Merck & Co. · Earnings release

Exhibit

-

1 -

News Release

Merck & Co., Inc., Rahway, N.J.,

USA Announces Second-Quarter 2025 Financial Results

-

Total Worldwide Sales Were $15.8 Billion, a Decrease of 2% From Second Quarter 2024 Both Nominally and Excluding the Impact of Foreign

Exchange

o

KEYTRUDA Sales Were $8.0 Billion, Growth of 9% Both Nominally and Excluding the Impact of Foreign Exchange

o

WINREVAIR Sales Were $336 Million

o

Animal Health Sales Were $1.6 Billion, Growth of 11% Both Nominally and Excluding the Impact of Foreign Exchange

o

GARDASIL/GARDASIL 9 Sales Were $1.1 Billion, a Decline of 55% Both Nominally and Excluding the Impact of Foreign Exchange

-

GAAP EPS Was $1.76; Non-GAAP EPS Was $2.13; GAAP and Non-GAAP EPS Include a Charge of $0.07 per Share for Closing of Hengrui Pharma

License Agreement

-

Announced Agreement To Acquire Verona Pharma and Its First-In-Class COPD Maintenance Treatment for Adults, Ohtuvayre®;1Transaction Expected To Close in Fourth Quarter 2025

-

Announced Positive Topline Results From First Two Phase 3 CORALreef Trials of Enlicitide Decanoate for Treatment of Adults With Hyperlipidemia

-

Received FDA Approval of ENFLONSIA for Prevention of RSV Lower Respiratory Tract Disease in Infants Born During or Entering Their

First RSV Season; CDC’s ACIP Recommended ENFLONSIA for Prevention of RSV in Infants Younger Than 8 Months of Age for Their First

RSV Season

-

Announced Multiyear Optimization Initiative Anticipated To Result in G1Approximately $3.0 Billion of Annual

Cost Savings by the End of 2027, To Be Fully Reinvested Into Strategic Growth Areas

-

Full-Year 2025 Financial Outlook

o

Narrows Expected Worldwide Sales Range To Be Between $64.3 Billion and $65.3 Billion

o

Narrows Expected Non-GAAP EPS Range To Be Between $8.87 and $8.97

o

Outlook Does Not Include Anticipated Impact of the Announced Acquisition of Verona Pharma

RAHWAY, N.J., July 29, 2025 – Merck & Co., Inc.,

Rahway, N.J., USA (NYSE: MRK), known as MSD outside the United States and Canada, today announced financial results for the second quarter

1 All trademarks are property of their respective owners.

- 2 -

"Earlier this month, we were pleased to announce

our pending acquisition of Verona Pharma, which augments our portfolio and pipeline and is another example of acting decisively when science

and value align,” said Robert M. Davis, chairman and chief executive officer. “Today, we announced a multiyear optimization

initiative that will redirect investment and resources from more mature areas of our business to our burgeoning array of new growth drivers,

further enable the transformation of our portfolio, and drive our next chapter of productive, innovation-driven growth. With these actions, I

am confident that we are well positioned to generate near- and long-term value for our shareholders and, most importantly, deliver for

our patients.”

Financial Summary

Second Quarter

$ in millions, except EPS amounts

Change

Change

Ex-Exchange

Sales

$

$

-2

%

-2

%

GAAP net income2

%

%

Non-GAAP net income that excludes certain items2,3*

-8

%

-6

%

GAAP EPS

%

%

Non-GAAP EPS that excludes certain items3*

-7

%

-5

%

*Refer to table on page 7.

For the second quarter of 2025, Generally Accepted

Accounting Principles (GAAP) earnings per share (EPS) assuming dilution was $1.76 and non-GAAP EPS was $2.13. GAAP and non-GAAP EPS in

the second quarter of 2025 include a charge of $0.07 per share for an upfront payment to Jiangsu Hengrui Pharmaceuticals Co., Ltd.

(Hengrui Pharma) upon closing of a license agreement. 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 the second quarter of 2025 also

excludes tax benefits primarily resulting from favorable audit adjustments. Non-GAAP EPS in the second quarter of 2024 also excludes a

tax 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 the 2019 federal tax return year.

Year-to-date results can be found in the attached

tables.

2 Net income attributable to the Company.

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 -

Second-Quarter Sales Performance

The following table reflects sales of the Company’s

top products and significant performance drivers.

