimen

of doravirine/islatravir (DOR/ISL) for the treatment of adults with HIV-1 infection who had not previously received antiretroviral treatment

(treatment-naïve).

·

Cardiometabolic and Respiratory:

o

Presented new data at the American Heart Association Scientific Sessions 2025, including results from the Phase 3 CORALreef Lipids

and heterozygous familial hypercholesterolemia (HeFH) trials, demonstrating that enlicitide decanoate, an investigational, oral proprotein

convertase subtilisin/kexin type 9 (PCSK9) inhibitor being evaluated for the treatment of adults with hypercholesterolemia, significantly

reduced low-density lipoprotein cholesterol (LDL-C) with a safety profile comparable to placebo.

§

FDA awarded a priority review voucher under the CNPV pilot program for enlicitide decanoate.

o

In January 2026, EC approved an expanded indication for WINREVAIR, in combination with other pulmonary arterial hypertension (PAH)

therapies, for the treatment of PAH (Group 1 pulmonary hypertension) in adult patients with World Health Organization (WHO) Functional

Class II, III and IV based on Phase 3 ZENITH trial.

o

In February 2026, FDA accepted a new sBLA for WINREVAIR seeking approval to update the U.S. product label based on Phase 3 HYPERION

trial.

§

FDA set PDUFA date of September 21, 2026.

o

Announced that Phase 2, proof-of-concept CADENCE study evaluating WINREVAIR in adults for the treatment of combined post- and precapillary

pulmonary hypertension (CpcPH) due to heart failure with preserved ejection fraction (HFpEF) met its primary endpoint.

·

Business Development:

o

In 2026, completed acquisition of Cidara Therapeutics, Inc. (Cidara) for a total transaction value of approximately $9.2 billion.

§

Added MK-1406 (formerly CD388), an investigational long-acting, strain-agnostic antiviral agent designed to prevent influenza infection

in individuals at higher risk of complications, to the Company’s portfolio.

§

MK-1406 is currently being evaluated in the Phase 3 ANCHOR study.

o

Entered into strategic financing agreement with Blackstone Life Sciences to partially fund the development of sac-TMT in 2026.

o

Entered into an agreement with Falk for certain development and commercialization rights to MK-8690, an investigational anti-CD30

ligand monoclonal antibody.

Notable recent news releases on the Company’s

pipeline and portfolio are provided in the table that follows. Visit the News Releases section of the Company’s website to read

the releases.*

Oncology

FDA Approved KEYTRUDA and KEYTRUDA QLEX, Each With Padcev, as Perioperative Treatment for Adults With Cisplatin-Ineligible MIBC; Based on Results From Phase 3 KEYNOTE-905 Trial

EC Approved Subcutaneous Administration of KEYTRUDA for All Adult Indications Approved in EU; Based on Results From Phase 3 3475A-D77 Trial

KEYTRUDA Plus Padcev Significantly Improved EFS, OS and pCR Rates for Cisplatin-Eligible Patients With MIBC When Given Before and After Surgery; Based on Results From Phase 3 KEYNOTE-B15 Trial

The Company and Moderna Announced 5-Year Data for Intismeran Autogene in Combination With KEYTRUDA Demonstrated Sustained Improvement in the Primary Endpoint of Recurrence-Free Survival in Patients With High-Risk Stage III/IV Melanoma Following Complete Resection; Based on Follow-up Analysis From Phase 2b KEYNOTE-942/mRNA-4157-P201 Trial

The Company Initiated Phase 3 KANDLELIT-007 Trial Evaluating Calderasib (MK-1084),

an Investigational Oral KRAS G12C Inhibitor, in Combination With KEYTRUDA QLEX in Certain Patients With Advanced NSCLC

The Company Presented Data at the American Society of Hematology Annual Meeting 2025 That Showcased Continued Advancements in Hematology Pipeline and Novel Therapeutic Approaches

Vaccines and Infectious Diseases

The Company Announced Positive Topline Results From Pivotal Phase 3 Trial Evaluating Investigational, Once-Daily, Oral, Two-Drug, Single-Tablet Regimen of DOR/ISL in Treatment-Naïve Adults With HIV-1 Infection

Cardiometabolic and Respiratory

Enlicitide Decanoate Significantly Reduced LDL-C in Phase 3 CORALreef Lipids Trial

