Merck & Co., Inc. (MRK): Business Model Canvas [Dec-2025 Updated]

You're looking to dissect the operational engine of Merck & Co., Inc. right now, and honestly, it's a fascinating case study in managing a blockbuster dependency. As an analyst who has spent years mapping these giants, I can tell you the 2025 picture is dominated by Keytruda, which is projected to account for roughly $32.2 billion of the company's total expected revenue between $64.5 billion and $65.0 billion this fiscal year. The critical tension, which you need to see clearly, is how they are aggressively funding the future-with Q2 2025 R&D spending hitting $4.0 billion-to build out the pipeline and manage the patent cliff risk that starts to bite after 2028. Below, we break down the full Business Model Canvas, showing exactly where the money flows, from strategic AI alliances to the high-touch sales force supporting oncology specialists.

Merck & Co., Inc. (MRK) - Canvas Business Model: Key Partnerships

You're looking at how Merck & Co., Inc. (MRK) extends its reach and capability through external relationships. These aren't just casual agreements; they are material financial and strategic anchors for the business model, especially as the company manages the patent cliff for its top-selling asset.

Strategic alliances for AI-driven drug discovery

Merck & Co., Inc. (MRK) integrates advanced computational methods into its research efforts, complementing internal capabilities. While the prompt mentions BenevolentAI and Exscientia, which have been associated with Merck KGaA, Merck & Co., Inc. (MRK) is heavily investing in the digital future of R&D.

• Merck & Co., Inc. (MRK) committed to dedicating more than $70 billion beginning in 2025 to expand domestic manufacturing and Research and Development (R&D).
• Research and development (R&D) expenses for the twelve months ending September 30, 2025, totaled $16.487B.
• Third Quarter (Q3) 2025 R&D expenses were $4.2 billion.

Co-development and commercialization deals with biotechs

Merck & Co., Inc. (MRK) has been active in focused acquisitions and licensing to bolster its pipeline, particularly in rare tumors and respiratory diseases, to offset upcoming patent expirations. These deals involve significant upfront payments and contingent milestones.

Academic and research institutions for early-stage pipeline development

The substantial R&D investment supports collaborations with academic centers and research foundations, which are crucial for early-stage target identification and validation. This spending is the financial engine behind those fundamental science relationships.

• Total R&D expenses for the nine months ending September 30, 2025, were approximately $16.487B (twelve months).
• The company is committing over $70 billion starting in 2025 to expand domestic R&D capabilities.

Global distributors and wholesalers for broad market access

Getting products to patients globally relies on a network of established logistics partners. These relationships ensure broad coverage across retail pharmacies, hospitals, and government channels.

Merck & Co., Inc. (MRK) products are provided to drug wholesalers, retailers, hospitals, government agencies, and other institutions. Key authorized distributors include:

• AmerisourceBergen Corporation
• Cardinal Health
• McKesson Drug / McKesson Medical Surgical Inc.
• Henry Schein, Inc.
• AndaMEDS (a division of Anda, Inc.) for vaccines

Collaboration with AstraZeneca on certain oncology assets

The co-development and commercialization agreement with AstraZeneca for Lynparza (olaparib) and selumetinib remains a key part of the oncology strategy. The partnership for Koselugo also continues to contribute financially.

• The original deal structure involved Merck & Co., Inc. (MRK) paying AstraZeneca up to $8.5 billion total consideration, including $1.6 billion upfront.
• For Koselugo, AstraZeneca books all sales and shares half of gross profits with Merck & Co., Inc. (MRK).
• Koselugo alliance revenue for Merck & Co., Inc. (MRK) in Q3 2025 was $214 million, compared to $39 million in Q3 2024.
• An amendment to the Koselugo agreement provided a benefit of approximately $0.09 per share to Merck & Co., Inc. (MRK)'s full-year 2025 non-GAAP EPS outlook.

Merck & Co., Inc. (MRK) - Canvas Business Model: Key Activities

You're looking at the engine room of Merck & Co., Inc., the core actions that translate science into revenue, especially as the company navigates the crucial period leading up to the 2028 Keytruda patent expiration. These activities are all about massive scale, intense scientific output, and strategic cost realignment.

