Merck raises 2026 profit forecast as Q3 sales climb 5%

Merck & Co., Inc. (MRK) raised its full-year 2026 non-GAAP earnings forecast and reported third-quarter sales of $18,085 million, up 5% from a year earlier, the company said in a press release issued Oct. 29.

Shares rose 1.9% in premarket trading as of 7:06 a.m. ET, from a regular-session close of $140.93.

Here's how the company did:

• Sales: $18,085 million vs. $17,276 million a year earlier
• GAAP EPS: $2.04 vs. $2.32 a year earlier
• Non-GAAP EPS: $2.49 vs. $2.58 a year earlier

Net income has swung sharply this year, from a profit of $2.96 billion in the fourth quarter of 2025 to a loss of $4.24 billion in the first quarter of 2026, according to its SEC filings.

2026 guidance

The company now expects full-year non-GAAP EPS of $2.77 to $2.82. That is up from the $2.66 to $2.76 range it gave in an Aug. 4 release.

The new range includes a one-time charge of $9.0 billion, or $3.62 per share, for the acquisition of Cidara Therapeutics, Inc. It also includes $5.7 billion, or $2.31 per share, for the acquisition of Terns Pharmaceuticals, Inc.

A one-time charge of 12 cents per share tied to a global license agreement with SciBrunch Therapeutics Co., Ltd. is included for the first time, the company said.

Full-year sales are now expected to be $66.8 billion to $67.3 billion, narrowed from $66.3 billion to $67.3 billion. The company said the sales figure includes a positive foreign exchange impact of about 1%.

The non-GAAP effective income tax rate is now expected to be 32.0% to 33.0%, down from 35.0% to 36.0%.

Sales by product

Keytruda and Keytruda Qlex sales were $8,601 million, up 6% from a year earlier. Sales of Keytruda Qlex were $830 million.

Winrevair sales were $694 million, up 93%, reflecting higher demand and wholesaler and specialty pharmacy purchasing patterns in the U.S.

Animal Health sales were $1,676 million, up 4%.

Charges and costs

GAAP research and development expenses were $4.5 billion, up 7% from a year earlier. The company said the increase was primarily due to a $400 million charge related to the SciBrunch license and higher clinical development spending.

Restructuring costs were $184 million, compared with $47 million a year earlier.

The gross margin was 72.9%, compared with 77.7% a year earlier, the company said.

Pipeline

The U.S. Food and Drug Administration accepted a Biologics License Application for sac-TMT in certain patients with endometrial cancer. The agency set a PDUFA date of June 15, 2027.

In the same quarter, the company voluntarily withdrew a Biologics License Application for ifinatamab deruxtecan in certain patients with small cell lung cancer, it said.

“Our science-led strategy is transforming our business,” said Robert M. Davis, chairman and chief executive officer. “I’m increasingly confident in our ability to deliver long-term value for patients and shareholders.”