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A month has gone by since the last earnings report for Merck (MRK - Free Report) . Shares have added about 18.2% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Merck due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Merck & Co., Inc. before we dive into how investors and analysts have reacted as of late.

Q2 Earnings & Sales Beat EstimatesMerck reported an adjusted loss of 13 cents per share for the second quarter of 2026, narrower than the Zacks Consensus Estimate of a loss of 26 cents. In the year-ago quarter, the company reported adjusted earnings of $2.13 per share.

Including acquisition and divestiture-related costs, restructuring costs, income and losses from investments in equity securities and certain other items, loss was 54 cents per share in the second quarter versus earnings of $1.76 per share in the year-ago quarter.

Adjusted as well as reported earnings included a charge of $2.31 per share recorded in the quarter related to the acquisition of Terns Pharmaceuticals, which was completed during the period.

Revenues in the second quarter increased 5% year over year on a reported basis and 4% excluding foreign exchange (Fx) to $16.61 billion. Sales beat the Zacks Consensus Estimate of $16.33 billion. Higher sales of oncology drugs, including Keytruda and contributions from new products like Winrevair, Welireg and Capvaxive, and the Animal Health segment were partially offset by lower sales of Gardasil and some other vaccines.

Quarter in DetailThe Pharmaceutical segment generated revenues of $14.76 billion, up 5% year over year (4% excluding FX). Pharmaceutical segment revenues beat the Zacks Consensus Estimate of $14.28 billion.

All sales growth numbers discussed below exclude FX impact.

Oncology DrugsCombined sales of Keytruda and Keytruda Qlex increased 4% to $8.37 billion. The reported figure topped the Zacks Consensus Estimate of $8.06 billion.

Sales of Keytruda benefited from rapid uptake across earlier-stage indications and continued strong momentum in metastatic indications.

Keytruda sales in the second quarter included $463 million in sales of Keytruda Qlex, the subcutaneous formulation of Keytruda, compared to $128 million in the previous quarter as patient adoption has increased since the permanent J-code was established in April.

Merck is seeing an increase in usage of Keytruda in tumors that primarily affect women, including cervical and breast cancers, as well as Keytruda in combination with Padcev in first-line, locally advanced or metastatic urothelial cancer.

Merck said on the conference call that Keytruda’s U.S. growth will moderate as penetration peaks in several indications. The comparison will also be impacted by a $250 million wholesaler purchase benefit in the third quarter of 2025.

On the conference call, Merck’s CEO Robert Davis said that the Keytruda exclusivity transition will create a shallow decline followed by a fast return to growth.

Alliance revenues from Lynparza declined 2% to $365 million in the quarter. Lenvima alliance revenues increased 6% to $283 million, driven by higher U.S. demand, partly offset by lower net pricing.

Welireg sales surged 67% to $271 million, reflecting higher demand in the United States for certain previously treated advanced renal cell carcinoma patients and continued launch uptake across international markets, particularly Japan. Favorable wholesaler purchasing patterns in the United States also aided performance.

VaccinesIn vaccines, sales of HPV vaccines — Gardasil and Gardasil 9 — rose 3% to $1.17 billion. Higher demand in the Asia Pacific and Europe, along with favorable tender timing in Europe, supported the franchise. These gains were partly offset by lower demand and unfavorable timing of CDC purchases in the United States. Gardasil/Gardasil 9 sales missed the Zacks Consensus Estimate of $1.18 billion.

Combined sales of ProQuad, M-M-R II and Varivax declined 3% to $592 million, mainly due to lower demand in the United States.

Sales of the pneumococcal 15-valent conjugate vaccine Vaxneuvance declined 36% to $148 million due to lower demand in the United States and most international markets as well as unfavorable comparison to the prior year quarter, as public-sector activity in the United States increased sales in that period.

Capvaxive sales increased 40% to $184 million, driven by increased demand in the United States and continued launch uptake in some international markets.

Sales of the new RSV vaccine, Enflonsia, in the United States were $2 million in the second quarter of 2026 compared with $1 million in the first quarter.

Other DrugsIn the infectious disease portfolio, Bridion sales rose 8% to $497 million due to higher demand and pricing in the United States, partially offset by lower demand in most international markets due to generic competition. Bridion lost patent exclusivity in the United States in July 2026. However, Merck expects that U.S. sales will decline at a slower pace than previously expected due to lower-than-anticipated generic competition.

Prevymis sales increased 28% to $295 million, driven by higher demand in the United States and certain European markets.

Januvia/Janumet franchise sales fell 31% year over year to $429 million. Sales of the drug declined due to lower demand and net pricing in the United States due to competition, as well as lower demand in China and most other international markets amid ongoing generic competition.

Winrevair sales jumped 75% to $588 million, reflecting continued strong demand in the United States and early launch momentum across international markets, particularly Japan and Europe.

Ohtuvayre, added from the October 2025 acquisition of Verona Pharma, contributed $204 million in sales in the second quarter compared with $131 million in the previous quarter. Revenues in the second quarter benefitted from continued prescription demand as well as favorable timing of specialty pharmacy purchases. However, third-quarter revenues will be hurt by the unwinding of specialty pharmacy purchases. Merck is investing in salesforce expansion and patient support to drive accelerated growth in 2027.

Regarding its newly launched HIV pill, Idvynso, Merck said it is seeing encouraging early progress on access and reimbursement.

