Merck reported first-quarter results Thursday that beat expectations due to strong demand for its cancer immunotherapy drug Keytruda and some new products.
The pharmaceutical giant also trimmed its 2026 revenue outlook and raised its adjusted profit outlook, due in part to underlying business and foreign exchange tailwinds.
Merck expects 2026 sales to be between $65.8 billion and $67 billion, with the lower end of that range narrowing from $65.5 billion. The company also expects adjusted earnings to be between $5.04 and $5.16 per share, up from its previous forecast of $5 to $5.15 per share.
Merck swung to a loss in the quarter, but the company noted a charge of $3.62 per share related to its acquisition of Sidara Therapeutics, a biotechnology company developing a flu prevention drug.
Merck continues to buy up as it races to offset generic competition for several drugs, including type 2 diabetes drugs Januvia and Janumet later this year and Keytruda in 2028.
Here’s how Merck reported in the first quarter compared to Wall Street’s expectations, based on a survey of analysts by LSEG.
Loss per share: $1.28 adjusted vs. $1.51 expected Earnings: $16.29 billion vs. $15.82 billion expected
The company reported a net loss of $4.24 billion, or $1.72 per share, in the quarter. This compares to net income of $5.08 billion, or $2.01 per share, in the same period last year.
Excluding acquisition and restructuring costs, Merck posted a loss of $1.28 per share in the first quarter.
Merck had revenue of $16.29 billion in the quarter, an increase of 5% from the same period last year.
Keytruda, Winlever top expectations
Merck’s pharmaceutical division, which develops a wide range of drugs, posted revenue of $14.35 billion in the first quarter. This was a 5% increase compared to the same period last year.
Keytruda’s sales for the quarter were more than $8.03 billion, an increase of 12% from the same period last year. Analysts had expected sales of $7.78 billion, according to estimates from Street Accounts.
The company said the increase in sales of Keytruda was due in part to increased uptake of the drug for early-stage cancers and strong demand for the treatment of metastatic cancer that has spread to other parts of the body.
Keytruda, the more convenient injectable version that won approval last year, had first-quarter sales of $128 million. This form of Keytruda is key to Merck’s efforts to offset expected revenue losses as the drug’s original intravenous formulation goes off-patent.
Meanwhile, Merck’s new drug Winreair, used to treat a rare and fatal lung disease, had sales of $525 million in the quarter, an 88% increase from a year earlier.
Analysts had expected the drug to generate $487 million in profits, according to estimates from Street Accounts.
The drug’s growth, which first hit the market in mid-2024, reflects high uptake in the United States and early launch in some international markets.
Merck continues to struggle with sales of Gardasil, a vaccine that prevents cancer caused by HPV, the most common sexually transmitted disease in the United States.
Last February, Merck announced that it would stop shipping Gardasil to China starting that month. The company forecast that demand for vaccines in China will continue to be weak and sales in Japan and the United States will decline in the first quarter of 2026, due in part to “unfavorable purchasing patterns in the public sector.”
Gardasil’s revenue for the quarter was $1.07 billion, down 19% from the year-ago period. Still, it exceeded the $1.05 billion that analysts had expected, according to Street accounts.
Sales at Merck’s animal health division, which develops vaccines and medicines for dogs, cats and cattle, rose 13% from a year earlier to nearly $1.79 billion. The company said this reflects growing demand for livestock and companion animal products.
