Merck (MRK) Tops Q3 Estimates as Keytruda and Gardasil Outperform

Merck (MRK) reported third-quarter sales of $18.09 billion, up 5% year on year, beating the $17.31 billion analysts expected, according to LSEG data cited by Reuters and CNBC. Adjusted earnings of $2.49 a share topped the $2.08 LSEG estimate. The shares rose 3.8% on Thursday to close at $146.33, after the results came out before the open.

What stood out

Keytruda, Merck’s cancer immunotherapy and its biggest product, brought in $8.6 billion with its newer under-the-skin version, Keytruda Qlex, the release showed. Qlex alone sold $830 million, well above the $649 million analysts expected, according to StreetAccount estimates cited by CNBC and Quartz.

Gardasil, the HPV vaccine whose sales fell sharply last year, grew again. Sales rose 14% to just under $2 billion, helped by early purchases by the US Centers for Disease Control and Prevention, Reuters and CNBC reported. Winrevair, a lung blood-pressure drug, nearly doubled its sales to $694 million.

Part of the beat was timing, not demand. Merck said about $550 million of third-quarter sales came from customers buying earlier than usual. In its prepared remarks, it said the Keytruda and Winrevair part of that should fully unwind in the fourth quarter, and most of the Gardasil part in 2027.

“Our science-led strategy is transforming our business,” Chairman and Chief Executive Robert Davis said in the release. He pointed to cancer data shown at this month’s ESMO congress, including the melanoma vaccine Merck is developing with Moderna that sank Moderna’s shares last week when the results appeared online early.

The outlook

Merck raised its 2026 adjusted earnings forecast to $2.77 to $2.82 a share, from $2.66 to $2.76. The new range includes a one-time charge of about $400 million, or 12 cents a share, for a licensing deal with SciBrunch, Quartz and CNBC reported. The forecast also carries large charges for this year’s purchases of Cidara and Terns.

The company also narrowed its sales forecast to $66.8 billion to $67.3 billion, lifting the bottom of the range from $66.3 billion and keeping the top unchanged.

Our take

This was a solid beat, but about $550 million of it was borrowed from coming quarters, so the fourth quarter will look weaker against it. The Qlex numbers matter most, since moving patients to the new version is Merck’s main defense against Keytruda’s coming patent expirations. Next quarter we’d watch how much of the early buying unwinds and whether Qlex keeps growing.