Merck beat third-quarter estimates on Thursday and raised its adjusted profit outlook as its Keytruda immunotherapy, including a new injectable form of the drug, posted stronger-than-expected sales.
The pharmaceutical giant now expects adjusted earnings of between $2.77 and $2.82 per share. This adjusted earnings outlook is up from a previous range of $2.66 to $2.76 per share. The guidance now includes a one-time charge of $400 million, or 12 cents per share, related to its licensing deal with Chinese cancer drug maker SciBrunch.
Merck also reduced the low end of its 2026 revenue forecast, now expecting sales between $66.8 billion and $67.3 billion. This compares to a previous forecast of $66.3 billion to $67.3 billion.
The company has embarked on a deal spree as it struggles to offset generic competition for Keytruda after key patents expire in 2028.
Merck is also positioning the new form of the drug, Keytruda Qlex, as a cornerstone of its growth strategy. The goal is to transition patients from the original intravenous version to Qlex, considered a more convenient subcutaneous injection. This strategy allows the company to defend its market share and maintain the successful sales of Keytruda beyond the loss of exclusivity of the original version.
Keytruda had revenue of $8.60 billion for the quarter, beating the $7.73 billion expected by analysts, according to StreetAccount. This includes $830 million in sales for Qlex – the highest recorded in a quarter since its launch in 2025.
Analysts had expected revenue of $649 million, according to StreetAccount estimates. The record quarter for the shot suggests it could soon become a multibillion-dollar-a-year product.
Here’s what Merck reported for the third quarter compared to what Wall Street expected, based on a survey of analysts by LSEG:
- Earnings per share: $2.49 adjusted vs. $2.08 expected
- Income: $18.09 billion versus $17.31 billion expected
The company reported net income of $5.07 billion, or $2.04 per share, for the quarter. That compares to net income of $5.79 billion, or $2.32 per share, for the year-ago period.
Excluding acquisition and restructuring costs, Merck reported earnings of $2.49 per share for the third quarter.
Merck generated $18.09 billion in revenue for the quarter, up 5% from the same period a year earlier.
Beyond Keytruda, Merck’s new products also showed strong growth.
Winrevair, used to treat a rare and fatal lung disease, generated revenue of $694 million for the quarter, up 93% from the same period a year earlier. Analysts expected revenue of $645 million.
Meanwhile, the Gardasil vaccine, which prevents cancers caused by HPV, a very common sexually transmitted infection, has generated about $2 billion in sales due to higher demand in the United States. This exceeds the $1.76 billion in sales expected by analysts.
The strong earnings come after Merck struggled last year with high inventories of Gardasil and weak demand for the vaccine in China.
Meanwhile, Merck’s animal health business reported third-quarter revenue of $1.68 billion, slightly below analyst estimates.
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