Second Quarter

$ in millions

Change

Change

Ex-Exchange

Commentary

Total Sales

$

$

-2

%

-2

%

Pharmaceutical

-2

%

-3

%

Decline primarily due to vaccines and immunology, partially offset by growth in oncology and cardiology.

KEYTRUDA

9

%

9

%

Growth driven by continued strong global demand from metastatic indications, including bladder, endometrial and gastric cancers, and increased global uptake in earlier-stage indications, including triple-negative breast cancer, renal cell carcinoma (RCC) and cervical cancer, as well as non-small cell lung cancer in the U.S.

GARDASIL/GARDASIL 9

%

%

Decline primarily due to lower demand in China. Excluding China, sales declined 3%, or 4% excluding impact of foreign exchange, reflecting lower demand in Japan following a national catch-up immunization program, as well as timing of public-sector purchases in certain international markets. U.S. sales increased 2% in the quarter.

JANUVIA/JANUMET

-1

%

-

Decrease primarily attributable to lower demand in China, impacts of generic competition in most international markets, and lower demand in the U.S. due to competitive pressure, which were largely offset by higher net pricing in the U.S.

PROQUAD, M-M-R II and VARIVAX

-1

%

-2

%

Decrease primarily reflects lower U.S. sales due to unfavorable VARIVAX public-sector activity and M-M-R II private-sector buy-out, partially offset by partial replenishment of PROQUAD doses borrowed from the U.S. Centers for Disease Control and Prevention (CDC) Pediatric Vaccine Stockpile, and higher pricing.

BRIDION

1

%

1

%

Increase primarily due to higher demand in the U.S., partially offset by lower demand in most international markets due to ongoing generic competition.

Lynparza*

%

%

Growth primarily due to higher demand in the U.S. and certain international markets.

WINREVAIR

N/M

N/M

Growth reflects continued uptake since second-quarter 2024 launch in the U.S.

- 4 -

Second Quarter

$ in millions

Change

Change

Ex-Exchange

Commentary

Lenvima*

6

%

5

%

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

VAXNEUVANCE

%

%

Growth primarily due to favorable public-sector activity in the U.S. and increased demand in certain international markets, partially offset by lower demand in the U.S. and Japan due to competitive pressure.

PREVYMIS

%

%

Growth primarily due to higher demand in the U.S. and Europe, partially offset by lower demand in China due to generic competition.

WELIREG

%

%

Growth primarily driven by higher demand in the U.S. and early launch uptake in certain EU markets, partially offset by lower pricing in the U.S.

CAPVAXIVE

-

-

-

Represents continued uptake since third-quarter 2024 launch in the U.S.

SIMPONI

-

%

%

Marketing rights in former territories of the Company reverted to Johnson & Johnson on Oct. 1, 2024.

Animal Health

%

%

Growth primarily due to higher demand for Livestock products, as well as inclusion of sales from Elanco aqua business acquired in July 2024, higher pricing and improved supply.

Livestock

%

%

Growth primarily driven by higher demand across all species, as well as inclusion of sales from Elanco aqua business acquired in July 2024.

Companion Animal

6

%

6

%

Increase primarily driven by higher pricing. Sales of BRAVECTO were $335 million and $331 million in current and prior year quarters, respectively, which represents an increase of 1%, both nominally and excluding impact of foreign exchange.

Other Revenues**

%

-3

%

Primarily due to unfavorable impact of revenue-hedging activities.

*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 -

Second-Quarter Expense, EPS and Related Information

The table below presents selected expense information.

$ in millions

GAAP

Acquisition-

and

Divestiture-

Related Costs4

Restructuring

Costs

(Income)

Loss From

Investments

in Equity

Securities

Non-

GAAP3

Cost of sales

$

$

$

$

-

$

Selling, general and administrative

1

-

Research and development

3

-

Restructuring costs

-

-

-

Other (income) expense, net

(7

)

-

-

)

Cost of sales

$

$

$

$

-

$

Selling, general and administrative

-

Research and development

-

-

Restructuring costs

-

-

-

Other (income) expense, net

)

-

)

GAAP Expense, EPS and Related Information

Gross margin was 77.5% for the second quarter of

2025 compared with 76.8% for the second quarter of 2024. The increase was primarily due to the favorable impact of product mix, partially

offset by higher restructuring costs and inventory write-offs.

Selling, general and administrative (SG&A)

expenses were $2.6 billion in the second quarter of 2025, a decrease of 3% compared with the second quarter of 2024. The decrease was

primarily due to lower administrative, restructuring and promotional costs.