Merck’s Animal Health segment generated revenues of $1.78 billion, up 8% year over year on a reported basis and 5% excluding FX. This growth was driven by higher demand for livestock as well as companion animal products. Sales from this segment marginally beat the Zacks Consensus Estimate of $1.77 billion.

Sales of livestock products rose 6% to $1.04 billion, driven by higher demand for ruminant and poultry products. Sales of companion animal products rose 5% to $734 million, driven by new product launches.

Margin DiscussionAdjusted gross margin was 81.1%, down 110 basis points year over year due to higher inventory write-offs.

Adjusted selling, general and administrative expenses rose 10% to $2.89 billion, reflecting higher administrative and promotional spending.

Adjusted research and development expenses increased almost 144% to $9.74 billion in the quarter due to a significantly higher charge of $5.7 billion related to the Terns acquisition compared to a $200 million business development charge a year ago.

Excluding these business development charges, operating expenses grew 7% in the quarter.

2026 Sales Guidance Upped, EPS Range LoweredMerck raised its sales guidance for 2026 while lowering its adjusted EPS range to include acquisition costs.

The company now expects revenues to be in the range of $66.3-$67.3 billion, compared with the previous expectation of $65.8-$67.0 billion. The new range indicates year-over-year growth of 2% to 4%.

The company now expects adjusted earnings of $2.66-$2.76 per share, down from its previous guidance of $5.04-$5.16. The revised range includes a one-time charge of $2.43 per share related to the Terns acquisition.

The 2026 guidance represents a significant decline from adjusted EPS of $8.98 in 2025 due to higher charges related to business development transactions. In 2025, Merck recorded a one-time charge of 20 cents per share related to business development transactions.

The guidance includes a positive impact from Fx of approximately 1% on sales and around 15 cents on EPS.

The adjusted gross margin is expected to be around 81%, lower than the prior expectation of approximately 82% due to higher inventory reserves.

Adjusted operating expenses are now expected to be in the range of $42.0-$42.7 billion compared with the earlier projection of $36.0 billion to $36.8 billion. The adjusted tax rate guidance was raised to 35-36% compared with the previous guidance of 23.5-24.5%.

In 2026, Merck expects to buy back shares worth $3 billion.

How Have Estimates Been Moving Since Then?It turns out, estimates revision have trended downward during the past month.

VGM ScoresCurrently, Merck has a average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock has a score of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Merck has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry PlayerMerck is part of the Zacks Large Cap Pharmaceuticals industry. Over the past month, Novartis (NVS - Free Report) , a stock from the same industry, has gained 5.2%. The company reported its results for the quarter ended June 2026 more than a month ago.

Novartis reported revenues of $14.41 billion in the last reported quarter, representing a year-over-year change of +2.5%. EPS of $2.41 for the same period compares with $2.42 a year ago.

For the current quarter, Novartis is expected to post earnings of $2.24 per share, indicating a change of -0.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.7% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Novartis. Also, the stock has a VGM Score of D.

111 Capital purchased a new stake in Merck & Co., Inc. (NYSE:MRK – Free Report) during the second quarter, according to its most recent filing with the SEC. The firm purchased 4,582 shares of the company’s stock, valued at approximately $589,000.

Several other hedge funds also recently bought and sold shares of the company. Kingdom Financial Group LLC. acquired a new stake in Merck & Co., Inc. during the 4th quarter worth $25,000. Abound Financial LLC bought a new position in Merck & Co., Inc. during the fourth quarter worth about $26,000. Prosperity Bancshares Inc acquired a new position in Merck & Co., Inc. in the fourth quarter valued at about $26,000. High Note Wealth LLC grew its stake in Merck & Co., Inc. by 58.9% in the fourth quarter. High Note Wealth LLC now owns 294 shares of the company’s stock valued at $31,000 after acquiring an additional 109 shares during the period. Finally, IFC & Insurance Marketing Inc. acquired a new position in Merck & Co., Inc. in the fourth quarter valued at about $31,000. 76.07% of the stock is currently owned by institutional investors and hedge funds.

Insider Activity at Merck & Co., Inc. In other news, EVP Chirfi Guindo sold 10,000 shares of the firm’s stock in a transaction that occurred on Thursday, August 13th. The shares were sold at an average price of $135.00, for a total transaction of $1,350,000.00. Following the transaction, the executive vice president directly owned 36,613 shares of the company’s stock, valued at approximately $4,942,755. This trade represents a 21.45% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, EVP David R. Maraldo sold 18,706 shares of Merck & Co., Inc. stock in a transaction that occurred on Wednesday, August 5th. The shares were sold at an average price of $128.72, for a total transaction of $2,407,836.32. Following the completion of the sale, the executive vice president owned 18,212 shares of the company’s stock, valued at approximately $2,344,248.64. The trade was a 50.67% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last ninety days, insiders have sold 228,238 shares of company stock valued at $29,977,783. 0.17% of the stock is currently owned by insiders.

