Merck & Co – known as MSD outside of the US and Canada – has unveiled a new cost-cutting plan aimed at saving $3bn every year by the end of 2027.
The annual cost savings generated by the “multi-year optimisation initiative” will be “fully reinvested” to support new product launches and Merck’s pipeline across multiple therapeutic areas, the company said in its second-quarter 2025 financial results.
A new restructuring programme has been approved to support the initiative and will see the elimination of certain administrative, sales, and research and development positions.
Merck outlined that it will continue to hire employees into new roles across “strategic growth areas” of the business.
The company’s chief executive officer, Robert Davis, said the effort will “redirect investment and resources from more mature areas of [Merck’s] business to [its] burgeoning array of new growth drivers, further enable the transformation of [its] portfolio, and drive [its] 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,” Davis added.
In its latest quarterly report, Merck shared that its total worldwide sales were $15.8bn, marking a 2% decrease from its second-quarter 2024 results “both nominally and excluding the impact of foreign exchange”.
Sales of the company’s anti-PD-1 therapy Keytruda (pembrolizumab), which is approved to treat a range of cancers, grew by 9% to $8bn, and sales of its recently approved pulmonary arterial hypertension drug Winrevair (sotatercept) were $336m.
There was, however, a 55% dip in sales of its human papillomavirus (HPV) vaccines Gardasil and Gardasil 9, which the company said was “primarily due to lower demand in China”.
The announcement comes just three weeks after Merck said it would be expanding its respiratory diseases capabilities by acquiring Verona Pharma for approximately $10bn.
The deal will give Merck access to Ohtuvayre (ensifentrine), an inhaled therapy already approved by the US Food and Drug Administration as a maintenance treatment for adults with chronic obstructive pulmonary disease (COPD).
“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,” Davis said.