Merck & Co. (MRK) shares plummeted over 10% in pre-market trading on Tuesday after the pharmaceutical giant issued disappointing guidance for fiscal 2025 and announced it would pause shipments of its blockbuster Gardasil vaccine to China through at least mid-year due to continued weak demand.

For 2025, Merck forecast adjusted earnings per share of $8.88 to $9.03, below analysts' average estimate of $9.02. Revenue is projected to be between $64.1 billion and $65.6 billion, trailing the consensus forecast of $67.31 billion. The company cited a negative impact from foreign exchange rates as well as the decision to halt Gardasil shipments to China as key factors weighing on the guidance.

Gardasil, which prevents cancers caused by human papillomavirus (HPV), has been one of Merck's top growth drivers. However, sales of the vaccine slowed significantly in China starting in the second quarter of 2024 due to economic issues and an anti-bribery campaign that disrupted business.

In the fourth quarter, Gardasil sales fell 17% year-over-year to $1.55 billion, missing estimates of around $1.8 billion. Merck said it would pause shipments of the vaccine to China from February through at least mid-year, reflecting the continued weak demand and elevated channel inventory levels in the country.

Despite the Gardasil struggles, Merck posted better-than-expected Q4 earnings of $1.72 per share, aided by strong sales of its cancer drug Keytruda, which rose 19% to $7.84 billion. However, the disappointing 2025 outlook overshadowed the quarterly beat, leading to the sharp sell-off in Merck shares.