More Merck & Co., Inc. News Here are the key news stories impacting Merck & Co., Inc. this week: Positive Sentiment: Merck and Moderna reported that their personalized cancer therapy met key Phase 3 goals, improving recurrence-free and distant metastasis-free survival for high-risk melanoma patients when added to Keytruda. The result is the first major late-stage win for an mRNA cancer vaccine and strengthens the potential for regulatory approval and broader oncology applications. MRK/MRNA’s Personalized Cancer Therapy Delivers First Phase III Win Positive Sentiment: Several Wall Street firms raised their outlooks for MRK: Goldman Sachs increased its price target to $160 and kept a Buy rating, while BMO raised its target to $170 and UBS lifted its target to $175. Morgan Stanley also upgraded the shares to Overweight with a $179 target after the cancer-trial success. Positive Sentiment: Investors see Merck’s newer products, acquired assets and pipeline programs as a potential growth cushion against Keytruda’s eventual patent expiration. The company’s expanding portfolio could help diversify revenue beyond its flagship drug. Can Merck’s New Drugs Offer Growth Cushion Ahead of Keytruda LOE? Neutral Sentiment: Unusually high options activity indicates heightened investor interest and potential volatility, but it does not by itself establish the direction of the stock. Negative Sentiment: RBC Capital Markets downgraded Merck to Sector Perform and set a $150 target, arguing that execution risks and the 2028 Keytruda loss of exclusivity are being underestimated. RBC said near-term catalysts are attractive, but the stock’s valuation leaves limited room for additional gains. Merck upgraded at Morgan Stanley after cancer trial win; RBC downgrades Negative Sentiment: Jefferies separately moved Merck from Strong Buy to Hold. The central concern is that the shares have already rallied substantially on the trial news, making the current valuation appear demanding relative to the remaining patent and execution risks. Merck & Co., Inc. Stock Up 2.3% MRK stock opened at $152.43 on Friday. Merck & Co., Inc. has a twelve month low of $77.58 and a twelve month high of $154.49. The company has a quick ratio of 1.10, a current ratio of 1.32 and a debt-to-equity ratio of 1.22. The business has a 50 day moving average price of $128.09 and a two-hundred day moving average price of $121.23. The company has a market cap of $376.07 billion, a price-to-earnings ratio of 121.94, a P/E/G ratio of 6.58 and a beta of 0.19.

Merck & Co., Inc. (NYSE:MRK – Get Free Report) last issued its earnings results on Tuesday, August 4th. The company reported ($0.13) earnings per share (EPS) for the quarter, beating the consensus estimate of ($0.26) by $0.13. Merck & Co., Inc. had a net margin of 4.77% and a return on equity of 16.73%. The business had revenue of $16.61 billion during the quarter, compared to the consensus estimate of $16.37 billion. During the same period last year, the business posted $2.13 EPS. Merck & Co., Inc.’s revenue was up 5.1% on a year-over-year basis. Merck & Co., Inc. has set its FY 2026 guidance at 2.660-2.760 EPS. Analysts anticipate that Merck & Co., Inc. will post 2.76 EPS for the current fiscal year.

Merck & Co., Inc. Announces Dividend The company also recently announced a quarterly dividend, which will be paid on Wednesday, October 7th. Stockholders of record on Tuesday, September 15th will be issued a dividend of $0.85 per share. The ex-dividend date of this dividend is Tuesday, September 15th. This represents a $3.40 dividend on an annualized basis and a dividend yield of 2.2%. Merck & Co., Inc.’s dividend payout ratio (DPR) is currently 272.00%.

Analyst Ratings Changes MRK has been the topic of a number of research analyst reports. Cantor Fitzgerald reaffirmed a “neutral” rating and set a $120.00 price target on shares of Merck & Co., Inc. in a research report on Monday, July 6th. Jefferies Financial Group lowered Merck & Co., Inc. from a “strong-buy” rating to a “hold” rating in a research report on Wednesday. Citigroup began coverage on Merck & Co., Inc. in a research note on Wednesday, May 6th. They set a “neutral” rating and a $125.00 target price for the company. JPMorgan Chase & Co. raised their target price on shares of Merck & Co., Inc. from $135.00 to $140.00 and gave the stock an “overweight” rating in a report on Monday, July 13th. Finally, Weiss Ratings lowered shares of Merck & Co., Inc. from a “hold (c)” rating to a “hold (c-)” rating in a research note on Tuesday, August 11th. Fifteen investment analysts have rated the stock with a Buy rating and eight have issued a Hold rating to the stock. According to data from MarketBeat.com, Merck & Co., Inc. presently has an average rating of “Moderate Buy” and a consensus price target of $144.10.

Get Our Latest Stock Analysis on Merck & Co., Inc.

About Merck & Co., Inc. (Free Report)

Merck & Co, Inc is a global biopharmaceutical company engaged in the discovery, development, manufacture and marketing of prescription medicines, vaccines, biologic therapies and animal health products. Its portfolio spans multiple therapeutic areas with a particular emphasis on oncology, vaccines and infectious disease, as well as therapies for metabolic and chronic conditions. Among its well-known products are the cancer immunotherapy Keytruda (pembrolizumab) and the human papillomavirus vaccine Gardasil; the company also markets a range of medicines and vaccines for veterinary use through Merck Animal Health.

Founded in the late 19th century as the U.S.

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For years, Moderna, Inc‘s (NASDAQ:MRNA) biggest challenge wasn’t developing new medicines — it was convincing investors that it could thrive after COVID-19. The company’s vaccine transformed it into one of the world’s most recognizable biotech names, but as the pandemic demand faded, so did its revenue and stock price.

Now, a breakthrough in cancer treatment may finally give Moderna the second act investors have been waiting for.

COVID Turned Moderna Into a Biotech Powerhouse, Then Came the Hard PartRevenue climbed to nearly $19 billion in 2021 and $20 billion in 2022 from just about $800 million in 2020, in the wake of its COVID-19 vaccine, turning the once little-known biotech into one of the industry’s biggest success stories. Once the COVID-19 hype died down, revenue again stalled back to about $7 billion in 2023 and is being reported lower each year. In 2025, Moderna fell short of breaching $2 billion in annual revenue.