Extensive Research and Development (R&D) in Oncology and Vaccines

Merck & Co., Inc.'s primary activity is the discovery and development of new medicines, with a heavy, necessary focus on oncology and vaccines to secure future revenue streams. The commitment here is substantial; for example, Research and Development (R&D) expenses hit $4.0 billion in the second quarter of 2025 alone, which was a 16% increase over the same period in 2024. To be fair, this spending is part of a larger, forward-looking capital allocation, as the company is pledging over $70 billion in new investments starting in 2025 to expand U.S. manufacturing and R&D capabilities. You can see this commitment in their pipeline, which features 18 late-stage therapies across oncology, immunology, and antivirals. Also, the collaboration with Moderna on the mRNA-4157 cancer vaccine shows a clear push into next-generation cancer treatments.

• R&D Expense (Q2 2025): $4.0 billion
• Recent 12-Month R&D Investment: Roughly $16.5 billion
• Pipeline Focus: Oncology, Immunology, Antivirals

Managing a Global Supply Chain and High-Volume Manufacturing of Biologics

Moving a drug from the lab to the patient requires world-class manufacturing, especially for complex biologics like Keytruda. Merck & Co., Inc. is actively upgrading its footprint to support this. They are sinking $1.0 billion into a new Biologics Center of Excellence in Wilmington, Delaware, which is set to become the primary U.S. manufacturing site for Keytruda. Plus, they announced an $895-million expansion for their animal-health manufacturing facility in De Soto, Kansas, to increase capacity for biologic products there. This focus on aligning manufacturing geography to customers is a key operational activity right now.

Conducting Large-Scale, Multi-Indication Clinical Trials for Keytruda

The commercial success of Keytruda is directly tied to the sheer volume and breadth of its clinical trial program, which supports its use across multiple cancer types and treatment settings. Keytruda is definitely the foundation therapy; it generated $8.0 billion in sales in Q2 2025 and $8.1 billion in Q3 2025. For the first nine months of 2025, Keytruda sales reached $23.3 billion, and analysts projected 2025 global sales to hit the $28 to $30 billion band. A concrete example of trial execution is the recent FDA approval for Keytruda in locally advanced HNSCC, based on the Phase 3 KEYNOTE-689 trial. Anyway, the company is also advancing trials for its next wave, like the Phase 3 trial for the mRNA-4157 vaccine combination, which projects completion in October 2029.

Commercialization and Marketing of Blockbuster Drugs Globally

Effective commercialization is what turns R&D success into shareholder value. Merck & Co., Inc. maintains commercial operations in over 140 countries, driving the sales of its key products. The company's full fiscal year 2025 worldwide sales guidance is set between $64.5 billion and $65.0 billion, showing confidence in its global marketing reach despite near-term pressures on other products like Gardasil. The activity here is about maximizing the remaining patent life of Keytruda through expanded indications and lifecycle management, such as launching the subcutaneous formulation expected in 2025.

Executing the $3.0 Billion Multiyear Optimization and Restructuring Plan

To fund future growth and offset the eventual revenue drop from Keytruda's patent cliff, Merck & Co., Inc. is executing a major operational overhaul. This multiyear optimization plan, launched in July 2025, targets $3.0 billion in annual cost savings by the end of 2027. The restructuring program itself involves cumulative pretax costs of approximately $3.0 billion, with $649 million recorded in Q2 2025. This effort includes eliminating approximately 6,000 jobs globally across administrative, sales, and R&D roles, though the company is simultaneously hiring into strategic growth areas. The goal is to realize $1.7 billion of those annual savings by the end of 2027, with all savings being fully reinvested.

Here's a quick look at the scale of the financial activities underpinning this strategy:

Finance: draft 13-week cash view by Friday.

Merck & Co., Inc. (MRK) - Canvas Business Model: Key Resources

You're looking at the core assets that power Merck & Co., Inc.'s current valuation and future strategy. Honestly, when one drug drives over half of your pharma sales, that asset becomes the single most important resource, but the company is actively building around it.

