Financial Highlights
-
Total Worldwide Sales Were $18.1 Billion (5% Growth; 4% Growth ex-FX)
KEYTRUDA/KEYTRUDA QLEX1 Sales Were $8.6 Billion (6% Growth; 6% Growth ex-FX); Includes KEYTRUDA QLEX Sales of $830 Million
WINREVAIR Sales Were $694 Million (93% Growth; 94% Growth ex-FX)
Animal Health Sales Were $1.7 Billion (4% Growth; 3% Growth ex-FX)
-
GAAP EPS Was $2.04; Non-GAAP EPS Was $2.49; GAAP and Non-GAAP EPS Include a One-Time Charge of $0.12 per Share Related to a Global License Agreement With SciBrunch
Pipeline & Portfolio Highlights
-
Presented First-Time Pivotal Data From Phase 3 Trials Across Robust Oncology Pipeline at ESMO Congress 2026, Including:
TroFuse-005 Trial Evaluating Sacituzumab Tirumotecan (sac-TMT) in Certain Patients With Advanced or Recurrent Endometrial Cancer; U.S. FDA Accepted for Priority Review a Biologics License Application Based on These Data
INTerpath-001 Trial Evaluating Intismeran Autogene Plus KEYTRUDA as Adjuvant Treatment for Patients With Resected Stage IIB-IV Melanoma, in Collaboration With Moderna
Announced Positive Phase 2b Results in Moderate to Severe Hidradenitis Suppurativa From Clinical Study of Investigational Immunology Candidate Tulisokibart
-
Presented One-Year Results From Phase 2b/3 BRUNELLO Trial Evaluating Remigromig in Adults With Diabetic Macular Edema
Full-Year 2026 Financial Outlook
-
Narrows and Raises the Midpoint of Worldwide Sales Range; Now Expects Sales To Be Between $66.8 Billion and $67.3 Billion
-
Narrows and Raises Expected Non-GAAP EPS Range To Be Between $2.77 and $2.82; Outlook Now Includes One-Time Charge of $0.12 per Share Related to the Global License Agreement With SciBrunch
October 29, 2026--RAHWAY, N.J.--(BUSINESS WIRE)-- Merck & Co., Inc., Rahway, N.J., USA (NYSE: MRK), known as MSD outside the United States and Canada, today announced financial results for the third quarter of 2026.
“Our science-led strategy is transforming our business,” said Robert M. Davis, chairman and chief executive officer. “The potentially practice-changing advances in oncology presented at last weekend’s ESMO meeting, including new data for our antibody-drug conjugate sac-TMT and the first Phase 3 validation of a therapeutic cancer vaccine, further clinically de-risk the substantial long-term opportunity of our late-phase pipeline. With positive momentum across multiple therapeutic areas, I’m increasingly confident in our ability to deliver long-term value for patients and shareholders.”
Financial Summary
|
$ in millions, except EPS amounts |
Third Quarter |
|||
|
2026 |
2025 |
Change |
Change Ex- |
|
|
Sales |
$18,085 |
$17,276 |
5% |
4% |
|
GAAP net income2 |
5,065 |
5,785 |
-12% |
-14% |
|
Non-GAAP net income that excludes certain items2,3* |
6,159 |
6,448 |
-4% |
-5% |
|
GAAP EPS |
2.04 |
2.32 |
-12% |
-13% |
|
Non-GAAP EPS that excludes certain items3* |
2.49 |
2.58 |
-3% |
-5% |
|
|
||||
|
*Refer to table on page 7. |
||||
For the third quarter of 2026, Generally Accepted Accounting Principles (GAAP) earnings per share (EPS) assuming dilution was $2.04 and non-GAAP EPS was $2.49. Both GAAP and non-GAAP EPS in the third quarter of 2026 include a one-time charge of $0.12 per share related to a global license agreement with SciBrunch Therapeutics Co., Ltd. (SciBrunch). Both GAAP and non-GAAP EPS in the third quarter of 2025 include a charge of $0.10 per share for a milestone payment to LaNova Medicines Ltd. (LaNova, acquired by Sino Biopharmaceutical Limited) associated with the technology transfer for MK-2010.
Non-GAAP EPS excludes acquisition- and divestiture-related costs and costs related to restructuring programs, as well as income and losses from investments in equity securities. Non-GAAP EPS in the third quarter of 2025 also excludes tax expense relating to audit reserve adjustments.
Year-to-date results can be found in the attached tables.