Research and development (R&D) expenses were

$4.0 billion in the second quarter of 2025, an increase of 16% compared with the second quarter of 2024. The increase was primarily due

to a $200 million charge for an upfront payment made in the second quarter of 2025 for a license agreement with Hengrui Pharma, increased

clinical development spending, higher compensation and benefit costs, and higher restructuring costs.

Other (income) expense, net, was $7 million of

income in the second quarter of 2025 compared with $42 million of expense in the second quarter of 2024.

The effective tax rate of 11.4% for the second

quarter of 2025 includes a 2.9 percentage point favorable impact due to tax benefits primarily resulting from favorable audit adjustments.

4 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 and licensing arrangements.

- 6 -

GAAP EPS was $1.76 for the second quarter of 2025

compared with $2.14 for the second quarter of 2024. The decrease reflects increased operating expenses driven by higher restructuring

costs and research and development spending, a charge related to the closing of a license agreement with Hengrui Pharma, unfavorable tax

impacts, and the unfavorable impact of foreign exchange.

Non-GAAP Expense, EPS and Related Information

Non-GAAP gross margin was 82.2% for the second

quarter of 2025 compared with 80.9% for the second quarter 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 $2.6 billion in

the second quarter of 2025, a decrease of 2% compared with the second quarter of 2024. The decrease was primarily due to lower administrative

and promotional costs.

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

the second quarter of 2025, an increase of 15% compared with the second quarter of 2024. The increase was primarily due to a $200 million

charge for an upfront payment made in the second quarter of 2025 for a license agreement with Hengrui Pharma, increased clinical development

spending, and higher compensation and benefit costs.

Non-GAAP other (income) expense, net, was $54 million

of expense in the second quarter of 2025 compared with $108 million of expense in the second quarter of 2024.

The non-GAAP effective tax rate was 15.0% for the

Non-GAAP EPS was $2.13 for the second quarter of

2025 compared with $2.28 for the second quarter of 2024. The decrease reflects increased operating expenses driven by higher research

and development spending, a charge related to the closing of a license agreement with Hengrui Pharma, and the unfavorable impact of foreign

exchange.

- 7 -

A reconciliation of GAAP to non-GAAP net income

and EPS is provided in the table that follows.

Second Quarter

$ in millions, except EPS amounts

EPS

GAAP EPS

$

$

Difference

Non-GAAP EPS that excludes items listed below3

$

$

Net Income

GAAP net income2

$

$

Difference

Non-GAAP net income that excludes items listed below2,3

$

$

Excluded Items:

Acquisition- and divestiture-related costs4

$

$

Restructuring costs

Income from investments in equity securities

)

)

Decrease to net income before taxes

Estimated income tax (benefit) expense5

)

)

Decrease to net income

$

$

Planned Acquisition of Verona Pharma

On July 9, 2025, the Company furthered its

science-led business development strategy by announcing an agreement under which the Company, through a subsidiary, will acquire Verona

Pharma plc (Verona Pharma) for $107 per American Depository Share, each of which represents eight Verona Pharma ordinary shares, for a

total transaction value of approximately $10 billion. Through the acquisition, the Company will add Ohtuvayre, a first-in-class selective

dual inhibitor of phosphodiesterase 3 and 4 (PDE3 and PDE4), to its growing cardio-pulmonary pipeline and portfolio.

The U.S. Food and Drug Administration (FDA) approved

Ohtuvayre in June 2024 for the maintenance treatment of chronic obstructive pulmonary disease (COPD) in adult patients. It is the

first novel inhaled mechanism for the treatment of COPD in more than 20 years. The transaction is anticipated to close in the fourth quarter

Pipeline and Portfolio Highlights

In the second quarter, the Company continued to

advance its broad and diverse pipeline with multiple regulatory and clinical milestones.

In oncology, the FDA approved KEYTRUDA as part

of a therapy regimen for the treatment of certain adult patients with resectable locally advanced head and neck squamous cell carcinoma

(HNSCC), based on results from the Phase 3 KEYNOTE-689 trial. This approval is the first perioperative anti-PD-1 treatment regimen for

adults with resectable locally advanced HNSCC whose tumors express PD-L1 (CPS ≥1). In addition, the Ministry of Health, Labor and Welfare

(MHLW) in Japan approved WELIREG as monotherapy for the treatment of adults with von Hippel-Lindau (VHL) disease-associated tumors, and

for adults with unresectable or metastatic RCC that has progressed after chemotherapy.

