Merck & Co., Inc., Rahway, N.J., USA Announces Third-Quarter 2026 Financial Results; Highlights Multiple Milestones Advancing Broad, Diverse Pipeline

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-

Exchange

Sales

$18,085

$17,276

GAAP net income 2

5,065

5,785

-12%

-14%

Non-GAAP net income that excludes certain items 2,3*

6,159

6,448

-4%

-5%

GAAP EPS

2.04

2.32

-12%

-13%

Non-GAAP EPS that excludes certain items 3*

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-

Exchange

Commentary

Total Sales

$18,085

$17,276

Pharmaceutical

16,268

15,611

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/

KEYTRUDA QLEX

8,601

8,147

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/

GARDASIL 9

1,995

1,749

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

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%

Decline primarily driven by lower demand due to generic competition following loss of market exclusivity in the U.S.

Lynparza*

352

379

-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%

Growth primarily due to higher demand in the U.S.

CAPVAXIVE

263

244

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

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%

Decline primarily driven by lower demand in the U.S. due to generic competition following loss of market exclusivity.

LAGEVRIO

138

-88%

Decline largely due to lower demand in Japan.

Animal Health

1,676

1,615

Growth attributable to both Livestock and Companion Animal product portfolios.

Livestock

1,048

1,023

Growth primarily driven by higher demand for poultry products.

Companion Animal

628

592

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

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-

and

Divestiture-

Costs 4

Restructuring

Costs

(Income)

Loss From

Investments

in Equity

Securities

Non-

GAAP 3

Third Quarter 2026

Cost of sales

$4,892

$1,140

$396

$3,356

Selling, general and administrative

2,886

2,862

Research and development

4,537

4,533

Restructuring costs

184

Other (income) expense, net

(393)

420

Third Quarter 2025

Cost of sales

$3,855

$621

$110

$3,124

Selling, general and administrative

2,633

2,599

Research and development

4,234

233

3,997

Restructuring costs

Other (income) expense, net

(238)

(344)

106

GAAP Expense, EPS and Related Information

Gross margin was 72.9% for the third quarter of 2026 compared with 77.7% for the third quarter of 2025. The decrease was primarily due to higher amortization of intangible assets, restructuring costs and production costs.

Selling, general and administrative (SG&A) expenses were $2.9 billion in the third quarter of 2026, an increase of 10% compared with the third quarter of 2025. The increase was primarily due to higher administrative costs, as well as higher promotional costs in support of product launches.

Research and development (R&D) expenses were $4.5 billion in the third quarter of 2026, an increase of 7% compared with the third quarter of 2025. The increase was primarily due to a $400 million charge related to a global license agreement with SciBrunch and higher clinical development spending, partially offset by lower restructuring costs and a $200 million reduction in R&D expenses as part of a funding agreement with Blackstone Life Sciences (Blackstone). R&D expenses in the third quarter of 2025 include a $300 million charge for a milestone payment to LaNova for the completion of the technology transfer for MK-2010.

Other (income) expense, net, was $27 million of expense in the third quarter of 2026 compared with $238 million of income in the third quarter of 2025. The unfavorability was primarily due to higher net interest expense.

The effective income tax rate for the third quarter of 2026 was 8.9%, reflecting the favorable impacts of certain discrete items, as well as jurisdictional mix of income and expense.

GAAP EPS was $2.04 for the third quarter of 2026 compared with $2.32 for the third quarter of 2025. The decrease was primarily driven by higher operating expenses, reflecting increased investments to advance the R&D pipeline and support product launches, higher amortization of intangible assets, higher net interest expense and increased restructuring costs, partially offset by operational strength in the business and a lower effective income tax rate.

Non-GAAP Expense, EPS and Related Information

Non-GAAP gross margin was 81.4% for the third quarter of 2026 compared with 81.9% for the third quarter of 2025. The decrease was primarily due to higher production costs.