Enlicitide Decanoate Significantly Reduced LDL-C in Adults With HeFH in Phase 3 CORALreef HeFH Trial

WINREVAIR Met Primary Endpoint in Phase 2, Proof-Of-Concept CADENCE Study in Adults With CpcPH Due to HFpEF

Neuroscience

The Company Showcased Data for Alzheimer’s Disease Candidates MK-2214 and MK-1167 at Clinical Trials on Alzheimer’s Disease 2025

Animal Health

FDA Conditionally Approved EXZOLT CATTLE-CA1 for Prevention and Treatment of New World Screwworm (Cochliomyia Hominivorax) Larvae (Myiasis)

*References to the Company’s name in the above news release titles

have been modified for the purpose of this announcement.

U.S. Government Agreement

The

Company reached an agreement with the U.S. government that is intended to lower medicine costs for Americans. This agreement enables

the Company to continue its long-standing commitment to advancing breakthrough scientific discoveries for patients and helps ensure Americans

can access the medicines they need at lower costs. The voluntary agreement addresses all four components of the President’s

July letter.

Under the agreement, among other things, the Company

plans to provide key products through a direct-to-patient program at affordable prices for eligible patients in the U.S. In addition,

the Company reached an understanding with the U.S. Department of Commerce to delay Section 232 tariffs for three years, enabling the Company

to make investments in the U.S. to reshore manufacturing for American patients. The Company has committed more than $70 billion in capital

and R&D spending to strengthen U.S. production and innovation.

Full-Year 2026 Financial Outlook

The following table summarizes the Company’s

full-year financial outlook.

G1Sales*

G2Non-GAAP Gross margin2

Approximately 82%

Non-GAAP Operating expenses2**

G3Non-GAAP Other (income) expense, net2

Approximately $1.3 billion expense

G4Non-GAAP Effective tax rate2

Non-GAAP EPS2***

G5Share count (assuming dilution)

Approximately 2.48 billion

*The Company does not have any non-GAAP adjustments

to sales.

**Includes a one-time charge of approximately $9.0

billion associated with the acquisition of Cidara. Outlook does not assume any additional significant potential business development transactions.

***Includes a one-time charge of approximately $3.65

per share associated with the acquisition of Cidara.

The Company has not provided a reconciliation of

forward-looking non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other (income) expense, net, non-GAAP effective tax rate

and non-GAAP EPS to the most directly comparable GAAP measures, given it cannot predict with reasonable certainty the amounts necessary

for such a reconciliation, including intangible asset impairment charges, legal settlements, and income and losses from investments in

equity securities either owned directly or through ownership interests in investment funds, without unreasonable effort. These items are

inherently difficult to forecast and could have a significant impact on the Company’s future GAAP results.

The Company anticipates full-year 2026 sales to

be between $65.5 billion and $67.0 billion, including a positive impact from foreign exchange of approximately 1% at mid-January 2026

exchange rates.

The Company’s full-year non-GAAP effective

income tax rate is expected to be between 23.5% and 24.5% including the impact of the non-tax deductible one-time charge for the acquisition

of Cidara.

The Company expects full-year 2026 non-GAAP EPS

to be between $5.00 and $5.15, including a positive impact from foreign exchange of approximately $0.10 per share at mid-January 2026

exchange rates. This range includes a one-time charge of approximately $9.0 billion, or approximately $3.65 per share, as well as approximately

$0.30 per share of related financing and operational costs, related to the acquisition of Cidara. In 2025, non-GAAP EPS of $8.98 was negatively

impacted by one-time charges of $0.20 per share related to certain business development transactions.

Consistent with past practice, the financial outlook

does not assume additional significant potential business development transactions.

Non-GAAP EPS excludes acquisition- and divestiture-related

costs, costs related to restructuring programs, as well as income and losses from investments in equity securities.

Earnings Conference Call

Investors, journalists

and the general public may access a live audio webcast of the call on Tuesday, Feb. 3, at 9 a.m. ET via this weblink. A replay

of the webcast, along with the sales and earnings news release, supplemental financial disclosures and slides highlighting the results,

will be available on the Company’s website.