5 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 both periods presented. Amount

in the second quarter of 2025 also includes a $146 million benefit primarily resulting from favorable audit adjustments. Amount in the

second quarter of 2024 also includes a $259 million 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 the 2019 federal tax return year.

- 8 -

At the 2025 American Society of Clinical Oncology

Annual Meeting, the Company announced new research across more than 25 types of cancer in multiple treatment settings. Data were presented

for several candidates, including MK-1084, an investigational oral selective KRAS G12C inhibitor, and from the Company’s

pipeline of antibody-drug conjugates (ADCs). The Company also presented data from Phase 3 trials evaluating new combination regimens with

KEYTRUDA, and longer-term data for studies of KEYTRUDA and WELIREG, with the KEYTRUDA studies including people with earlier stages of

cancer.

The Company announced results from the Phase 3

KEYNOTE-B96 trial (also known as ENGOT-ov65) evaluating KEYTRUDA plus chemotherapy, which met its primary endpoint of progression-free

survival (PFS) for the treatment of patients with platinum-resistant recurrent ovarian cancer whose tumors express PD-L1 and in all comers,

as well as a secondary endpoint of overall survival (OS) in patients whose tumors express PD-L1. In addition, a pre-specified interim

analysis of the Phase 3 KEYNOTE-937 study found that compared to placebo, KEYTRUDA did not show a statistically significant improvement

in the primary endpoint of recurrence-free survival for certain patients with hepatocellular carcinoma. Also, a pre-specified interim

analysis of the Phase 3 LEAP-014 trial found that KEYTRUDA plus Lenvima, in combination with platinum-based chemotherapy, did not show

a statistically significant improvement in its primary endpoint of OS compared to KEYTRUDA plus chemotherapy for the first-line treatment

of patients with metastatic esophageal squamous cell carcinoma (ESCC).

In vaccines and infectious diseases, the Company

received FDA approval of ENFLONSIA for the prevention of respiratory syncytial virus (RSV) lower respiratory tract disease in newborns

and infants who are born during or entering their first RSV season. ENFLONSIA is the first and only RSV preventive option administered

to infants using the same dose regardless of weight. The CDC’s Advisory Committee on Immunization Practices (ACIP) also recommended

ENFLONSIA for the prevention of RSV in infants younger than 8 months of age born during or entering their first RSV season. In addition,

the Company announced initiation of the MOBILIZE-1 Phase 3 trial evaluating V181, an investigational single-dose quadrivalent vaccine

for the prevention of dengue disease.

In addition, the FDA accepted a New Drug Application

(NDA) for doravirine/islatravir, an investigational, once-daily, oral, two-drug regimen for the treatment of adults with virologically

suppressed HIV-1 based on the Phase 3 MK-8591A-051 and MK-8591A-052 trials. The FDA set a Prescription Drug User Fee Act (PDUFA) date

of April 28, 2026. The Company also announced the initiation of the EXPrESSIVE Phase 3 trials for MK-8527, its investigational once-monthly

oral candidate for HIV pre-exposure prophylaxis (PrEP).

- 9 -

In cardiovascular disease, the Company announced

positive topline results from Phase 3 CORALreef HeFH and CORALreef AddOn, the first two of three Phase 3 clinical trials evaluating the

safety and efficacy of enlicitide decanoate, an investigational, oral proprotein convertase subtilisin/kexin type 9 (PCSK9) inhibitor

being evaluated for the treatment of adults with hyperlipidemia already on lipid-lowering therapies, including at least a statin. In both

trials, enlicitide demonstrated statistically significant and clinically meaningful reductions in low-density lipoprotein cholesterol.

If approved, it would be the first marketed oral PCSK9 inhibitor.

In addition, the FDA granted priority review for

a new supplemental Biologics License Application for WINREVAIR seeking approval to update the U.S. product label based on compelling results

from the Phase 3 ZENITH trial. The FDA has set a PDUFA date of Oct. 25, 2025. The Company also provided an update on the Phase 3

HYPERION study evaluating WINREVAIR in recently diagnosed adults with pulmonary arterial hypertension (PAH). In the study, WINREVAIR added

on top of background therapy within 12 months after initial diagnosis of PAH demonstrated a statistically significant and clinically meaningful

reduction in the risk of clinical worsening events when compared to placebo. Further, the MHLW in Japan approved sotatercept for the treatment

of adults with PAH under the trademark AIRWIN. It is the first activin signaling inhibitor therapy for PAH approved in Japan.