This drop left investors questioning whether the company could build another meaningful business beyond the COVID-19 vaccine. While the company continued investing billions of dollars across vaccines and therapeutics, Wall Street largely viewed it as a business searching for a successor to its pandemic blockbuster.

Read Next

The Cancer Breakthrough Changes the ConversationThat narrative shifted this week.

Moderna and Merck & Co Inc. (NYSE:MRK) announced that their personalized mRNA cancer vaccine met the primary endpoints in a Phase 3 melanoma trial, marking the first mRNA-based cancer treatment to demonstrate success in a Phase 3 trial. The treatment is designed by analyzing a patient’s tumor and creating a customized vaccine that helps the immune system recognize and attack remaining cancer cells after surgery.

More importantly for investors, the melanoma result is about more than one drug. It provides Moderna with its strongest clinical evidence yet that its mRNA platform could have applications beyond infectious diseases. The company is already studying the same personalized approach in other cancers, including lung, bladder and kidney, giving investors a glimpse of a much larger opportunity if the technology continues to deliver.

Investment TakeawayThe market’s reaction wasn’t simply a celebration of a promising melanoma treatment. It reflected a broader shift in how investors may begin to value Moderna. For the first time since the pandemic boom faded, the company has a compelling answer to the question that has defined its investment story: what comes next?

The Phase 3 success does not guarantee commercial success, and investors will still want to see detailed trial data and progress in other cancers. But if this breakthrough proves to be the first validation of a broader oncology platform, COVID-19 may be remembered as the chapter that made Moderna famous — while cancer becomes the one that defines its future.

Read Next

Image via Shutterstock

© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Merck & Company, Inc‘s (NYSE:MRK) latest commitment to personalized cancer vaccines is sending a message that extends well beyond Moderna, Inc. (NASDAQ:MRNA).

By deepening its investment in individualized mRNA cancer therapies, Rahway, New Jersey-based Merck is reinforcing its conviction that personalized oncology could become one of the pharmaceutical industry’s biggest growth opportunities. That also raises the competitive stakes for Pfizer, Inc (NYSE:PFE), whose partnership with BioNTech SE (NASDAQ:BNTX) is pursuing a similar vision.

Merck Is Moving Aggressively in Personalized Cancer VaccinesMerck announced an expanded collaboration with Moderna centered on individualized neoantigen therapy, further strengthening a partnership that already produced one of the industry’s most closely watched experimental cancer vaccines.

The companies’ lead candidate, mRNA-4157 (V940), is being evaluated alongside Merck’s blockbuster immunotherapy Keytruda across multiple tumor types. Earlier studies showed the combination significantly reduced the risk of recurrence or death in patients with high-risk melanoma, encouraging both companies to broaden development into additional cancers.

The latest agreement underscores Merck’s willingness to commit more capital to a technology it believes could reshape cancer treatment over the coming decade.

Read Next

Why Pfizer’s Cancer Vaccine Strategy Is Back in FocusPfizer has its own oncology ambitions. The New York-based company joined BioNTech to develop individualized mRNA cancer immunotherapies, including BNT122, a personalized vaccine designed to train a patient’s immune system to recognize mutations unique to their tumor. The companies are studying the candidate across multiple cancers as they seek to replicate the promise personalized vaccines have shown in early clinical studies.

While the scientific approaches differ across programs, the strategic objective is similar: use mRNA technology to create patient-specific treatments that complement existing immunotherapies rather than replace them.

Merck’s latest move suggests competition in that market is only intensifying.

The Race Is Bigger Than Merck, Moderna and PfizerThe renewed focus on cancer vaccines also reflects a broader shift in how large pharmaceutical companies view mRNA technology after the COVID-19 pandemic.

Rather than relying on infectious disease vaccines alone, companies are increasingly investing in oncology, where personalized therapies could unlock entirely new markets if ongoing clinical trials succeed.

Analysts have long viewed cancer vaccines as one of the most promising long-term applications of mRNA, although the field remains dependent on clinical data that could take years to mature.

What Pfizer Investors Should Watch NextFor Pfizer investors, Merck’s latest move is less about today’s headlines than tomorrow’s competitive landscape. The company remains a major player in personalized cancer vaccines through its partnership with BioNTech, but Merck’s accelerating commitment underscores how quickly the race is evolving.

Future clinical trial results, regulatory milestones and additional partnership investments are likely to determine which companies emerge as leaders in what many believe could become the next major chapter for mRNA medicine.

Read Next

Pfizer-Photo via Shutterstock

© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Merck will leverage SCRI’s Accelero™ delivery model to streamline trial operations with the goal of expanding patient access to cancer clinical research in the community setting

NASHVILLE, Tenn.--(BUSINESS WIRE)--Sarah Cannon Research Institute (SCRI), one of the world’s leading oncology research organizations conducting community-based clinical trials, announced a strategic collaboration with Merck, known as MSD outside the United States and Canada, to utilize SCRI’s Accelero™ delivery model designed to expand patient access to oncology clinical trials at community-based sites across the U.S.

The oncology clinical research landscape is rapidly evolving, as study designs become more complex, patient eligibility criteria more precise, and the heightened urgency to bring breakthrough science to patients faster continues to grow. These dynamics require modern clinical trial delivery models that are more efficient, data-enabled, and accessible for patients in community settings. SCRI and Merck are working together to address the challenges by advancing a scalable approach to oncology trial execution.

