Merck lifts 2026 profit outlook after Keytruda sales surge

Merck reported adjusted earnings of $2.49 per share for the third quarter, a figure that exceeded the $2.08 expected by analysts surveyed by LSEG. The pharmaceutical company raised its full-year 2026 adjusted profit forecast to a range of $2.77 to $2.82 per share, up from the previous projection of $2.66 to $2.76. The updated guidance accounts for a one-time charge of $400 million, or 12 cents per share, related to a licensing agreement with Chinese cancer drugmaker SciBrunch.

Total revenue for the quarter reached $18.09 billion, marking a 5% increase from the same period last year. This figure surpassed the $17.31 billion forecast. Merck also narrowed the lower end of its 2026 revenue outlook, which now stands at $66.8 billion to $67.3 billion, compared with an earlier range of $66.3 billion to $67.3 billion. Net income for the quarter was $5.07 billion, or $2.04 per share, down from $5.79 billion, or $2.32 per share, in the prior year.

Sales of Keytruda, the company’s leading cancer immunotherapy, generated $8.60 billion in the quarter. This total exceeded the $7.73 billion expected by analysts, according to StreetAccount. The revenue includes $830 million from Keytruda Qlex, an under-the-skin injection that launched in 2025. That amount was well above the $649 million projected by analysts and represented the product's best quarter to date.

Keytruda Qlex is central to Merck’s strategy to maintain market share as the original intravenous version faces generic competition after key patents begin expiring in 2028. The company aims to shift patients to the injectable version, which is considered more convenient. This transition is intended to sustain blockbuster sales for the franchise after the original drug loses exclusivity. Merck has also pursued a series of deals to offset the expected generic pressure.

Other newer products contributed to the quarter's performance. Winrevair, a treatment for a rare and deadly lung condition, generated $694 million in sales, a 93% increase from a year earlier. This figure also exceeded the $645 million anticipated by analysts.

The Gardasil vaccine, which protects against cancers caused by HPV, drew approximately $2 billion in sales. Demand in the United States was higher than expected, surpassing the $1.76 billion forecast. This rebound follows a difficult previous year in which Merck managed elevated inventory and weak demand in China.

Merck’s animal health business posted $1.68 billion in sales for the quarter, a figure that came in slightly below analyst estimates.