All participants may join the call by dialing (800)

About Our Company

At Merck & Co., Inc., Rahway, N.J., USA, known

as MSD outside of the United States and Canada, we are unified around our purpose: We use the power of leading-edge science to save and

improve lives around the world. For more than 130 years, we have brought hope to humanity through the development of important medicines

and vaccines. We aspire to be the premier research-intensive biopharmaceutical company in the world – and today, we are at the forefront

of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. We foster

a diverse and inclusive global workforce and operate responsibly every day to enable a safe, sustainable and healthy future for all people

and communities.

Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J.,

USA

This news release of Merck & Co., Inc., Rahway,

N.J., USA (the “Company”) includes “forward-looking statements” within the meaning of the safe harbor provisions

of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of

the Company’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to pipeline

candidates that the candidates will receive the necessary regulatory approvals or that they will prove to be commercially successful.

If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set

forth in the forward-looking statements.

Risks and uncertainties include but are not limited

to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations;

the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward

health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product

development, including obtaining regulatory approval; the Company’s ability to accurately predict future market conditions; manufacturing

difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the Company’s

patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory

actions.

The Company undertakes no obligation to publicly

update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could

cause results to differ materially from those described in the forward-looking statements can be found in the Company’s Annual Report

on Form 10-K for the year ended December 31, 2024 and the Company’s other filings with the Securities and Exchange Commission (SEC)

available at the SEC’s Internet site (www.sec.gov).

Appendix

Generic product names are provided below.

Pharmaceutical

BRIDION (sugammadex)

CAPVAXIVE (Pneumococcal 21-valent Conjugate Vaccine)

ENFLONSIA (clesrovimab-cfor)

GARDASIL (Human

Papillomavirus Quadrivalent [Types 6, 11, 16 and 18] Vaccine, Recombinant)

GARDASIL 9 (Human Papillomavirus 9-valent Vaccine, Recombinant)

JANUMET (sitagliptin and metformin HCl)

JANUVIA (sitagliptin)

KEYTRUDA (pembrolizumab)

KEYTRUDA QLEX (pembrolizumab and berahyaluronidase alfa-pmph)

LAGEVRIO (molnupiravir)

Lenvima (lenvatinib)

Lynparza (olaparib)

M-M-R II (Measles, Mumps and Rubella Virus Vaccine Live)

OHTUVAYRE (ensifentrine)

PREVYMIS (letermovir)

PROQUAD (Measles, Mumps, Rubella and Varicella Virus Vaccine Live)

Reblozyl (luspatercept-aamt)

ROTATEQ(Rotavirus Vaccine, Live, Oral, Pentavalent)

Simponi (golimumab)

VARIVAX (Varicella Virus Vaccine Live)

VAXNEUVANCE (Pneumococcal 15-valent Conjugate Vaccine)

WELIREG (belzutifan)

WINREVAIR (sotatercept-csrk)

Animal

Health

BRAVECTO (fluralaner)

###

Media Contacts:

Investor Contacts:

Michael Levey

Peter Dannenbaum

michael.levey@msd.com

John Cummins

Steven Graziano

john.cummins2@msd.com

MERCK & CO., INC., RAHWAY, N.J., USA

CONSOLIDATED STATEMENT OF INCOME - GAAP

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 1

GAAP

GAAP

% Change

Full Year

Full Year

% Change

Sales

$

$

5

%

$

$

1

%

Costs, Expenses and Other

Cost of sales

%

8

%

Selling, general and administrative

1

%

-1

%

Research and development

%

%

Restructuring costs

*

*

Other (income) expense, net

*

)

*

Income Before Taxes

%

6

%

Income Tax Provision

Net Income

%

7

%

Less: Net (Loss) Income Attributable to Noncontrolling Interests

(1

)

2

9

Net Income Attributable to Merck & Co., Inc., Rahway, N.J., USA

$

$

%

$

$

7

%

Earnings per Common Share Assuming Dilution

$

$

%

$

$

8

%

Average Shares Outstanding Assuming Dilution

Tax Rate

%

%

%

%

MERCK & CO., INC., RAHWAY, N.J., USA

FOURTH QUARTER AND FULL YEAR 2025 GAAP TO NON-GAAP RECONCILIATION

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2a

GAAP

Acquisition- and Divestiture-Related Costs (1)