Third-Quarter Sales Performance
The following table reflects sales of the Company’s top products and significant performance drivers.
|
|
Third Quarter |
||||
|
$ in millions |
2026 |
2025 |
Change |
Change Ex- |
Commentary |
|
Total Sales |
$18,085 |
$17,276 |
5% |
4% |
|
|
Pharmaceutical |
16,268 |
15,611 |
4% |
4% |
Increase primarily driven by growth in KEYTRUDA/KEYTRUDA QLEX, WINREVAIR, GARDASIL/GARDASIL 9, WELIREG, ENFLONSIA and the inclusion of OHTUVAYRE sales. Growth benefited from the timing of purchases by approximately $550 million. Growth was partially offset by declines in BRIDION, JANUVIA/JANUMET and LAGEVRIO, as well as lower alliance revenue related to Koselugo. |
|
KEYTRUDA/ |
8,601 |
8,147 |
6% |
6% |
Growth primarily driven by strong global uptake in earlier-stage indications including triple-negative breast cancer, cervical cancer, head and neck cancer and bladder cancer, as well as higher global demand in metastatic indications, including urothelial cancer. Timing of wholesaler purchases unfavorably affected sales in the U.S. but was largely offset by a benefit from increased inventory in the channel. Sales of KEYTRUDA QLEX were $830 million. |
|
GARDASIL/ |
1,995 |
1,749 |
14% |
14% |
Increase primarily due to higher sales in the U.S. reflecting favorable public-sector purchasing patterns and higher net pricing. |
|
PROQUAD, M-M-R II and VARIVAX |
730 |
684 |
7% |
7% |
Increase primarily due to higher demand in certain European markets. |
|
WINREVAIR |
694 |
360 |
93% |
94% |
Growth primarily reflects higher demand and favorable wholesaler and specialty pharmacy purchasing patterns in the U.S., as well as launch uptake in certain international markets, particularly in Europe and Japan. |
|
JANUVIA/JANUMET |
380 |
624 |
-39% |
-39% |
Decline primarily driven by lower demand due to generic competition following loss of market exclusivity in the U.S. |
|
Lynparza* |
352 |
379 |
-7% |
-7% |
Decline primarily due to lower net pricing in the U.S. and lower demand and pricing in China. |
|
PREVYMIS |
347 |
266 |
30% |
31% |
Increase primarily due to higher demand globally. |
|
WELIREG |
307 |
196 |
56% |
58% |
Growth primarily driven by higher demand in the U.S. and continued launch uptake in international markets, particularly in Japan. |
|
Lenvima* |
287 |
258 |
11% |
11% |
Growth primarily due to higher demand in the U.S. |
|
CAPVAXIVE |
263 |
244 |
8% |
7% |
Increase primarily driven by launch uptake in several international markets, particularly in Asia Pacific and Europe, partially offset by lower sales in the U.S. reflecting lower adult pneumococcal vaccination rates and lower net pricing. |
|
ENFLONSIA |
187 |
79 |
138% |
136% |
Increase primarily driven by seasonal demand and associated inventory build in the U.S. and certain international markets. |
|
OHTUVAYRE |
184 |
- |
- |
- |
Product obtained as part of the Company's October 2025 acquisition of Verona Pharma plc. |
|
BRIDION |
144 |
439 |
-67% |
-67% |
Decline primarily driven by lower demand in the U.S. due to generic competition following loss of market exclusivity. |
|
LAGEVRIO |
17 |
138 |
-88% |
-88% |
Decline largely due to lower demand in Japan. |
|
Animal Health |
1,676 |
1,615 |
4% |
3% |
Growth attributable to both Livestock and Companion Animal product portfolios. |
|
Livestock |
1,048 |
1,023 |
2% |
2% |
Growth primarily driven by higher demand for poultry products. |
|
Companion Animal |
628 |
592 |
6% |
6% |
Growth largely driven by new product launches. Sales of BRAVECTO line of products were $264 million and $262 million in the current and prior-year quarters, respectively, which represents an increase of 1%, or flat excluding impact of foreign exchange. |
|
Other Revenues** |
141 |
50 |
185% |
-25% |
Increase primarily due to favorable impact of revenue-hedging activities, partially offset by lower revenue from third-party manufacturing arrangements. |
*Alliance revenue for this product represents the Company’s share of profits, which are product sales net of cost of sales and commercialization costs.
**Other revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities.
In addition, Koselugo alliance revenue was $13 million in the third quarter of 2026 compared with $214 million in the third quarter of 2025. The decrease was due to an amendment to the collaboration agreement with AstraZeneca in 2025, which discontinued the provisions whereby the Company shared revenue and costs with AstraZeneca, and revised the payment structure, resulting in the Company’s recognition of a $150 million upfront payment and a $50 million regulatory milestone in the third quarter of 2025.
Third-Quarter Expense and Related Information
The table below presents selected expense information.
|
$ in millions |
GAAP |
Acquisition- |
Restructuring |
(Income) |
Non- |
|
Third Quarter 2026 |
|||||
|
Cost of sales |
$4,892 |
$1,140 |
$396 |
$- |
$3,356 |
|
Selling, general and administrative |
2,886 |
24 |
- |
- |
2,862 |
|
Research and development |
4,537 |
3 |
1 |
- |
4,533 |
|
Restructuring costs |
184 |
- |
184 |
- |
- |
|
Other (income) expense, net |
27 |
- |
- |
(393) |
420 |
|
|
|
|
|
|
|
|
Third Quarter 2025 |
|
|
|
|
|
|
Cost of sales |
$3,855 |
$621 |
$110 |
$- |
$3,124 |
|
Selling, general and administrative |
2,633 |
34 |
- |
- |
2,599 |
|
Research and development |
4,234 |
4 |
233 |
- |
3,997 |
|
Restructuring costs |
47 |
- |
47 |
- |
- |
|
Other (income) expense, net |
(238) |
- |
- |
(344) |
106 |
Full-Year 2026 Financial Outlook
The following table summarizes the Company’s full-year financial outlook.
