Merck Raises 2026 Profit Forecast as Keytruda Sales Beat Estimates

Merck & Co. raised its full-year 2026 adjusted earnings forecast on Thursday, October 29, after stronger-than-expected third-quarter results showed robust demand for its cancer treatment Keytruda and newer medicines. The pharmaceutical company reported $18.09 billion in revenue, exceeding Wall Street estimates as its injectable Keytruda Qlex recorded its strongest quarterly sales since launching in 2025.

Merck now expects adjusted earnings of $2.77 to $2.82 per share for 2026, up from its previous range of $2.66 to $2.76. According to the company's updated guidance, the forecast includes a one-time charge of $400 million, equivalent to 12 cents per share, related to a licensing agreement with Chinese cancer drugmaker SciBrunch.

The company also raised the lower end of its annual revenue forecast to $66.8 billion, while maintaining the upper end at $67.3 billion. Its previous revenue guidance ranged from $66.3 billion to $67.3 billion.

According to results reported by Merck and analyst estimates compiled by LSEG, third-quarter adjusted earnings reached $2.49 per share, surpassing expectations of $2.08. Revenue of $18.09 billion also exceeded the projected $17.31 billion and increased 5% from the same period a year earlier.

Merck's reported net income was $5.07 billion, or $2.04 per share, compared with $5.79 billion, or $2.32 per share, in the year-earlier quarter. Adjusted earnings excluded acquisition and restructuring costs.

Keytruda generated $8.60 billion in quarterly sales, exceeding analysts' estimate of $7.73 billion, according to StreetAccount. The total included $830 million from Keytruda Qlex, compared with an expected $649 million, marking the injectable formulation's highest quarterly sales since its 2025 launch.

The newer formulation is administered under the skin rather than through an intravenous infusion. Merck aims to transition patients from the original version to Qlex as part of its strategy to maintain Keytruda's commercial performance when key patents begin expiring in 2028.

The latest results indicate that Qlex is approaching the $1 billion quarterly-sales milestone associated with blockbuster medicines. Merck is expanding its portfolio and pursuing deals to help offset anticipated generic competition as Keytruda's patent protections begin to expire.

Outside its leading cancer medicine, Merck reported stronger sales of Winrevair, a treatment for a rare and potentially fatal lung condition. The drug generated $694 million in third-quarter revenue, a 93% increase from a year earlier and above analysts' estimate of $645 million.

Gardasil, the company's vaccine against cancers caused by human papillomavirus, generated approximately $2 billion in sales. The result exceeded analysts' expectations of $1.76 billion, supported by stronger demand in the United States.

The improvement follows a period in which Merck faced elevated Gardasil inventory levels and weak demand in China. The latest figures indicate a stronger quarterly performance for the vaccine than analysts had anticipated.

Merck's animal health division recorded $1.68 billion in third-quarter sales, slightly below analysts' expectations. The division's performance contrasted with stronger-than-expected results from Keytruda, Winrevair and Gardasil.