Merck reported first-quarter 2026 worldwide sales of $16.3B, an increase of 5% versus Q1 2025, or 3% excluding foreign exchange effects, driven by continued growth in oncology and animal health and contributions from newer launches. Pharmaceutical sales rose 5% to $14.3B, reflecting higher demand in oncology, cardiometabolic and respiratory products, partially offset by declines in vaccines, diabetes and infectious diseases, while Animal Health sales increased 13% to $1.8B (6% ex‑FX), with growth in both livestock and companion animal portfolios.
For the quarter, Merck reported a GAAP net loss of $4.24B, compared with GAAP net income of $5.08B in Q1 2025, resulting in a GAAP loss per share of $1.72 versus earnings per share (EPS) of $2.01 a year earlier. The GAAP loss reflected a one-time charge of $9.0B, or $3.62 per share, related to the acquisition of Cidara Therapeutics, Inc. On a non‑GAAP basis, which excludes acquisition- and divestiture-related costs, restructuring costs and gains or losses from equity securities, Merck reported a net loss of $3.16B and a non‑GAAP loss per share of $1.28, compared with non‑GAAP net income of $5.61B and non‑GAAP EPS of $2.22 in Q1 2025.
KEYTRUDA/KEYTRUDA QLEX remained Merck’s largest product, with combined sales of $8.03B, up 12% year over year (8% ex‑FX), driven by higher global demand in metastatic indications such as urothelial cancer and continued uptake in earlier-stage indications, including triple‑negative breast cancer, cervical cancer and renal cell carcinoma. Animal Health revenue of $1.79B grew 13% (6% ex‑FX), supported by increased demand and pricing in livestock products and growth in companion animal products, including BRAVECTO line sales of $379M, up 16% (9% ex‑FX). Other notable product performances included WINREVAIR at $525M (up 88%), WELIREG at $199M (up 45%), and CAPVAXIVE at $142M (up 33%), while GARDASIL/GARDASIL 9 sales declined 19% to $1.07B, primarily due to lower demand in China and Japan and weaker U.S. public-sector purchasing.
GAAP gross margin decreased to 74.2% in Q1 2026 from 78.0% a year earlier, reflecting higher amortization of intangibles, restructuring costs, inventory fair value step‑up from the Verona Pharma acquisition and unfavorable foreign exchange, partly offset by favorable product mix. GAAP research and development (R&D) expenses increased to $12.6B from $3.6B, primarily due to the Cidara acquisition charge, higher clinical development spending and FX effects, offset by a $200M R&D cost reduction from a funding agreement with Blackstone Life Sciences and the absence of a $100M EyeBio milestone recorded in Q1 2025. On a non‑GAAP basis, gross margin was 81.9% versus 82.2% in Q1 2025, while non‑GAAP R&D expenses rose for the same reasons, including the Cidara charge. The GAAP effective tax rate was −20.1% and the non‑GAAP effective tax rate was −43.5%, both reflecting the non‑deductible Cidara charge with no recorded tax benefit.
During the quarter, Merck reported multiple regulatory and clinical milestones. In oncology, the U.S. Food and Drug Administration (FDA) approved KEYTRUDA and KEYTRUDA QLEX plus paclitaxel, with or without bevacizumab, for certain adults with PD‑L1‑positive platinum‑resistant ovarian cancer, and the European Commission granted a corresponding approval. The FDA granted priority review to ifinatamab deruxtecan (I‑DXd) for previously treated extensive‑stage small cell lung cancer, accepted priority review filings for WELIREG in combination with KEYTRUDA/KEYTRUDA QLEX in renal cell carcinoma, and accepted applications for WELIREG plus Lenvima in advanced RCC, with Prescription Drug User Fee Act (PDUFA) dates set in June, October, and October 2026, respectively. Merck also announced positive Phase 3 KEYNOTE‑B15 results showing KEYTRUDA plus Padcev reduced event‑free survival events and risk of death in cisplatin‑eligible muscle‑invasive bladder cancer and reported that several Phase 3 KEYTRUDA studies (KEYNOTE‑975, KEYNOTE‑866, LITESPARK‑012 triplet regimens) did not meet primary endpoints.
In vaccines and infectious diseases, the FDA approved once‑daily IDVYNSO (doravirine/islatravir), a two‑drug single‑tablet regimen for certain adults with virologically suppressed HIV‑1, with a parallel approval in Japan. The European Commission approved ENFLONSIA for prevention of respiratory syncytial virus lower respiratory tract disease in infants during their first RSV season, and Merck reported positive second‑season results from the Phase 3 SMART trial in high‑risk infants and children. In cardiometabolic and respiratory, Merck presented Phase 3 CORALreef AddOn data showing enlicitide decanoate, an investigational oral PCSK9 inhibitor, produced greater LDL‑C reductions than guideline‑recommended oral non‑statins when added to background statins, and Phase 2 CADENCE data supporting further development of WINREVAIR in combined post‑ and precapillary pulmonary hypertension with HFpEF.
Merck also highlighted business development and updated guidance. The company announced an agreement to acquire Terns Pharmaceuticals, Inc., adding TERN‑701, an investigational allosteric BCR::ABL1 inhibitor in Phase 1/2 for chronic myeloid leukemia, with closing expected in May 2026. Merck now anticipates full‑year 2026 sales between $65.8B and $67.0B, up slightly from prior guidance of $65.5B to $67.0B, and continues to expect a non‑GAAP gross margin of about 82%. The company reaffirmed its non‑GAAP effective tax rate outlook of 23.5%–24.5% and raised its non‑GAAP EPS guidance range to $5.04–$5.16 from $5.00–$5.15, including a one‑time $9.0B ($3.62 per share) charge for the Cidara acquisition and excluding any impact from the proposed Terns transaction.
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