Keytruda (pembrolizumab), the dominant immuno-oncology asset.

Keytruda is the engine room. For the third quarter of 2025, Keytruda sales hit $8.1 billion, marking a 10% growth year-over-year. Looking at the first nine months of 2025, the drug recorded sales of $23.3 billion, which is an 8% increase from the prior year period. This single therapy accounts for more than 50% of Merck & Co., Inc.'s total pharmaceutical sales. A key strategic move to extend this asset's life was the FDA approval in September 2025 of the subcutaneous formulation, Keytruda Qlex, which carries its own patent protection beyond the main drug's exclusivity date.

Here's a quick look at the revenue contribution from Keytruda across recent quarters and the looming patent risk:

A deep R&D pipeline with 18 late-stage investigational therapies.

Merck & Co., Inc. is actively working to offset the future revenue erosion from Keytruda's patent cliff. The pipeline is deep, with 30+ programs currently in Phase 3 development as of November 3, 2025. This late-stage focus spans multiple therapeutic areas, including oncology, neurology, and immunology.

• Keytruda (pembrolizumab), the dominant immuno-oncology asset.
• A deep R&D pipeline with 30+ programs in Phase 3 development as of November 3, 2025.
• Global manufacturing network, including the $1.0 billion biologics center in Wilmington.
• Patents and intellectual property protecting key drugs until 2028 and beyond.
• Specialized scientific talent in immunology and virology, supported by a $3.0 billion cost-saving initiative to be reinvested by the end of 2027.

Global manufacturing network, including the $1.0 billion biologics center in Wilmington.

You see a clear commitment to U.S. manufacturing capacity. Merck & Co., Inc. broke ground on the $1 billion, 470,000-square-foot Merck Wilmington Biotech facility in Delaware. This site is specifically slated to become the future U.S. home for producing Keytruda. The laboratory component there is expected to be operational by 2028, with production starting by 2030. This Wilmington investment is part of a larger plan to invest $3.5 billion in U.S. biologics and small molecule manufacturing capabilities. Also, the company completed construction on a $1 billion, 225,000-square-foot vaccine production facility in Durham, North Carolina.

Patents and intellectual property protecting key drugs until 2028 and beyond.

The primary intellectual property asset, Keytruda, faces its U.S. patent expiration around 2028. Historical data suggests that once patents lapse, biologics can see sales erosion between 30% to 70% in the first year. To mitigate this, the company is relying on the newer subcutaneous formulation, Keytruda Qlex, which has patent protection extending past 2028. Furthermore, the vaccine Gardasil also faces potential patent protection loss around 2028.

Specialized scientific talent in immunology and virology.

The focus on pipeline advancement requires top-tier human capital. To fund this, Merck & Co., Inc. announced a multi-year optimization initiative to save $3.0 billion annually by the end of 2027, with those savings being fully reinvested into strategic growth areas, which inherently includes R&D and talent acquisition/retention. The pipeline itself shows active development in areas like Alzheimer's disease, with candidates like MK-2214 receiving Fast Track Designation from the FDA. The company is also developing novel modalities, such as mRNA-based individualized neoantigen therapy (V940) in collaboration with Moderna.

Merck & Co., Inc. (MRK) - Canvas Business Model: Value Propositions

Merck & Co., Inc. delivers value through a portfolio anchored by oncology breakthroughs, essential preventive measures, and growth from newer specialized treatments, all supported by a stable animal health business.

Life-extending therapy through Keytruda, a foundation in oncology.

The continued success of the PD-1 blocking antibody, Keytruda (pembrolizumab), is central to Merck & Co., Inc.'s value proposition. In the third quarter of 2025, sales for Keytruda rose 10% year-over-year, reaching $8.1 billion for the quarter, surpassing the $8 billion mark for the first time in a single quarter. This performance is driven by robust demand across metastatic indications and increased uptake in earlier-stage cancers.

Preventive health solutions via the Gardasil/Gardasil 9 vaccine portfolio.

