Merck Beats Q3 Estimates on Keytruda and Winrevair, Raises 2026 EPS Outlook; Shares Gain

MRK reported third-quarter 2026 revenue of $18.1 billion, up 4% excluding currency effects, and earnings per share of $2.49, well ahead of the $2.09 consensus estimate. On a non-GAAP basis EPS still fell 3% from a year earlier, and GAAP EPS was $2.04, with both figures absorbing a $0.12 per share charge for a licensing deal with SciBrunch, according to the company's release. The shares rose 4.82% to $147.73 before the open, climbed as much as 5.17% to $148.22 by late morning, and finished the session up about 3.8% near $146.33, per SentiSense market data.

Keytruda remained the engine. Sales of Keytruda and its subcutaneous form Keytruda Qlex rose 6% to $8.6 billion, including $830 million from Qlex, the company said. Winrevair, a treatment for pulmonary arterial hypertension, grew 93% to $694 million, and Gardasil vaccine sales rose 14% to about $2 billion, mostly on higher U.S. demand. Animal Health sales were $1.7 billion, up 4%.

Merck raised its full-year non-GAAP EPS guidance to $2.77-$2.82 from $2.66-$2.76 and narrowed its sales outlook to $66.8 billion-$67.3 billion, lifting the low end from $66.3 billion. The EPS range is unusually low because of a $2.31 per share charge taken in the second quarter for the Terns acquisition. Management also said about $550 million of third-quarter sales came from favorable U.S. purchase timing that it expects to unwind, with the Keytruda and Winrevair portions reversing in the fourth quarter.

Chief executive Robert Davis pointed to the pipeline, calling the Phase 3 melanoma data for intismeran autogene, the individualized mRNA cancer vaccine developed with MRNA, "the first Phase 3 validation of a therapeutic cancer vaccine." What to watch: whether fourth-quarter results absorb the purchase-timing reversal without a guidance cut, the pace of Keytruda Qlex adoption as Keytruda growth moderates into 2027, and a regulatory filing for the cancer vaccine.