“At Merck, we are focused on advancing research to better understand cancer and potential therapeutic approaches. By leveraging the Accelero™ delivery model, we have the potential to reach patients faster, reduce protocol complexity, and make oncology clinical studies more accessible in the communities where patients live,” said Jennifer Coppola, Associate Vice President and Regional Head for Global Clinical Trial Operations of North America at Merck Research Laboratories.

Through Accelero™, SCRI uses a streamlined operating model to improve the speed and efficiency of oncology drug development. SCRI works closely with its physician network and industry partners to identify specific challenges and tailor fit-for-purpose solutions, including EHR-to-EDC data transfer across portfolios, accelerated site start-up and increased enrollment on high-priority studies. With select industry partners, Accelero™ has delivered site activations up to 50 percent faster than traditional operations, enrollment rates 19 percent higher than the 7 percent national average, and 95 percent fewer data changes than traditional clinical research coordinator data entry processes.1

“Merck has helped shape the modern era of cancer treatment, and we share a commitment to advance the next generation of cancer medicines through innovative approaches,” said Dee Anna Smith, Chief Executive Officer of SCRI. “Together, we are committed to accelerating trial delivery, reduce operational friction, and bring research to patients.”

About Sarah Cannon Research Institute (SCRI)
Sarah Cannon Research Institute (SCRI) is one of the world’s leading oncology research organizations conducting community-based clinical trials. Focused on advancing therapies for patients over the last three decades, SCRI is a leader in drug development. It has conducted more than 900 first-in-human clinical trials since its inception and contributed to pivotal research that has led to the majority of new cancer therapies approved by the FDA in the past decade. SCRI’s research network brings together approximately 1,500 oncology physicians who provide access to clinical trials in SCRI’s research network of over 200 locations in more than 20 states across the U.S. Visit SCRI.com to learn more.

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Merck & Co., Inc. (MRK) Q2 2026 Earnings Call August 4, 2026 9:00 AM EDT

Company Participants

Peter Dannenbaum - Vice President of Investor Relations
Robert Davis - Chairman, President & CEO
Caroline Litchfield - Executive VP & CFO
Dean Li - Executive VP & President of Merck Research Laboratories

Conference Call Participants

Akash Tewari - Jefferies LLC, Research Division
Umer Raffat - Evercore ISI Institutional Equities, Research Division
Terence Flynn - Morgan Stanley, Research Division
Michael Yee - UBS Investment Bank, Research Division
Geoffrey Meacham - Citigroup Inc., Research Division
Christopher Schott - JPMorgan Chase & Co, Research Division
Courtney Breen - Bernstein Institutional Services LLC, Research Division
Jason Gerberry - BofA Securities, Research Division
Mohit Bansal - Wells Fargo Securities, LLC, Research Division
Evan Seigerman - BMO Capital Markets Equity Research
Asad Haider - Goldman Sachs Group, Inc., Research Division
Luisa Hector - Joh. Berenberg, Gossler & Co. KG, Research Division

Presentation

Operator

Thank you for standing by. Welcome to Merck & Company, Inc., Rahway, New Jersey USA, Second Quarter Sales and Earnings Conference Call. [Operator Instructions] This call is being recorded. If you have any objections, you may disconnect at this time.

I would now like to turn the call over to Mr. Peter Dannenbaum, Senior Vice President, Investor Relations. Sir, you may begin.

Peter Dannenbaum
Vice President of Investor Relations

Thank you, Shirley, and good morning, everyone. Welcome to the Second Quarter 2026 Conference Call for Merck & Company, Inc., Rahway, New Jersey USA. Speaking on today's call will be Rob Davis, Chairman and Chief Executive Officer; Caroline Litchfield, Chief Financial Officer; and Dr. Dean Li, President of Research Labs.

Before we get started, I'd like to point out that we have items in our GAAP results such as acquisition-related charges, restructuring costs and other items that we have excluded from our non-GAAP results. There is a reconciliation in our press

Sales Growth Reflects Continued Strength in Oncology, Including Initial Uptake of KEYTRUDA QLEX, and Animal Health, Plus Contributions From Launches Such as WINREVAIR

Financial Highlights

Total Worldwide Sales Were $16.6 Billion (5% Growth; 4% Growth ex-FX) KEYTRUDA/KEYTRUDA QLEX1 Sales Were $8.4 Billion (5% Growth; 4% Growth ex-FX); Includes KEYTRUDA QLEX Sales of $463 Million WINREVAIR Sales Were $588 Million (75% Growth; 75% Growth ex-FX) Animal Health Sales Were $1.8 Billion (8% Growth; 5% Growth ex-FX) GAAP Loss per Share Was $0.54; Non-GAAP Loss per Share Was $0.13; GAAP and Non-GAAP Loss per Share Include a Charge of $2.31 per Share for the Acquisition of Terns Pipeline & Portfolio Highlights

Received U.S. FDA Approval for LIPFENDRA (enlicitide), the First and Only Once-Daily Oral PCSK9 Inhibitor To Reduce LDL-C in Adults With Hypercholesterolemia Announced Positive Data From TroFuse-005 Trial Evaluating Sacituzumab Tirumotecan (sac-TMT) in Certain Patients With Advanced or Recurrent Endometrial Cancer Announced Positive Phase 3 Results From Once-Weekly Investigational Oral HIV Treatment Regimen of Islatravir and Lenacapavir, in Collaboration With Gilead Full-Year 2026 Financial Outlook

Narrows and Raises Expected Worldwide Sales Range To Be Between $66.3 Billion and $67.3 Billion Now Expects Non-GAAP EPS To Be Between $2.66 and $2.76; Outlook Includes Charges of $2.43 per Share for the Acquisition of Terns, Comprised of a One-Time Charge of $2.31 per Share as Well as Costs of Approximately $0.12 per Share To Finance the Acquisition and Advance MK-4208 (Formerly TERN-701) 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 second quarter of 2026.