Merck & Co., Inc. offers preventive health through the Gardasil/Gardasil 9 vaccine portfolio, which protects against cancer-causing human papillomavirus (HPV) infections. However, this segment faced near-term headwinds in late 2025. Gardasil/Gardasil 9 sales declined 24% in the third quarter of 2025, reporting $1.7 billion in revenue. This was primarily due to a temporary pause in shipments to China to allow channel inventory to reduce, with the full-year 2025 contribution from China expected to be less than $1 billion at the high end of guidance.

New treatments for rare diseases, such as the recently launched Winrevair.

The company is expanding its portfolio with new product launches that address significant unmet needs. Winrevair, a treatment for pulmonary arterial hypertension (PAH), demonstrated rapid uptake. Global sales for Winrevair reached $360 million in the third quarter of 2025, representing a 141% growth rate both nominally and excluding foreign exchange impacts. Cumulative net sales for Winrevair already exceeded $1 billion within 15 months of its launch as of the second quarter of 2025. Merck & Co., Inc. projects a peak sales potential of $3 billion for Winrevair.

The following table summarizes the key product performance figures from the third quarter of 2025:

High-quality, reliable supply of essential medicines and animal health products.

Merck & Co., Inc. maintains a reliable supply chain, evidenced by consistent growth in its Animal Health segment. This segment posted sales of $1.6 billion in the third quarter of 2025, marking an 9% increase year-over-year. For context, the full-year 2024 Animal Health Revenue was $5.877 billion. The company's overall 2025 financial outlook, narrowed in October 2025, projects total worldwide sales between $64.5 billion and $65.0 billion.

Expanding subcutaneous (SC) delivery options, like Keytruda QLEX Injection.

To enhance patient experience and provider efficiency, Merck & Co., Inc. is expanding delivery options for its foundational oncology product. The FDA approved KEYTRUDA QLEX (pembrolizumab and berahyaluronidase alfa-pmph) injection for subcutaneous use across most solid tumor indications in September 2025. This new formulation allows for administration by a health care provider in as little as one minute every three weeks or two minutes every six weeks, compared to the intravenous infusion time.

Merck & Co., Inc. (MRK) - Canvas Business Model: Customer Relationships

You're looking at how Merck & Co., Inc. manages its critical relationships with prescribers, payers, and patients as of late 2025. The approach is highly specialized, given the complexity of their portfolio, especially in oncology.

High-touch, specialized medical science liaison support for oncology providers.

Merck & Co., Inc. Medical Science Liaisons (MSLs) focus on communicating complex scientific data, particularly for specialty areas like oncology, where the need for clear medical and scientific data is high among prescribers. The deployment of MSLs is a key strategy to bridge communication between clinical development and commercial success. While specific 2025 global MSL budget data for Merck & Co., Inc. isn't public, industry benchmarks for Top 20 pharmaceutical firms historically showed spending between $10 million and $48 million to deploy MSLs across the US, Europe, and Asia. Merck & Co., Inc. presented new research across more than 25 types of cancer at the 2025 American Society of Clinical Oncology Annual Meeting. The company received FDA approval for KEYTRUDA QLEX Injection for subcutaneous use across all solid tumor indications, which impacts how providers interact with the product.

The scale of the commercial effort supporting these relationships is suggested by the revenue figures; for example, KEYTRUDA sales were $8.1 billion in the third quarter of 2025. Selling, general and administrative (SG&A) expenses for Merck & Co., Inc. were $2.6 billion in the third quarter of 2025.

The relationship strategy with healthcare practitioners includes:

• Providing high-quality scientific engagement with healthcare professionals in key launch markets.
• Involving scientific opinion leaders in corporate medical activities.
• Delivering scientific information to drive evidence-based decision-making.

Direct negotiation with Pharmacy Benefit Managers (PBMs) and governments.

