Merck boosts 2026 profit forecast on strong Keytruda sales

Merck raised its full-year 2026 profit forecast on Thursday, citing stronger-than-expected sales of its flagship cancer immunotherapy, Keytruda. The company now projects adjusted earnings between $2.77 and $2.82 per share for the year. This new range represents an increase from its previous guidance of $2.66 to $2.76 per share.

The company’s third-quarter results also beat market expectations. Merck reported adjusted earnings of $2.49 per share, surpassing the $2.08 average estimate from analysts surveyed by LSEG. Total revenue for the quarter reached $18.09 billion, a 5% increase from the same period last year and above the $17.31 billion forecast.

Keytruda generated $8.60 billion in sales, topping the $7.73 billion that analysts expected according to StreetAccount. A major driver of this performance was Keytruda Qlex, an under-the-skin injection version of the drug launched in 2025. Qlex contributed $830 million in sales during the quarter, which was the product's highest quarterly total to date and well above the $649 million analyst projection.

Merck also narrowed the lower bound of its 2026 revenue outlook. The company now expects total revenue between $66.8 billion and $67.3 billion, up from an earlier low-end estimate of $66.3 billion. The new profit guidance includes a one-time charge of $400 million, or 12 cents per share, related to a licensing agreement with Chinese cancer drugmaker SciBrunch.

Other newer products showed strong growth as well. Winrevair, a treatment for a rare lung condition, saw sales jump 93% year over year to $694 million, beating the $645 million analyst estimate. The Gardasil vaccine, which protects against HPV-related cancers, brought in approximately $2 billion in sales. This figure exceeded the $1.76 billion forecast and marked a recovery from weak demand in China the previous year.

The company’s animal health division recorded $1.68 billion in quarterly sales, a figure that fell slightly below analyst estimates. Merck’s strategy relies heavily on transitioning patients from the original intravenous Keytruda to the more convenient Qlex injection. This shift aims to protect market share as key patents for the original drug begin to expire in 2028, allowing the company to sustain sales despite upcoming generic competition.

Net income for the third quarter was $5.07 billion, or $2.04 per share. This figure is down from $5.79 billion, or $2.32 per share, in the same period last year. The company continues to pursue additional deals to offset the financial pressure from the approaching end of Keytruda's exclusivity.