In the Animal Health business, the FDA approved

BRAVECTO QUANTUM, an injectable formulation of BRAVECTO for dogs for the treatment and persistent killing of fleas and ticks. In addition,

the European Commission (EC) approved NUMELVI tablets for dogs, a once-daily, second-generation Janus kinase (JAK) inhibitor, indicated

for the treatment of pruritus associated with allergic dermatitis including atopic dermatitis and treatment of clinical manifestations

of atopic dermatitis.

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 for PD-L1+ Resectable Locally Advanced HNSCC as Neoadjuvant Treatment, Continued as Adjuvant Treatment Combined With Radiotherapy With or Without Cisplatin Then as a Single Agent; Based on Results From Phase 3 KEYNOTE-689 Trial

FDA Approved WELIREG for Treatment of Adults and Pediatric Patients 12 Years and Older With Locally Advanced, Unresectable, or Metastatic Pheochromocytoma or Paraganglioma; Based on Results From Phase 2 LITESPARK-015 Clinical Trial

Phase 3 KEYNOTE-B96 Trial Met Primary Endpoint of PFS in Patients With Platinum-Resistant Recurrent Ovarian Cancer Whose Tumors Expressed PD-L1 and in All Comers

KEYTRUDA Plus Trodelvy Reduced Risk of Disease Progression or Death by 35% Versus KEYTRUDA Plus Chemotherapy in First-Line PD-L1+ Metastatic Triple-Negative Breast Cancer; Based on Results From Phase 3 ASCENT-04/KEYNOTE-D19 Trial

MK-1084, an Investigational KRAS G12C Inhibitor, Showed Antitumor Activity in Phase 1 Trial of Patients With Advanced Colorectal Cancer and Non-Small Cell Lung Cancer Whose Tumors Harbor KRAS G12C Mutations

Investigational Zilovertamab Vedotin at 1.75 mg/kg Dose Plus Standard of Care Showed Promising Antitumor Activity, Including Complete Response Rate, in Patients With Relapsed/Refractory Diffuse Large B-Cell Lymphoma; Based on Results From Phase 2 WaveLINE-003 Trial

IDeate-Prostate01 Phase 3 Trial of Ifinatamab Deruxtecan Initiated in Patients With Pretreated Metastatic Castration-Resistant Prostate Cancer

IDeate-Esophageal01 Phase 3 Trial of Ifinatamab Deruxtecan Initiated in Certain Patients With Pretreated Advanced or Metastatic ESCC

Vaccines and Infectious Diseases

FDA Approved ENFLONSIA for Prevention of RSV Lower Respiratory Tract Disease in Infants Born During or Entering Their First RSV Season; Based on Results From Phase 2b/3 CLEVER Trial

ACIP Recommended Use of ENFLONSIA for Prevention of RSV Lower Respiratory Tract Disease in Infants Younger Than 8 Months of Age Born During or Entering Their First RSV Season

FDA Accepted NDA for Doravirine/Islatravir, an Investigational, Once-Daily, Oral, Two-Drug Regimen for Treatment of Adults With Virologically Suppressed HIV-1; Based on Results From Phase 3 MK-8591A-051 and MK-8591A-052 Trials; FDA Set PDUFA Date of April 28, 2026

EXPrESSIVE Phase 3 Trials Initiated for Investigational Once-Monthly HIV Prevention Pill, MK-8527

The Company Initiated MOBILIZE-1 Phase 3 Study Evaluating Dengue Vaccine Candidate

Cardiovascular

FDA Granted Priority Review for WINREVAIR to Update Label Based on Results From ZENITH Trial; FDA Set PDUFA Date of Oct. 25, 2025

The Company Announced Positive Topline Results From First Two Phase 3 CORALreef Trials Evaluating Enlicitide Decanoate for the Treatment of Adults With Hyperlipidemia

Phase 3 HYPERION Study of WINREVAIR Met Primary Endpoint in Recently Diagnosed Adults With PAH

Animal Health

FDA Approved BRAVECTO QUANTUM

EC Approved NUMELVI Tablets for Dogs

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

have been modified for the purpose of this announcement.

New Multiyear Optimization Initiative, Which Includes a Restructuring

Program

The Company launched a new multiyear optimization

initiative to enable the transformation of its portfolio by generating an expected $3.0 billion in annual cost savings from productivity

actions, which will be fully reinvested to support new product launches and its pipeline across multiple therapeutic areas.