Negotiations with Pharmacy Benefit Managers (PBMs) and government entities are crucial, especially as KEYTRUDA, accounting for nearly half of Merck & Co., Inc.'s revenue, faces loss of exclusivity in 2028. Merck & Co., Inc. is dedicating significant resources to understand the implications of the Most Favored Nation (MFN) proposal, which could affect international pricing structures. The company's total worldwide sales for the third quarter of 2025 were $17.3 billion.

Key financial context influencing payer negotiations in 2025:

Patient assistance programs for high-cost specialty drugs.

Merck & Co., Inc. maintains patient support options, including the Merck Patient Assistance Program, Inc., which provides certain medicines and adult vaccines free of charge to eligible individuals in the U.S. who lack insurance or whose insurance does not cover their prescription products. This program was created based on the belief that no one should go without needed medicines or vaccines. For eligible, privately-insured patients, select Merck brands offer coupons to save on out-of-pocket costs. The principal executive offices are located at 126 East Lincoln Avenue, Rahway, N.J. 07065 U.S.A..

The patient support structure involves:

• Merck Patient Assistance Program for free medicines/vaccines for the uninsured/underinsured.
• Merck Access Program to help answer questions on insurance coverage and financial assistance options.
• Co-pay assistance for eligible patients.

Professional education and training for healthcare practitioners.

Education and scientific exchange are delivered through field teams and data dissemination. Merck & Co., Inc. announced new research across more than 25 types of cancer at the 2025 American Society of Clinical Oncology Annual Meeting. The MSL function is positioned to generate and disseminate complex scientific information to external stakeholders in a transparent and compliant manner. The company also supports humanitarian aid through the Merck Medical Outreach Program, donating pharmaceuticals and vaccines for aid in low- and middle-income countries.

Finance: draft 13-week cash view by Friday.

Merck & Co., Inc. (MRK) - Canvas Business Model: Channels

You're looking at how Merck & Co., Inc. gets its products to the people who need them, which is a massive logistical and sales undertaking. Here's the breakdown of the primary channels they use, grounded in the latest available 2025 figures.

The reach of Merck & Co., Inc. is global, relying on a multi-pronged approach that combines direct engagement with institutional customers and broad distribution networks.

• Global sales force targeting hospitals, clinics, and specialists.
• Wholesalers and distributors for pharmaceutical and vaccine delivery.
• Direct-to-consumer (DTC) advertising for select products in the U.S.
• Veterinary clinics and distributors for the Animal Health segment.

For the human pharmaceutical side, the scale of promotional and selling activities is significant, as reflected in the Selling, General and Administrative (SG&A) expenses. Selling, general and administrative (SG&A) expenses were $2.6 billion in the third quarter of 2025. This supports the global sales force engaging directly with healthcare providers.

The Direct-to-Consumer (DTC) channel in the U.S. is a major component for driving patient demand for certain prescription products. Here's what the advertising spend suggests about the intensity of this channel:

The Animal Health segment utilizes a distinct set of channels focused on veterinary professionals and livestock producers. The revenue generated through these channels gives you a sense of the segment's scale in 2025.

Here are the reported sales figures for the Animal Health segment through its distribution channels:

• Q1 2025 Animal Health Sales: $1.6 billion (5% growth nominally).
• Q2 2025 Animal Health Sales: $1.6 billion (11% growth nominally).
• Q3 2025 Animal Health Sales: $1.6 billion (9% growth nominally).

To put the overall scale of Merck & Co., Inc.'s business into perspective, the full-year 2025 worldwide sales are expected to be between $64.5 billion and $65.0 billion.

Merck & Co., Inc. (MRK) - Canvas Business Model: Customer Segments

You're looking at the core groups Merck & Co., Inc. serves, which really dictates how they structure their commercial teams and R&D focus. As of late 2025, the business is heavily weighted toward high-value specialty pharmaceuticals, but the other segments remain critical for diversification and public health impact. The company projects total worldwide sales for the full year 2025 to be between $64.5 Billion and $65.0 Billion.