“We continued to make substantial progress across our business this quarter, driven by strong execution and growing contributions from new product launches,” said Robert M. Davis, chairman and chief executive officer. “The FDA approval of LIPFENDRA is an exciting moment for our company and for patients, marking the latest milestone in our nearly 70-year legacy in cardiovascular disease. Together with key regulatory and clinical advances across oncology, HIV and immunology, this achievement reflects the strength of our pipeline and portfolio transformation as we bring forward the next wave of innovation. I am confident in the ongoing execution of our strategy as we deliver for patients and further enhance our long-term growth trajectory.”

Financial Summary

$ in millions, except EPS amounts

Second Quarter

2026 

2025 

Change

Change Ex-

Exchange

Sales

$16,607 

$15,806 

5% 

4% 

GAAP net (loss) income2

(1,335) 

4,427 

N/M 

N/M 

Non-GAAP net (loss) income that excludes certain items2,3*

(330) 

5,366 

N/M 

N/M 

GAAP EPS

(0.54) 

1.76 

N/M 

N/M 

Non-GAAP EPS that excludes certain items3*

(0.13) 

2.13 

N/M 

N/M 

*Refer to table on page 7.

N/M - Not meaningful

For the second quarter of 2026, Generally Accepted Accounting Principles (GAAP) loss / earnings per share (EPS) assuming dilution was a loss per share of $0.54 and non-GAAP loss per share was $0.13. Both the GAAP and non-GAAP loss per share were due to a charge for the acquisition of Terns Pharmaceuticals, Inc. (Terns) of $2.31 per share. Both GAAP and non-GAAP EPS in the second quarter of 2025 include a charge of $0.07 per share for an upfront payment related to a license agreement with Jiangsu Hengrui Pharmaceutical Co., Ltd. (Hengrui Pharma).

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 second quarter of 2025 also excludes tax benefits primarily resulting from favorable audit reserve adjustments.

Year-to-date results can be found in the attached tables.

Second-Quarter Sales Performance
The following table reflects sales of the Company’s top products and significant performance drivers.

Second Quarter

$ in millions

2026 

2025 

Change

Change Ex-Exchange

Commentary

Total Sales

$16,607 

$15,806 

5% 

4% 

Pharmaceutical

14,760 

14,050 

5% 

4% 

Increase primarily driven by growth in oncology as well as cardiometabolic and respiratory, partially offset by a decline in diabetes.

KEYTRUDA/
KEYTRUDA QLEX

8,366 

7,956 

5% 

4% 

Growth primarily driven by strong global uptake in earlier-stage indications, including triple-negative breast cancer (TNBC), cervical cancer, head and neck cancer and bladder cancer, as well as higher global demand in metastatic indications, including urothelial cancer. Sales of KEYTRUDA QLEX were $463 million.

GARDASIL/
GARDASIL 9

1,169 

1,126 

4% 

3% 

Increase primarily due to higher demand in Asia Pacific and Europe, as well as favorable timing of tenders in Europe, partially offset by lower demand in certain other international markets.

PROQUAD, M-M-R II and VARIVAX

592 

609 

-3% 

-3% 

Decrease primarily reflects lower demand in the U.S., partially offset by higher net pricing in the U.S., higher demand in Europe and favorable private-sector purchasing patterns for M-M-R II in the U.S.

WINREVAIR

588 

336 

75% 

75% 

Growth primarily reflects continued uptake in the U.S. and early launch uptake in certain international markets, particularly in Japan and Europe.

BRIDION

497 

461 

8% 

8% 

Growth primarily due to higher demand and net pricing in the U.S.

JANUVIA/JANUMET

429 

623 

-31% 

-31% 

Decline primarily due to lower demand and net pricing in the U.S. due to competition, as well as lower demand in China and most other international markets due to ongoing generic competition.

Lynparza*

365 

370 

-1% 

-2% 

Relatively flat compared with prior year.

PREVYMIS

295 

228 

29% 

28% 

Increase primarily due to higher demand in the U.S. and certain European markets, reflecting in part the launch of new indications.

Lenvima*

283 

265 

7% 

6% 

Growth primarily due to higher demand in the U.S., partially offset by lower net pricing.

WELIREG

271 

162 

67% 

67% 

Growth primarily driven by higher demand in the U.S. and continued launch uptake in several international markets, particularly in Japan, as well as favorable wholesaler purchasing patterns in the U.S.

OHTUVAYRE

204 

- 

- 

- 

Product obtained as part of the Company’s October 2025 acquisition of Verona Pharma plc. Includes a benefit from the timing of specialty pharmacy purchases in the U.S.

CAPVAXIVE

184 

129 

42% 

40% 

Increase primarily driven by launch uptake in several international markets, particularly in Asia Pacific and Europe, as well as in the U.S.

VAXNEUVANCE

148 

229 

-35% 

-36% 

Decline primarily due to favorable prior period public-sector activity in the U.S., which increased sales in that period, as well as lower demand in the U.S. and in most international markets in the current period due to competitive pressure.

LAGEVRIO

5 

83 

-95% 

-95% 

Decline largely due to lower demand in Japan and the U.S.