Restructuring Costs (2)

(Income) Loss from

Investments in Equity

Securities

Certain Other Items

Adjustment Subtotal

Non-GAAP

Fourth Quarter

Cost of sales

$

$

Selling, general and administrative

2

Research and development

5

)

)

Restructuring costs

–

Other (income) expense, net

Income Before Taxes

)

)

)

)

Income Tax Provision (Benefit)

)(3)

)(3)

)(3)

)

Net Income

)

)

)

)

Net Income Attributable to Merck & Co., Inc., Rahway, N.J., USA

)

)

)

)

Earnings per Common Share Assuming Dilution

$

)

)

)

)

$

Tax Rate

%

%

Full Year

Cost of sales

$

$

Selling, general and administrative

3

Research and development

Restructuring costs

–

Other (income) expense, net

(3

)

)

)

Income Before Taxes

)

)

)

Income Tax Provision (Benefit)

)(3)

)(3)

(3)

)(4)

)

Net Income

)

)

)

Net Income Attributable to Merck & Co., Inc., Rahway, N.J., USA

)

)

)

Earnings per Common Share Assuming Dilution

$

)

)

)

$

Tax Rate

%

%

Only

the line items that are affected by non-GAAP adjustments are shown.

The Company is providing certain non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. Management believes that providing non-GAAP information enhances investors’ understanding of the Company’s results because management uses non-GAAP measures to assess performance. Management uses non-GAAP measures internally for planning and forecasting purposes and to measure the performance of the Company along with other metrics. In addition, annual employee compensation, including senior management’s compensation, is derived in part using a non-GAAP pretax income metric. The non-GAAP information presented should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP.

(1) Amounts

included in cost of sales for the fourth quarter and full year reflect expenses for the amortization of intangible assets, as well

as the recognition of fair value step-up of inventories related to the Verona Pharma acquisition. Cost of sales for the full year

also includes intangible asset impairment charges. For the full year, cost of sales reflects a benefit from a decrease in the

estimated fair value measurement of liabilities for contingent consideration. Amounts included in selling, general and

administrative expenses reflect integration, transaction and certain other costs related to acquisitions and divestitures. Amounts

included in research and development expenses reflect the amortization of intangible assets.

(2) Amounts primarily include employee separation costs, accelerated depreciation and asset impairment charges associated with facilities to be closed or divested, as well as contractual termination costs and related adjustments, associated with activities under the Company's formal restructuring programs.

(3) Represents the estimated tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments.

(4) Amount represents a net tax benefit, including a net benefit related to favorable audit reserve adjustments.

MERCK & CO., INC., RAHWAY, N.J.,

USA

FRANCHISE / KEY PRODUCT SALES

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3

4Q

Full Year

1Q

2Q

3Q

4Q

Full Year

1Q

2Q

3Q

4Q

Full Year

Nom %

Ex-Exch %

Nom %

Ex-Exch %

TOTAL SALES (1)

$

$

$

$

$

$

$

$

$

$

5

4

1

2

PHARMACEUTICAL

6

4

1

1

Oncology

Keytruda

6

5

7

7

Keytruda Qlex

5

-

-

-

-

Alliance Revenue – Lynparza (2)

7

4

Alliance Revenue – Lenvima (2)

7

6

4

4

Welireg

Alliance Revenue – Reblozyl (3)

Vaccines(4)

Gardasil/Gardasil 9

ProQuad/M-M-R II/Varivax

4

3

-1

-2

Vaxneuvance

2

1

Capvaxive

*

*

*

*

RotaTeq

-5

-5

Hospital Acute Care

Bridion

4

4

Prevymis

Zerbaxa

Dificid

Cardiometabolic & Respiratory

Winrevair

*

*

Alliance Revenue - Adempas/Verquvo (5)

Adempas(6)

9

9

6

Ohtuvayre

-

-

-

-

Virology

Lagevrio

Isentress/Isentress HD

Delstrigo

9

Pifeltro

6

4

5

4

Neuroscience

Belsomra

8

9

Immunology

Simponi

Remicade

Diabetes(7)

Januvia

Janumet

1

2

Other Pharmaceutical (8)

-6

-5

ANIMAL HEALTH

8

6

8

9

Livestock