Merck beat third-quarter estimates and raised its profit outlook, driven by stronger-than-expected sales of its immunotherapy Keytruda, including the newer injectable form, Keytruda Qlex. The drugmaker reported revenue of $18.09 billion, up 5% from a year ago, and adjusted earnings of $2.49 per share, topping Wall Street forecasts.
The company now expects adjusted earnings between $2.77 and $2.82 per share, up from a previous range of $2.66 to $2.76. The new guidance includes a one-time charge of $400 million related to a licensing agreement with the Chinese drugmaker SciBrunch. Merck also narrowed its revenue outlook to between $66.8 billion and $67.3 billion.
Keytruda, Merck's blockbuster immunotherapy, generated $8.60 billion in sales in the third quarter, surpassing analysts' expectations of $7.73 billion, according to StreetAccount. That includes $830 million from Keytruda Qlex, the subcutaneous version considered a more convenient injection. Analysts had expected $649 million for Qlex. The company is positioning Qlex as a cornerstone of its growth strategy as it prepares for the original Keytruda's patents to begin expiring in 2028. Transitioning patients to Qlex could help sustain sales beyond that exclusivity loss.
Merck's newer products also performed well. Winrevair, used to treat a rare lung condition, brought in $694 million, up 93% from a year earlier and above expectations. The Gardasil vaccine, which prevents cancers from HPV, posted about $2 billion in sales, driven by higher U.S. demand and beating the $1.76 billion expected. Last year, Gardasil had faced elevated inventory and weak demand in China.
The company's animal health business reported $1.68 billion in sales, falling just below analysts' estimates. Net income for the quarter was $5.07 billion, or $2.04 per share, compared with $5.79 billion a year earlier. Excluding acquisition and restructuring costs, earnings were $2.49 per share.
Analysis
Why This Matters
- Investors see Merck beating expectations and raising guidance, signaling strong underlying performance even as Keytruda patent expiry approaches.
- The success of Keytruda Qlex is critical for Merck's strategy to defend its market share beyond 2028.
- Strong sales from Gardasil and Winrevair show progress in diversifying Merck's portfolio beyond Keytruda.
Background
Keytruda is an immunotherapy drug that is Merck's best-selling product. Its patents begin expiring in 2028, which will open the door to generic competition. Merck has been pursuing deals and developing a subcutaneous version, Keytruda Qlex, to ease the transition. The company has also invested in newer treatments such as Winrevair for pulmonary conditions.
What to Watch
- The pace of patient transition from intravenous Keytruda to Qlex, which will determine if Merck can maintain revenue after 2028.
- Approval and uptake of generic Keytruda as patents expire.
- Gardasil demand in China and whether inventory issues resurface.
Checked
12 claims in this story checked against 1 source: 11 supported.
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- SupportedMerck beat third-quarter estimates and raised its profit outlook as Keytruda, including Qlex, had stronger-than-expected sales.Business News: “Merck on Thursday topped third-quarter estimates and hiked its adjusted profit outlook, as its immunotherapy Keytruda, including a newer injectable form of the drug, showed stronger-than-expected sales.”
- SupportedKeytruda Qlex recorded its highest sales quarter since launch.Business News: “That includes $830 million in sales for Qlex – the highest seen in a quarter since it launched in 2025.”
- SupportedStronger-than-expected Keytruda sales, including sales of Qlex, drove Merck’s results.Business News: “Merck on Thursday topped third-quarter estimates and hiked its adjusted profit outlook, as its immunotherapy Keytruda, including a newer injectable form of the drug, showed stronger-than-expected sales.”
- SupportedMerck reported third-quarter revenue of $18.09 billion, up 5% from a year earlier.Business News: “Merck raked in $18.09 billion in revenue for the quarter, up 5% from the same period a year earlier.”
- SupportedMerck reported adjusted earnings of $2.49 per share, above Wall Street forecasts.Business News: “Earnings per share: $2.49 adjusted vs. $2.08 expected”
- SupportedMerck raised its adjusted earnings outlook to $2.77–$2.82 per share from $2.66–$2.76.Business News: “The pharmaceutical giant now expects adjusted earnings to be between $2.77 and $2.82 per share. That adjusted profit outlook is up from a previous range of $2.66 to $2.76 per share.”
- SupportedThe new guidance includes a one-time $400 million charge related to a licensing agreement with SciBrunch.Business News: “The guidance now includes a one-time charge of $400 million, or 12 cents per share, related to its licensing agreement with the Chinese cancer drugmaker SciBrunch.”
- Partly supportedMerck narrowed its revenue outlook to $66.8 billion–$67.3 billion.Business News: “Merck also narrowed the low end of its 2026 revenue guidance, now expecting sales between $66.8 billion and $67.3 billion.”
- SupportedKeytruda generated $8.60 billion in quarterly sales, above analysts’ $7.73 billion expectation.Business News: “Keytruda raked in $8.60 billion in sales for the quarter, beating the $7.73 billion that analysts were expecting, according to StreetAccount.”
- SupportedQlex generated $830 million in sales, compared with analysts’ expectation of $649 million.Business News: “That includes $830 million in sales for Qlex – the highest seen in a quarter since it launched in 2025. Analysts were expecting $649 million in sales, StreetAccount estimates said.”
- SupportedMerck is positioning Qlex as a cornerstone of its growth strategy and aims to transition patients to it to sustain Keytruda sales beyond the original version’s loss of exclusivity, with key patents beginning to expire in 2028.Business News: “The goal is to transition patients from the original intravenous version to Qlex, considered a more convenient under-the-skin injection. This strategy allows the company to defend its market share and sustain Keytruda's blockbuster sales beyond the original version's loss of exclusivity.”
- SupportedGardasil had about $2 billion in sales, driven by higher US demand, and exceeded analysts’ $1.76 billion expectation.Business News: “the Gardasil vaccine [...] drew about $2 billion in sales due to higher demand in the U.S. That tops the $1.76 billion in sales that analysts were expecting.”