“We continue to demonstrate strong momentum and expect durable underlying demand across our key pillars, including KEYTRUDA, GARDASIL and Animal Health.”

In context

“part of our ongoing collaboration with Moderna. As a reminder, our guidance does not assume additional significant potential business development transactions. We continue to assume other expense of approximately $500 million. We expect our full year tax rate to be approximately 14%. We assume 2.54 billion shares outstanding. Taken together, we have increased and narrowed our expected EPS range to $7.32 to $7.37, an increase of $0.05 at the midpoint. The operational momentum in our business would have led to an approximately $0.20 increase in our guidance. However, it is being partially offset by the option payments in Moderna and an incremental headwind from foreign exchange of nearly 1% using mid-October rates. Our guidance reflects confidence in the underlying strength of our business. We continue to demonstrate strong momentum and expect durable underlying demand across our key pillars, including KEYTRUDA, GARDASIL and Animal Health. As you consider your model, there are a few items to keep in mind. While we actively manage foreign exchange through our revenue hedging program, it continues to be a headwind to growth, particularly across products with a larger portion of international revenues, such as in our Animal Health business. The hedging program mitigates the impact of foreign exchange. And to the extent we continue to see foreign exchange headwinds recorded at the product level, we will see a benefit in other revenues. In addition, other revenue includes the supply sales to Organon. As you saw in our results, PNEUMOVAX23 is experiencing pressure, particularly in the U.S. as the market continues to shift towards newer adult pneumococcal conjugate vaccines. We remain committed to our capital allocation priorities”