|
Full Year 2026 |
||
|
|
Updated |
Prior |
|
Sales* |
$66.8 billion to $67.3 billion |
$66.3 billion to $67.3 billion |
|
Non-GAAP Gross margin3 |
Approximately 81% |
Approximately 81% |
|
Non-GAAP Operating expenses3** |
$42.4 billion to $42.9 billion |
$42.0 billion to $42.7 billion |
|
Non-GAAP Other (income) expense, net3 |
Approximately $1.4 billion expense |
Approximately $1.4 billion expense |
|
Non-GAAP Effective income tax rate3 |
32.0% to 33.0% |
35.0% to 36.0% |
|
Non-GAAP EPS3*** |
$2.77 to $2.82 |
$2.66 to $2.76 |
|
Share count (assuming dilution) |
Approximately 2.48 billion |
Approximately 2.48 billion |
*The Company does not have any non-GAAP adjustments to sales.
**Includes one-time R&D charges of $9.0 billion for the acquisition of Cidara Therapeutics, Inc. (Cidara), $5.7 billion for the acquisition of Terns Pharmaceuticals, Inc. (Terns), and $400 million related to the global license agreement with SciBrunch. Outlook does not assume any additional significant potential business development transactions.
***Includes one-time charges of $3.62 per share for the acquisition of Cidara, $2.31 per share for the acquisition of Terns, and $0.12 per share related to the global license agreement with SciBrunch.
The Company has not provided a reconciliation of forward-looking non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other (income) expense, net, non-GAAP effective income tax rate and non-GAAP EPS to the most directly comparable GAAP measures, given it cannot predict with reasonable certainty the amounts necessary for such a reconciliation, including intangible asset impairment charges, legal settlements, and income and losses from investments in equity securities either owned directly or through ownership interests in investment funds, without unreasonable effort. These items are inherently difficult to forecast and could have a significant impact on the Company’s future GAAP results.
The Company now anticipates full-year 2026 sales to be between $66.8 billion and $67.3 billion, including a positive impact from foreign exchange of approximately 1% at mid-October 2026 exchange rates.
The Company now expects the full-year non-GAAP effective income tax rate to be between 32.0% and 33.0%, including the impact of the non-tax-deductible one-time charges for the acquisitions of Cidara and Terns.
The Company now expects full-year 2026 non-GAAP EPS to be between $2.77 and $2.82, including a positive impact from foreign exchange of approximately $0.15 per share at mid-October 2026 exchange rates. This range includes one-time charges of $9.0 billion, or $3.62 per share, related to the acquisition of Cidara; $5.7 billion, or $2.31 per share, related to the acquisition of Terns; and $400 million, or $0.12 per share, related to the global license agreement with SciBrunch. The charge related to SciBrunch was not previously included in the outlook. In 2025, non-GAAP EPS of $8.98 was negatively impacted by one-time charges of $0.20 per share in the aggregate related to certain business development transactions.
Consistent with past practice, the financial outlook does not assume additional significant potential business development transactions.
About Our Company
At Merck & Co., Inc., Rahway, N.J., USA, known as MSD outside of the United States and Canada, we are unified around our purpose: We use the power of leading-edge science to save and improve lives around the world. For more than 130 years, we have brought hope to humanity through the development of important medicines and vaccines. We aspire to be the premier research-intensive biopharmaceutical company in the world – and today, we are at the forefront of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. We foster a diverse and inclusive global workforce and operate responsibly every day to enable a safe, sustainable and healthy future for all people and communities.
1Available in some markets as KEYTRUDA SC.
2Net income attributable to the Company.
3 The Company is providing certain 2026 and 2025 non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. Management believes that providing this information enhances investors’ understanding of the Company’s results because management uses non-GAAP results to assess performance. Management uses non-GAAP measures internally for planning and forecasting purposes and to measure the performance of the Company along with other metrics. In addition, annual employee compensation, including senior management’s compensation, is derived in part using a non-GAAP pretax income metric. This information should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. For a description of the non-GAAP adjustments, see Table 2a attached to this release.
4Reflects expenses related to business combinations, including the amortization of intangible assets, intangible asset impairment charges, and expense or income related to changes in the estimated fair value measurement of liabilities for contingent consideration. Also includes integration, transaction and certain other costs associated with acquisitions and divestitures, as well as amortization of intangible assets related to collaborations, licensing arrangements and asset acquisitions, and recognition of fair value step-up to inventories for asset acquisitions.
5 Includes the estimated income tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments for all periods presented. Amount in the third quarter of 2025 also includes $86 million of tax expense relating to audit reserve adjustments.