Animal Health

1,775 

1,646 

8% 

5% 

Growth attributable to both Livestock and Companion Animal product portfolios.

Livestock

1,041 

961 

8% 

6% 

Growth primarily driven by higher demand for ruminant and poultry products.

Companion Animal

734 

685 

7% 

5% 

Growth primarily due to new product launches. Sales of BRAVECTO line of products were $359 million and $335 million in the current and prior-year quarters, respectively, which represents an increase of 7%, or 4% excluding impact of foreign exchange.

Other Revenues**

72 

110 

-35% 

-34% 

Decline primarily due to 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.

Second-Quarter Expense and Related Information
The table below presents selected expense information.

$ in millions

GAAP

Acquisition-
and
Divestiture-
Related Costs4

Restructuring
Costs

(Income)
Loss From
Investments
in Equity
Securities

Non-
GAAP3

Second Quarter 2026

Cost of sales

$4,395 

$1,067 

$184 

$- 

$3,144 

Selling, general and administrative

2,904 

17 

- 

- 

2,887 

Research and development

9,741 

6 

(1) 

- 

9,736 

Restructuring costs

151 

- 

151 

- 

- 

Other (income) expense, net

99 

- 

- 

(191) 

290 

Second Quarter 2025

Cost of sales

$3,557 

$576 

$165 

$- 

$2,816 

Selling, general and administrative

2,649 

15 

1 

- 

2,633 

Research and development

4,048 

3 

53 

- 

3,992 

Restructuring costs

560 

- 

560 

- 

- 

Other (income) expense, net

(7) 

- 

- 

(61) 

54 

GAAP Expense, EPS and Related Information
Gross margin was 73.5% for the second quarter of 2026 compared with 77.5% for the second quarter of 2025. The decrease was primarily due to higher amortization of intangible assets and inventory write-downs.

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

Research and development (R&D) expenses were $9.7 billion in the second quarter of 2026 compared with $4.0 billion in the second quarter of 2025. The increase was largely due to a $5.7 billion charge for the acquisition of Terns and higher clinical development spending, partially offset by a $200 million reduction in R&D expenses as part of a funding agreement with Blackstone Life Sciences (Blackstone). R&D expenses in the second quarter of 2025 include a $200 million charge for an upfront payment related to a license agreement with Hengrui Pharma.

Other (income) expense, net, was $99 million of expense in the second quarter of 2026 compared with $7 million of income in the second quarter of 2025. The unfavorability was primarily due to higher net interest expense, partially offset by higher net income from investments in equity securities.

The income tax provision for the second quarter of 2026 was $654 million on a pretax loss of $683 million, resulting in an effective income tax rate of (95.9)%. This effective income tax rate includes a 108.9 percentage point unfavorable impact of the charge for the acquisition of Terns, for which no tax benefit was recorded.

GAAP loss per share was $0.54 for the second quarter of 2026 compared with earnings per share of $1.76 for the second quarter of 2025, largely due to higher charges for business development transactions, reflecting a $2.31 per share charge in the second quarter of 2026 for the acquisition of Terns compared with a $0.07 per share charge in the second quarter of 2025 related to a license agreement with Hengrui Pharma.

Non-GAAP Expense, EPS and Related Information
Non-GAAP gross margin was 81.1% for the second quarter of 2026 compared with 82.2% for the second quarter of 2025. The decrease was primarily due to higher inventory write-downs.

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

Non-GAAP R&D expenses were $9.7 billion in the second quarter of 2026 compared with $4.0 billion in the second quarter of 2025. The increase was largely due to a $5.7 billion charge for the acquisition of Terns 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 second quarter of 2025 include a $200 million charge for an upfront payment related to a license agreement with Hengrui Pharma.

Non-GAAP other (income) expense, net, was $290 million of expense in the second quarter of 2026 compared with $54 million of expense in the second quarter of 2025. The unfavorability was primarily due to higher net interest expense.

The non-GAAP income tax provision for the second quarter of 2026 was $882 million on pretax income of $550 million, resulting in a non-GAAP effective income tax rate of 160.3%. This effective income tax rate includes a 146.2 percentage point unfavorable impact of the charge for the acquisition of Terns, for which no tax benefit was recorded.

Non-GAAP loss per share was $0.13 for the second quarter of 2026 compared with earnings per share of $2.13 for the second quarter of 2025, largely due to higher charges for business development transactions, reflecting a $2.31 per share charge in the second quarter of 2026 for the acquisition of Terns compared with a $0.07 per share charge in the second quarter of 2025 related to a license agreement with Hengrui Pharma.

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

Second Quarter

$ in millions, except EPS amounts

2026 

2025 

EPS

GAAP EPS

$(0.54) 

$1.76 

Difference

0.41 

0.37 

Non-GAAP EPS that excludes items listed below3

$(0.13) 

$2.13 

Net (Loss) Income

GAAP net (loss) income2

$(1,335) 

$4,427 

Difference

1,005 

939 

Non-GAAP net (loss) income that excludes items listed below2,3

$(330) 

$5,366 

Excluded Items:

Acquisition- and divestiture-related costs4

$1,090 

$594 

Restructuring costs

334 

779 

Income from investments in equity securities

(191) 

(61) 

Increase to net loss / decrease to net income before taxes

1,233 

1,312 

Estimated income tax benefit5

(228) 

(373) 

Increase to net loss / decrease to net income

$1,005 

$939 

Pipeline and Portfolio Highlights

In the second quarter, the Company achieved key regulatory milestones across the portfolio while continuing to advance its broad and diverse pipeline.

