Merck on Tuesday reported fourth-quarter earnings and income that topped estimates on sturdy demand for its most cancers immunotherapy Keytruda and a few newer merchandise.
However the firm posted a modest 2026 outlook that fell wanting Wall Avenue’s expectations because it prepares for just a few medication to lose patent safety later this 12 months and face generic competitors. That features Sort 2 diabetes medication, Januvia and Janumet, and Bridion, a therapy that helps restore muscle operate that was blocked throughout surgical procedure.
Whereas these medicines aren’t top-selling merchandise like Keytruda, their mixed decrease gross sales will seemingly stress the corporate.
The pharmaceutical big anticipates its 2026 income will are available in between $65.5 billion and $67 billion. Analysts anticipated income of $67.6 billion, in accordance with LSEG.
Merck additionally expects adjusted earnings to be between $5 and $5.15 per share. That compares with analysts’ estimate of $5.36 per share, in accordance with LSEG.
That vary features a one-time cost of roughly $9 billion, or round $3.65 per share, associated to Merck’s acquisition of Cidara, a biotech firm that’s growing a flu prevention drug.
The steering contains “manageable impacts” from the drug pricing deal Merck struck with President Donald Trump in December, in addition to his administration’s current transfer to pare again the pediatric vaccine schedule within the U.S., in accordance with an organization spokesperson.
Underneath that “most-favored-nation” deal, Merck will voluntarily promote its present therapies to Medicaid sufferers on the lowest worth supplied in different developed nations and assure that pricing for brand new drugs, amongst different efforts. In change, Merck will get a three-year reprieve from tariffs.
This is what Merck reported for the fourth quarter in contrast with what Wall Avenue was anticipating, primarily based on a survey of analysts by LSEG:
- Earnings per share: $2.09 adjusted vs. $2.01 anticipated
- Income: $16.4 billion vs. $16.19 billion anticipated
The corporate posted internet earnings of $2.96 billion, or $1.19 per share, for the quarter. That compares with internet earnings of $3.74 billion, or $1.48 per share, for the year-earlier interval.
Excluding acquisition and restructuring prices, Merck earned $2.04 per share for the fourth quarter.
Merck raked in $16.4 billion in income for the quarter, up 5% from the identical interval a 12 months earlier.
The outcomes come as Merck slashes $3 billion in prices by the tip of 2027, and prepares to offset income losses from the upcoming patent expiration of Keytruda in 2028.
Merck shares closed greater than 2% greater on Tuesday.
Keytruda drives development amid Gardasil woes
Merck’s pharmaceutical unit, which develops a variety of medication, booked $14.84 billion in income through the fourth quarter. That is up 6% from the identical interval a 12 months earlier.
Gross sales of Keytruda topped $8.37 billion for the quarter, rising 7% from the identical interval a 12 months in the past. Analysts had been anticipating income of $8.35 billion, in accordance with StreetAccount estimates.
The rise in Keytruda income was pushed by greater uptake of the drug for earlier-stage cancers and robust demand for the therapy for metastatic cancers, which unfold to different components of the physique, the corporate mentioned.
Gross sales of the extra handy subcutaneous model of Keytruda, which gained approval final 12 months, got here in at $35 million through the fourth quarter.
That model of Keytruda is essential to Merck’s efforts to offset seemingly declines in income after the unique formulation of the drug, which is run intravenously, goes off patent.
In the meantime, Merck’s newer drug Winrevair, which is used to deal with a uncommon, lethal lung situation, recorded $467 million in gross sales for the quarter, up 133% from the identical interval a 12 months earlier.
Analysts had anticipated the medicine to herald $459 million, in accordance with StreetAccount estimates.
The expansion of Winrevair, which first entered the market in mid-2024, largely displays greater uptake within the U.S. and its early launch in some worldwide markets.
Merck continued to see bother with China gross sales of Gardasil, a vaccine that forestalls most cancers from HPV, the commonest sexually transmitted an infection within the U.S.
Final February, Merck introduced it could halt shipments of Gardasil into China starting that month. In July, CFO Caroline Litchfield mentioned the corporate wouldn’t resume shipments to China by means of not less than the tip of 2025, noting that inventories stay excessive and demand remains to be delicate.
Gardasil generated gross sales of $1.03 billion for the quarter, down 34% from the identical interval a 12 months in the past due to decrease demand in China. Nonetheless, that was according to what analysts had been anticipating, in accordance with StreetAccount.
Gardasil’s income might face extra stress in 2026. As a part of the Facilities for Illness Management and Prevention’s adjustments to the pediatric vaccine schedule, the company mentioned that youngsters ought to get one dose of the HPV vaccine as an alternative of the 2 to 3 doses beneficial on the label.
Merck’s animal well being division, which develops vaccines and medicines for canines, cats and cattle, posted almost $1.51 billion in gross sales, up 8% from the identical interval a 12 months prior. The corporate mentioned that displays greater demand throughout all species.