Non-GAAP SG&A expenses were $2.9 billion in the third quarter of 2026, an increase of 10% compared with the third quarter of 2025. The increase was primarily due to higher administrative costs, as well as higher promotional costs in support of product launches.

Non-GAAP R&D expenses were $4.5 billion in the third quarter of 2026, an increase of 13% compared with the third quarter of 2025. The increase was primarily due to a $400 million charge related to a global license agreement with SciBrunch and higher clinical development spending, partially offset by a $200 million reduction in R&D expenses as part of a funding agreement with Blackstone. R&D expenses in the third quarter of 2025 include a $300 million charge for a milestone payment to LaNova for the completion of the technology transfer for MK-2010.

Non-GAAP other (income) expense, net, was $420 million of expense in the third quarter of 2026 compared with $106 million of expense in the third quarter of 2025. The unfavorability was primarily due to higher net interest expense.

The non-GAAP effective income tax rate for the third quarter of 2026 was 10.9%, reflecting the favorable impacts of certain discrete items, as well as jurisdictional mix of income and expense.

Non-GAAP EPS was $2.49 for the third quarter of 2026 compared with $2.58 for the third quarter of 2025. The decrease was primarily driven by higher operating expenses, reflecting increased investments to advance the R&D pipeline and support product launches, and higher net interest expense, partially offset by operational strength in the business and a lower effective income tax rate.

A reconciliation of GAAP to non-GAAP net income and EPS is provided in the table that follows.

Third Quarter

$ in millions, except EPS amounts

2026

2025

EPS

GAAP EPS

$2.04

$2.32

Difference

0.45

0.26

Non-GAAP EPS that excludes items listed below 3

$2.49

$2.58

Net Income

GAAP net income 2

$5,065

$5,785

Difference

1,094

663

Non-GAAP net income that excludes items listed below 2,3

$6,159

$6,448

Excluded Items:

Acquisition- and divestiture-related costs 4

$1,167

$659

Restructuring costs

581

390

Income from investments in equity securities

(393)

(344)

Decrease to net income before taxes

1,355

705

Estimated income tax (benefit) expense 5

(261)

(42)

Decrease to net income

$1,094

$663

Pipeline and Portfolio Highlights

In the third quarter, the Company achieved key regulatory and clinical milestones to meaningfully advance its broad and diverse pipeline.

Notable recent news releases on the Company’s pipeline and portfolio are provided in the table that follows. Visit the News Releases section of the Company’s website to read the releases.*

Sac-TMT Reduced Risk of Death by 32% and Risk of Disease Progression or Death by 41% Compared to Chemotherapy in Certain Patients With Advanced or Recurrent Endometrial Cancer; Results From Phase 3 TroFuse-005 Trial

The Company and Moderna Presented Results From Landmark Phase 3 INTerpath-001 Trial for Intismeran Plus KEYTRUDA at ESMO 2026 Presidential Symposium; Intismeran Plus KEYTRUDA Significantly Reduced Risk of Recurrence or Death by 42% (HR=0.58 [95% CI, 0.45–0.75]; Two-Sided p<0.001) Compared to KEYTRUDA Alone for Patients With Completely Resected Stage IIB-IV Melanoma

KEYTRUDA as Monotherapy Reduced Risk of Disease Progression or Death by 43% for Certain Patients With Advanced or Recurrent Endometrial Cancer With dMMR Tumors Compared to Chemotherapy; Results From Phase 3 KEYNOTE-C93 Trial

U.S. FDA Approved WELIREG Plus Lenvima for Certain Previously Treated Adult Patients With ccRCC; Based on Results From Phase 3 LITESPARK-011 Trial, Presented at ESMO

KEYTRUDA QLEX Approved in Japan for Subcutaneous Administration for All KEYTRUDA Indications Approved in Japan; Based on Results From Phase 3 MK-3475A-D77 Trial

EC Approved KEYTRUDA Plus Padcev as Perioperative Treatment for Adults With Resectable MIBC; Based on Results From Phase 3 KEYNOTE-B15 Trial

