Merck exceeded third-quarter expectations and raised its adjusted profit outlook, driven largely by robust sales of its immunotherapy drug, Keytruda. The company’s adjusted earnings are now projected to range between $2.77 and $2.82 per share, an increase from a prior estimate of $2.66 to $2.76 per share. This guidance incorporates a one-time charge of $400 million, or 12 cents per share, linked to a licensing agreement with the Chinese cancer drugmaker, SciBrunch.
Merck also narrowed its revenue expectations for 2026 to between $66.8 billion and $67.3 billion, compared to the earlier forecast of $66.3 billion to $67.3 billion. As Keytruda faces generic competition post-2028, Merck is actively pursuing deals to strengthen its portfolio. A key aspect of its strategy includes promoting a new form of Keytruda, called Qlex, aimed at providing a more convenient under-the-skin injection for patients.
For the quarter, Keytruda generated sales of $8.60 billion, significantly surpassing the $7.73 billion anticipated by analysts. Notably, Qlex contributed $830 million to these sales, exceeding expectations of $649 million, indicating strong potential for the product to become a multibillion-dollar item annually.
Merck’s financial performance included adjusted earnings of $2.49 per share against an expected $2.08, with total revenue of $18.09 billion compared to the forecast of $17.31 billion. However, net income fell to $5.07 billion, or $2.04 per share, from $5.79 billion, or $2.32 per share, in the same quarter of the previous year. Newly launched products also performed well; Winrevair sales reached $694 million, a 93% increase year-over-year, while the Gardasil vaccine brought in approximately $2 billion, surpassing analyst expectations.
– Why this story matters: Merck’s performance signals its resilience amid impending generic competition for Keytruda.
– Key takeaway: The introduction of Qlex is a critical part of Merck’s strategy to maintain market share.
– Opposing viewpoint: Some analysts express concern over Merck’s reliance on Keytruda amid impending patent expirations.