The customer base is clearly segmented by therapeutic area and end-user type. Here's a breakdown of the key segments Merck & Co., Inc. targets:

• Oncology specialists and hospitals treating multiple tumor types. This is the engine room, driven almost entirely by the continued expansion of KEYTRUDA (pembrolizumab).
• Pediatricians and public health organizations for vaccine administration. This segment is focused on routine immunization schedules and public health threats, though it faces recent headwinds.
• Managed care organizations and government payers (Medicare/Medicaid). These entities are the ultimate gatekeepers for formulary access and reimbursement across all prescription products.
• Livestock producers and companion animal owners (Animal Health). This division serves the veterinary and agricultural markets globally.

The revenue contribution from these segments in the third quarter of 2025 gives you a clear picture of where the focus lies. For instance, the Oncology segment, anchored by KEYTRUDA, is the clear revenue leader. In Q3 2025, KEYTRUDA sales alone hit $8.1 Billion, marking a 10% nominal increase year-over-year. This drug accounted for nearly half of Merck & Co., Inc.'s pharmaceutical revenue in 2024, reaching $29.482 Billion. Analysts project KEYTRUDA revenue to land in the $28 to $30 Billion band for the full year 2025. To support this, Merck & Co., Inc. is pushing hard into earlier lines of therapy; by 2025, about 25% of total KEYTRUDA revenue was expected to come from these early-phase settings.

The Animal Health division is a significant, growing customer base, serving both livestock producers and companion animal owners. In Q3 2025, Animal Health sales grew 9% nominally to reach $1.6 Billion. For the full year 2024, this segment generated $5.88 Billion in revenue. Insights from a global survey conducted for Merck & Co., Inc. in early 2025 involved 4,072 pet owners and 582 veterinarians across 15 countries, showing the scale of their engagement with companion animal owners. A key finding for this customer group in the U.S. is that two-thirds of veterinarians report most pet owners do not follow year-round flea/tick treatment plans.

Vaccines remain a core area, targeting pediatricians and public health bodies, though this segment saw significant pressure in 2025. GARDASIL/GARDASIL 9 sales in Q3 2025 were $1.7 Billion, a 24% drop year-over-year, partly due to lower demand in China and declines in U.S. uptake. Still, Merck & Co., Inc. held the largest share in the global pediatric vaccine market at 30.82% in 2023, when the market was valued at nearly $41.16 Billion. New products like CAPVAXIVE contributed $244 Million in Q3 2025 sales, and the RSV preventative Enflonsia added $360 Million.

The relationship with payers-Managed Care Organizations and government bodies like Medicare/Medicaid-is implicit across all segments but most visible in the vaccine segment's performance, where reimbursement policy changes directly impact uptake. For example, the decline in GARDASIL/GARDASIL 9 sales in Q3 2025 was also attributed to the expiration of a "catch-up" reimbursement program in Japan. The company's overall Pharmaceutical segment revenue in FY 2024 was $57.40 Billion.

Here's a quick look at the revenue snapshot for the major product-driven segments based on the latest available full-year and quarterly data:

The commercial organization must tailor its approach for each group. For oncology, it's about deep clinical data delivery to specialists and ensuring formulary inclusion for hospital systems. For vaccines, it involves working with public health bodies like the CDC and navigating payer coverage for childhood and adult immunization schedules. And for Animal Health, it means direct engagement with veterinarians and producers, often focusing on compliance and ease of administration, as shown by the survey data.

Merck & Co., Inc. (MRK) - Canvas Business Model: Cost Structure

You're looking at the expenses that power Merck & Co., Inc.'s engine, which, as you know, is heavily weighted toward innovation and global reach. The cost structure reflects this focus, with massive, ongoing investments in the pipeline.

High fixed costs for Research and Development (R&D) represent a foundational element of Merck & Co., Inc.'s spending. These costs are necessary to discover and develop the next generation of blockbusters. For the second quarter of 2025, GAAP Research and Development expenses reached $4.048 billion, which was a 16% increase compared to the second quarter of 2024. Non-GAAP R&D expenses for that same quarter were reported at $4.0 billion.

