- Merck beat on both lines. Third-quarter adjusted EPS was $2.49 against $2.08 expected, a 41-cent beat (Lumida calculation), and revenue rose 5% to $18.09 billion versus the $17.31 billion estimate. The stock gained about 4.5%, according to CNBC’s live coverage.
- Keytruda’s new form is taking off. Total Keytruda sales were $8.60 billion versus $7.73 billion expected, including $830 million from the subcutaneous Qlex shot, its best quarter since its 2025 launch and $181 million above the $649 million estimate (Lumida calculation).
- Other franchises also beat. Lung-disease drug Winrevair rose 93% to $694 million versus $645 million expected, and the Gardasil HPV vaccine brought in about $2 billion on higher US demand, above the $1.76 billion forecast, while animal health sales of $1.68 billion were slightly below estimates.
- Guidance moved higher. Merck raised its adjusted profit outlook to $2.77 to $2.82 a share from $2.66 to $2.76, including a one-time $400 million, or 12-cent, charge tied to a licensing deal with China’s SciBrunch, and narrowed 2026 revenue guidance to $66.8 billion to $67.3 billion from $66.3 billion to $67.3 billion.
What Happened?
Merck reported Thursday morning. Net income was $5.07 billion, or $2.04 a share, compared with $5.79 billion, or $2.32 a share, a year earlier, while adjusted EPS excluding acquisition and restructuring costs was $2.49. The Gardasil rebound follows a year in which Merck struggled with elevated inventory and weak demand for the vaccine in China.
Why It Matters?
Keytruda is Merck’s biggest product, and key patents begin expiring in 2028, opening the door to generic competition. Strong early uptake of Qlex matters because shifting patients to the new form is part of Merck’s strategy to defend the franchise, and CNBC noted the shot could eventually become a multibillion-dollar product annually. Merck has also been on a deal spree to offset the coming revenue gap.
What’s Next?
Investors will track how quickly Qlex conversion continues and whether new launches such as Winrevair can scale before Keytruda generics arrive. More dealmaking is likely as Merck races to fill the gap, and the health care sector’s record run on Thursday adds momentum heading into the next set of pharma reports.