I-DXd BLA for Certain Patients With ES-SCLC Voluntarily Withdrawn

The Company Entered Into Exclusive Global License Agreement With SciBrunch for SPR2015, an Investigational Oral KRAS G12D (ON) Inhibitor

Vaccines and Infectious Diseases

U.S. FDA Accepted sBLA for ENFLONSIA to Update Its RSV LRTD Indication to Include Children Under 2 Years at Increased Risk for Severe RSV for Their Second Season; Based on Results From Phase 3 SMART Trial; FDA Set PDUFA Date of March 22, 2027

Cardiometabolic, Respiratory and Specialty

U.S. FDA Approved Update to the Label for WINREVAIR to Include Data From the Phase 3 HYPERION Trial Evaluating Adults Recently Diagnosed With PAH (PAH, WHO Group 1 Pulmonary Hypertension)

Immunology

Tulisokibart Met Primary and Key Secondary Endpoints in Phase 2b Study in Patients With Moderate to Severe HS

Ophthalmology

The Company Presented One-Year Results From Pivotal Phase 2b/3 BRUNELLO Study Evaluating Remigromig, a Tri-Specific Agonist of the Wnt Pathway, in Adults With DME, at AAO 2026

*References in the above news release titles have been modified for the purpose of this announcement.

Sustainability Highlights

The Company’s 2025/2026 Purpose for Progress Impact Report provided a comprehensive view of the Company’s measurable progress across its sustainability priorities, including achieving all goals targeted for completion by 2025. The Company also introduced new targets for 2030, including a goal to reach 100 million people with access solutions that close gaps in care by 2030.

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 margin 3

Approximately 81%

Non-GAAP Operating expenses 3**

$42.4 billion to $42.9 billion

$42.0 billion to $42.7 billion

Non-GAAP Other (income) expense, net 3

Approximately $1.4 billion expense

Non-GAAP Effective income tax rate 3

32.0% to 33.0%

35.0% to 36.0%

Non-GAAP EPS 3***

$2.77 to $2.82

$2.66 to $2.76

Share count (assuming dilution)

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.

Earnings Conference Call

Investors, journalists and the general public may access a live audio webcast of the call on Thursday, Oct. 29, at 9 a.m. EDT via this weblink. A replay of the webcast, along with the sales and earnings news release, supplemental financial disclosures and slides highlighting the results, will be available on the Company’s website.

All participants may join the call by dialing (800) 369-3351 (U.S. and Canada Toll-Free) or (517) 308-9448 and using the access code 9818590.

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.

Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J., USA

This news release of Merck & Co., Inc., Rahway, N.J., USA (the “Company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to pipeline candidates that the candidates will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.

Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the Company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the Company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.

The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and the Company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site ( www.sec.gov).

Appendix

Generic product names are provided below.

Pharmaceutical

BRIDION (sugammadex)

CAPVAXIVE (Pneumococcal 21-valent Conjugate Vaccine)

ENFLONSIA (clesrovimab-cfor)

GARDASIL (Human Papillomavirus Quadrivalent [Types 6, 11, 16 and 18] Vaccine, Recombinant)

GARDASIL 9 (Human Papillomavirus 9-valent Vaccine, Recombinant)

IDVYNSO (doravirine/islatravir)

JANUMET (sitagliptin and metformin HCl)

JANUVIA (sitagliptin)

KEYTRUDA (pembrolizumab)

KEYTRUDA QLEX (pembrolizumab and berahyaluronidase alfa-pmph)

LAGEVRIO (molnupiravir)

Lenvima (lenvatinib)

Lynparza (olaparib)

M-M-R II (Measles, Mumps and Rubella Virus Vaccine Live)

OHTUVAYRE (ensifentrine)

PREVYMIS (letermovir)

PROQUAD (Measles, Mumps, Rubella and Varicella Virus Vaccine Live)