In July 2025, as part of this initiative,

the Company approved a new restructuring program, in which it expects to eliminate certain administrative, sales and R&D positions.

The Company will, however, continue to hire employees into new roles across strategic growth areas of the business. In addition, the Company

will reduce its global real estate footprint and continue to optimize its manufacturing network, aligning the geography of its global

manufacturing to its customers and reflecting changes in the Company’s business.

The Company anticipates cumulative pretax costs

related to the program to be approximately $3.0 billion. For the second quarter of 2025, the Company recorded charges in its GAAP results

of $649 million related to this restructuring program.

The Company expects the actions under the restructuring

program to result in annual cost savings of approximately $1.7 billion, which will be substantially realized by the end of 2027. This

restructuring program is part of the multiyear optimization initiative expected to achieve $3.0 billion in annual cost savings by the

Manufacturing and R&D Investment

The Company continued to make long-term investments

in its U.S. manufacturing and R&D capabilities. This includes the start of construction for a $1.0 billion, 470,000-square-foot state-of-the-art

biologics center of excellence in Wilmington, Delaware, which will serve as a launch and commercial production facility and the primary

U.S. manufacturing site for KEYTRUDA. In addition, the Company announced an $895 million expansion of its Animal Health manufacturing

facility in De Soto, Kansas; the 200,000-square-foot facility will increase capacity for Animal Health vaccines and biologic products.

Full-Year 2025 Financial Outlook

The following table summarizes the Company’s

full-year financial outlook.

Updated

Prior

G2Sales*

G3Non-GAAP Gross margin3

Approximately 82%

Approximately 82%

G4Non-GAAP Operating expenses3**

G5Non-GAAP Other (income) expense, net3

G6Non-GAAP Effective tax rate3

G7Non-GAAP EPS3***

Share count (assuming dilution)

Approximately 2.51 billion

Approximately 2.51 billion

*The Company does not have any non-GAAP adjustments

to sales.

**Includes one-time R&D charges of $300 million

for a milestone payment to LaNova Medicines Ltd. (LaNova) associated with the technology transfer for MK-2010 expected to be recorded

in the third quarter of 2025 and $200 million for the upfront payment for the license agreement completed with Hengrui Pharma in the

Outlook does not assume any additional significant

potential business development transactions.

***Includes one-time charges totaling $0.16 per

share associated with the payment for the LaNova technology transfer for MK-2010 and upfront payment to Hengrui Pharma.

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 now expects full-year 2025 sales to

be between $64.3 billion and $65.3 billion, including a revised negative impact of foreign exchange of approximately 0.5% at mid-July 2025

exchange rates.

The Company now expects its full-year non-GAAP

effective income tax rate to be between 15.0% and 16.0%.

The Company now expects its full-year non-GAAP

EPS to be between $8.87 and $8.97, including a revised negative impact of foreign exchange of approximately $0.15 per share. This revised

non-GAAP EPS range continues to reflect the impacts of a one-time charge of $200 million (recorded in the second quarter of 2025) for

an upfront payment made in connection with the closing of a license agreement with Hengrui Pharma and the one-time charge of $300 million

(to be recorded in the third quarter of 2025) related to a payment to LaNova for the completion of the technology transfer for MK-2010,

which will impact EPS by approximately $0.16 in the aggregate. In 2024, non-GAAP EPS of $7.65 was negatively impacted by a net charge

of $1.28 per share related to certain asset acquisitions, licensing agreements and collaborations.

The financial outlook does not include the anticipated

impact of the announced acquisition of Verona Pharma.

Consistent with past practice, the financial outlook

does not assume additional significant potential business development transactions.

The $200 million of costs previously included in

the Company’s financial outlook related to the impact of tariffs is unchanged pending the outcome of additional potential government

actions.