The nature of producing complex biologics means that significant manufacturing and inventory costs are unavoidable. These costs include maintaining specialized facilities and managing the supply chain for high-value products. For instance, GAAP Cost of Sales in the second quarter of 2025 stood at $3.557 billion. The gross margin for Q2 2025 was 77.5%, though this was partially offset by higher inventory write-offs.

Global commercialization requires substantial resources for Sales, General, and Administrative (SG&A) expenses. This covers everything from marketing to regulatory affairs across the globe. GAAP SG&A expenses in the second quarter of 2025 were $2.649 billion. Looking at the trailing twelve months ending September 30, 2025, the total SG&A expense was $10.697B.

Merck & Co., Inc. continues to use upfront payments for licensing and acquisition agreements to augment its pipeline quickly. These are direct costs of securing external innovation. The upfront payment for the license agreement with Jiangsu Hengrui Pharmaceuticals Co., Ltd. (Hengrui Pharma) was $200 million, recorded in the second quarter of 2025. This transaction also resulted in a charge of $0.07 per share included in the GAAP and non-GAAP EPS for Q2 2025.

To manage costs and redirect investment, the company initiated a major overhaul. This involves restructuring charges related to the cost optimization initiative. Merck & Co., Inc. announced a new 2025 Restructuring Program with estimated cumulative pretax charges of approximately $3.0 billion. In the second quarter of 2025 alone, the company recorded GAAP charges of $649 million related to this program, with GAAP Restructuring Costs for the quarter totaling $560 million.

Here's a quick look at the major expense components from the second quarter of 2025:

The restructuring program is designed to realize annual cost savings of approximately $1.7 billion by the end of 2027. This is part of a broader multiyear optimization initiative targeting $3.0 billion in annual cost savings by the same date.

You should also note the specific R&D charges factored into the full-year 2025 outlook:

• Milestone payment to LaNova for MK-2010 technology transfer: $300 million.
• Upfront payment for Hengrui Pharma license agreement: $200 million.

The full-year 2025 Non-GAAP Operating expenses outlook is between $25.9 billion and $26.4 billion.

Merck & Co., Inc. (MRK) - Canvas Business Model: Revenue Streams

You're looking at the core ways Merck & Co., Inc. brings in cash as of late 2025. It's a story dominated by one blockbuster drug, but supported by other key segments, even with some regional headwinds.

The pharmaceutical sales segment remains the powerhouse, primarily driven by the continued success of its immuno-oncology therapy. For the full fiscal year 2025, the projection for this segment, led by the flagship product, is set at $32.2 billion.

To give you a sense of the momentum, here are the recent quarterly figures for that key pharmaceutical revenue stream:

Vaccine sales, centered on Gardasil/Gardasil 9, show a more complex picture due to inventory management and weak demand in specific international markets. Despite this, the product still generates significant revenue.

Here's how the vaccine revenue has tracked:

• Sales for the first half of 2025 totaled $2.45 billion, a 48% year-over-year decline.
• Q3 2025 sales were reported at $1.7 billion.
• Q2 2025 sales were $1.1 billion.

The Animal Health product sales unit continues to act as a solid growth driver for Merck & Co., Inc., showing consistent quarterly increases, which helps balance the volatility in other areas. This segment also benefits from recent acquisitions, like the Elanco aqua business.

Animal Health quarterly performance:

• Q1 2025 sales reached $1.6 billion, a 5% increase.
• Q2 2025 sales were $1.6 billion, an 11% increase.
• Q3 2025 sales were $1.6 billion, a 9% increase.

The total company revenue expectation for the full fiscal year 2025 has been refined, landing in a tight range. Merck & Co., Inc. now projects total company revenue for FY 2025 to be between $64.5 billion and $65.0 billion.

Also contributing to the top line is collaboration and licensing revenue from strategic partnerships. While a specific full-year number isn't always isolated, the Q1 2025 results noted higher payments received for out-licensing arrangements and royalties, showing this stream is active. The Q3 filing also details an 'Alliance revenue' component, which represents the Company's share of profits from those partnerships.

Finance: draft the Q4 2025 revenue reconciliation against the $64.5 billion to $65.0 billion guidance by next Tuesday.