VARIVAX (Varicella Virus Vaccine Live)

WELIREG (belzutifan)

WINREVAIR (sotatercept-csrk)

Animal Health

BRAVECTO (fluralaner)

3Q26

3Q25

18,085

17,276

50,978

48,611

4,892

3,855

13,482

10,831

2,886

2,633

8,491

7,835

4,537

4,234

26,871

11,903

184

530

676

-22

(238

)

262

(281

)

5,559

6,745

-18

1,342

17,647

-92

492

958

1,855

2,346

5,067

5,787

-12

(513

)

15,301

)

5,065

5,785

-12

(510

)

15,291

2.04

2.32

-12

(0.21

)

6.08

2,478

2,498

2,471

2,514

8.9

14.2

138.2

13.3

4,892

1,140

396

1,536

3,356

2,886

2,862

4,537

4,533

184

–

(393

)

(393

)

420

5,559

(1,167

)

(581

)

393

(1,355

)

6,914

492

(239

)

(105

)

(261

)

753

5,067

(928

)

(476

)

310

(1,094

)

6,161

5,065

(928

)

(476

)

310

(1,094

)

6,159

2.04

(0.38

)

(0.19

)

0.12

(0.45

)

2.49

8.9

10.9

13,482

3,221

817

4,038

9,444

8,491

8,418

26,871

26,828

530

–

262

(764

)

(764

)

1,026

1,342

(3,303

)

(1,381

)

764

(3,920

)

5,262

1,855

(660

)

(240

)

163

)

(737

2,592

(513

)

(2,643

)

(1,141

)

601

(3,183

)

2,670

(510

)

(2,643

)

(1,141

)

601

(3,183

)

2,673

(0.21

)

(1.07

)

(0.46

)

0.24

(1.29

)

1.08

138.2

49.3

MERCK & CO., INC., RAHWAY, N.J., USA

FRANCHISE / KEY PRODUCT SALES

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3

2026

2025

16,286

16,607

18,085

50,978

15,529

15,806

17,276

48,611

16,400

65,011

14,349

14,760

16,268

45,377

13,638

14,050

15,611

43,299

14,843

58,142

7,906

7,904

7,771

23,581

7,205

7,956

8,142

23,303

8,337

31,641

-5

-4

128

463

830

1,420

341

365

352

1,059

312

370

379

1,061

389

1,450

-7

-2

256

283

287

826

258

265

258

781

272

1,053

199

271

307

776

137

162

196

496

220

716

148

122

177

448

119

107

136

361

164

525

1,069

1,169

1,995

4,232

1,327

1,126

1,749

4,202

1,031

5,233

538

592

730

1,860

539

609

684

1,832

619

2,451

472

497

144

1,113

441

461

439

1,341

499

1,841

-67

-17

272

295

347

915

208

228

266

702

275

978

142

184

263

588

107

129

244

480

279

759

202

148

195

545

230

229

226

685

140

825

-14

-13

-20

-22

206

134

196

536

228

121

204

554

119

673

-4

-3

-4

249

225

312

101

243

228

306

-13

-12

187

190

100

138

136

142

140

171

258

325

-36

-34

222

247

-68

102

138

323

380

-88

-85

525

588

694

1,808

280

336

360

976

467

1,443

367

258

186

811

549

372

382

1,302

302

1,604

-51

-50

-38

-37

207

171

194

572

247

251

243

741

199

940

-20

-23

-24

131

204

184

519

178

109

126

118

353

106

123

112

340

129

470

234

229

312

-5

-3

-1

774

641

793

2,209

865

703

1,004

2,573

770

3,340

-21

-14

-15

1,791

1,775

1,676

5,243

1,588

1,646

1,615

4,849

1,505

6,354

1,064

1,041

1,048

3,154

924

961

1,023

2,909

987

3,896

727

734

628

2,089

664

685

592

1,940

518

2,458

146

141

358

303

110

463

515

185

-25

-23

-8