Earnings Conference Call

Investors,

journalists and the general public may access a live audio webcast of the call on Tuesday, July 29, 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)

Lenvima (lenvatinib)

Lynparza (olaparib)

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

PREVYMIS (letermovir)

PROQUAD (Measles, Mumps, Rubella and Varicella Virus Vaccine

Live)

SIMPONI (golimumab)

VARIVAX (Varicella Virus Vaccine Live)

VAXNEUVANCE (Pneumococcal 15-valent Conjugate Vaccine)

WELIREG (belzutifan)

WINREVAIR (sotatercept-csrk)

Animal Health

BRAVECTO (fluralaner)

BRAVECTO QUANTUM (fluralaner for extended-release injectable

suspension)

NUMELVI (atinvicitinib)

###

Media Contacts:

Investor Contacts:

Michael Levey

michael.levey@msd.com

Johanna Herrmann

johanna.herrmann@msd.com

Peter Dannenbaum

Steven Graziano

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

% Change

Sales

$

$

-2

%

$

$

-2

%

Costs, Expenses and Other

Cost of sales

-5

%

-4

%

Selling, general and administrative

-3

%

0

%

Research and development

%

2

%

Restructuring costs

*

*

Other (income) expense, net

(7

)

*

)

*

Income Before Taxes

%

-7

%

Income Tax Provision

Net Income

%

-7

%

Less: Net Income Attributable to Noncontrolling Interests

1

6

8

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

$

$

%

$

$

-7

%

Earnings per Common Share Assuming Dilution

$

$

%

$

$

-6

%

Average Shares Outstanding Assuming Dilution

Tax Rate

%

%

%

%

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

THREE AND SIX MONTHS ENDED JUNE 30, 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

Second Quarter

Cost of sales

$

$

Selling, general and administrative

1

Research and development

3

Restructuring costs

–

Other (income) expense, net

(7

)

)

)

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

%

%

June YTD

Cost of sales

$

$

Selling, general and administrative

1

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 reflect expenses for the amortization of intangible assets and intangible asset impairment charges, partially offset by 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 impairments associated with facilities to be closed or divested related to 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) Represents tax benefits primarily resulting from favorable audit adjustments.

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

FRANCHISE / KEY PRODUCT SALES

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3

2Q

June YTD

1Q

2Q

June YTD

1Q

2Q

June YTD

3Q

4Q

Full Year

Nom %

Ex-Exch %

Nom %

Ex-Exch %

TOTAL SALES (1)

$

$

$

$

$

$

$

$

$

-2

-2

-2

0

PHARMACEUTICAL

-2

-3

-3

-2

Oncology

Keytruda

9

9

7

8

Alliance Revenue – Lynparza (2)

Alliance Revenue – Lenvima (2)

6

5

4

4

Welireg

Alliance Revenue – Reblozyl (3)

Vaccines(4)

Gardasil/Gardasil 9

ProQuad/M-M-R II/Varivax

-1

-2

-3

-3

Vaxneuvance

RotaTeq

-8

-7

Capvaxive

-

-

-

-

Hospital Acute Care

Bridion

1

1

1

1

Prevymis

Dificid

5

5

8

9

Zerbaxa

Cardiovascular

Winrevair

*

*

*

*

Alliance Revenue - Adempas/Verquvo (5)

Adempas(6)

6

4

4

Virology

Lagevrio

Isentress/Isentress HD

-3

-4

Delstrigo

Pifeltro

5

4

6

6

Neuroscience

Belsomra

-9

-8

Immunology

Simponi

Remicade

Diabetes(7)

Januvia

-8

-8

Janumet

5

8

Other Pharmaceutical (8)

-6

-7

5

6

ANIMAL HEALTH

8

Livestock

Companion Animal

6

6

3

4

Other Revenues (9)

-3

7

or greater

Sum

of quarterly amounts may not equal year-to-date amounts due to rounding.

(1)Only select products are shown.

(2)Alliance Revenue represents the Company's share of profits, which are product sales net of cost of sales and commercialization costs.

(3)Alliance Revenue represents royalties.

(4)Total Vaccines sales were $2,607 million and $2,370 million in the first and second quarter of 2025, respectively, and $3,424 million

and $3,656 million in the first and second quarter of 2024, respectively.

(5)Alliance Revenue represents the Company's share of profits from sales in Bayer's marketing territories, which are product sales net of

cost of sales and commercialization costs.

(6)Net product sales in the Company's marketing territories.

(7)Total Diabetes sales were $876 million and $704 million in the first and second quarter of 2025, respectively, and $745 million and $715

million in the first and second quarter of 2024.

(8)Includes Pharmaceutical products not individually shown above.

(9)Other Revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues,

including revenue-hedging activities. Other Revenues related to the receipt of upfront and milestone payments for out-licensed products

were $95 million and $5 million in the first and second quarter of 2025, respectively, and $61 million and $15 million in the first and

second quarter of 2024, respectively.