Merck on Thursday cut its third-quarter estimates and raised its adjusted profit outlook, as immunotherapy Keytruda, including its newer injectable drug, showed stronger-than-expected sales.
The pharmaceutical giant now expects adjusted earnings of between $2.77 and $2.82 per share. Its adjusted earnings outlook rose from a previous range of $2.66 to $2.76 per share. Current guidance includes a one-time charge of $400 million, or 12 cents per share, related to a licensing agreement with Chinese cancer drug maker SciBrunch.
Merck also lowered its 2026 revenue guidance, now expecting sales between $66.8 billion and $67.3 billion. That compares with the previous outlook of $66.3 billion to $67.3 billion.
The company has struck a deal as it races to offset generic competition for Keytruda after its key patent expires in 2028.
Merck is also positioning its new drug, Keytruda Qlex, as a cornerstone of its growth strategy. The goal is to switch patients from the original intravenous version to Qlex, which is considered a more convenient injection under the skin. This strategy allows the company to defend its market share and maintain the blockbuster sales of Keytruda beyond the exclusivity of the original version.
Keytruda had sales of $8.60 billion for the quarter, beating analysts’ expectations of $7.73 billion, according to StreetAccount. This includes sales of $830 million for Qlex – the highest seen in a quarter since its launch in 2025.
Analysts expected sales of $649 million, StreetAccount estimates said. The explosion quarter for the shot shows that it can be a multi-billion product per year.
Here’s what Merck reported for the third quarter compared to Wall Street expectations, based on a survey of analysts by LSEG:
- Earnings per share: $2.49 adjusted vs $2.08 expected
- result: $18.09 billion vs $17.31 billion expected
The company posted net income of $5.07 billion, or $2.04 per share, for the quarter. That compares with net income of $5.79 billion, or $2.32 per share, for the year-ago period.
Excluding acquisition and restructuring charges, Merck posted earnings of $2.49 per share for the third quarter.
Merck generated $18.09 billion in the quarter, up 5% from the same period a year earlier.
Beyond Keytruda, Merck’s newer products are also showing strong growth.
Winrevair, which is used to treat a rare and deadly lung condition, generated sales of $694 million for the quarter, up 93% from the same period last year. Analysts expected sales of $645 million.
Meanwhile, the Gardasil vaccine, which prevents cancer from HPV, a very common sexually transmitted infection, generated sales of about $2 billion due to higher demand in the US, which exceeded the $1.76 billion sales expected by analysts.
The strong earnings came after Merck last year struggled with high Gardasil inventories and weak demand for the vaccine in China.
Meanwhile, Merck’s animal health business posted $1.68 billion in the third quarter, which fell short of analysts’ estimates.