Oncology: U.S. Food and Drug Administration (FDA) approved KEYTRUDA and KEYTRUDA QLEX, each with WELIREG, for the adjuvant treatment of certain patients with clear cell renal cell carcinoma (ccRCC), based on Phase 3 LITESPARK-022 trial. Approvals represent first approved combination of a PD-1 and hypoxia-inducible factor-2 alpha inhibitor for these patients. In July, FDA approved expanded use of KEYTRUDA and KEYTRUDA QLEX, each with Padcev, as treatment before and after surgery for adult patients with muscle-invasive bladder cancer (MIBC), including cisplatin eligible patients based on Phase 3 KEYNOTE-B15 trial; the expansion builds upon prior approval of this regimen for cisplatin ineligible patients based on Phase 3 KEYNOTE-905 trial. FDA approved KEYTRUDA and KEYTRUDA QLEX, each with Trodelvy, for the first-line treatment of PD-L1 positive (Combined Positive Score [CPS] ≥10) advanced TNBC, based on Phase 3 KEYNOTE-D19/ASCENT-04 trial. FDA granted Breakthrough Therapy designation (BTD) for calderasib (MK-1084), an investigational oral specific KRAS G12C inhibitor, in combination with KEYTRUDA, for the first-line treatment of patients with advanced or metastatic non-small cell lung cancer (NSCLC) with KRAS G12C-mutation and expressing PD-L1 (tumor proportion score [TPS] ≥1%). Announced that Phase 3 TroFuse-005 trial evaluating sac-TMT, an investigational anti-TROP2 antibody-drug conjugate (ADC) being developed in collaboration with Kelun-Biotech, met its primary endpoints of overall survival (OS) and progression-free survival (PFS) in patients with advanced or recurrent endometrial cancer who have progressed after platinum-based chemotherapy and anti-PD-1/L1 immunotherapy. First Phase 3 results from the Company’s broad sac-TMT clinical development program, which includes 17 ongoing global Phase 3 trials across multiple tumor types. At the 2026 American Society of Clinical Oncology (ASCO) Annual Meeting, new research was presented across over 25 types of cancer, reinforcing long-term impact of KEYTRUDA and momentum in the Company’s rapidly advancing oncology pipeline, including: Five-year follow-up data from Phase 2b KEYNOTE-942 trial, in collaboration with Moderna, underscoring continued potential of intismeran autogene (mRNA-4157/V940) in combination with KEYTRUDA for patients with stage III/IV melanoma following complete resection. Data from Phase 3 OptiTROP-Lung05 trial, led by Kelun-Biotech, evaluating sac-TMT plus KEYTRUDA in China, adding to ongoing research of novel treatment approaches for patients with NSCLC. Results from final analysis of KEYNOTE-522 evaluating KEYTRUDA in combination with chemotherapy, reporting a continued survival benefit for patients with high-risk early-stage TNBC. Vaccines and Infectious Diseases: In July, presented new data for daily and weekly options across HIV treatment and prevention pipeline at 26th International AIDS Conference (AIDS 2026). Hosted HIV investor event to highlight these data. In collaboration with Gilead, presented first Phase 3 results for islatravir/lenacapavir (ISL/LEN), an investigational oral once-weekly single-tablet HIV treatment regimen, which maintained virological suppression in adults with HIV who switched antiretroviral therapy. ISL/LEN has the potential to be the first approved oral, once-weekly HIV treatment. Presented first results from a Phase 2b study evaluating switch to investigational once-weekly oral islatravir and ulonivirine (ISL/ULO) in adults with virologically suppressed HIV-1. Received regulatory approvals in Japan and China for ENFLONSIA for the prevention of RSV lower respiratory tract disease in newborns and infants who are born during or entering their first RSV season. Cardiometabolic and Respiratory: In July, FDA approved LIPFENDRA (enlicitide), the first and only once-daily oral PCSK9 inhibitor, as an adjunct to diet and exercise, to reduce LDL-C in adults with hypercholesterolemia, based on two Phase 3 trials from the CORALreef clinical program: CORALreef Lipids and CORALreef HeFH. At week 24, LIPFENDRA significantly reduced LDL-C by a placebo-adjusted 56% and 59%, respectively. Immunology: Announced positive topline results from Phase 3 ATLAS-UC induction-only study (Study 2) evaluating tulisokibart (MK-7240), an investigational humanized monoclonal antibody targeting tumor necrosis factor-like cytokine 1A (TL1A), in patients with moderately to severely active ulcerative colitis (UC). Initial topline results from primary analyses of two Phase 2 studies evaluating tulisokibart: In hidradenitis suppurativa (HS), the study met its primary and key secondary endpoints. Full results will be shared at an upcoming medical meeting. In systemic sclerosis-associated interstitial lung disease (SSc-ILD), the study did not meet its primary endpoint and will be discontinued. No new safety concerns were identified. Business Development: Completed acquisition of Terns for $6.8 billion. Added MK-4208, a novel investigational oral allosteric BCR::ABL1 tyrosine kinase inhibitor recently granted BTD by the FDA for the treatment of certain adults with Philadelphia chromosome-positive chronic myeloid leukemia. 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.*

Oncology

FDA Approved KEYTRUDA and KEYTRUDA QLEX, Each With WELIREG, for Adjuvant Treatment of Certain Patients With ccRCC; Based on Results From Phase 3 LITESPARK-022 Trial

FDA Approved KEYTRUDA and KEYTRUDA QLEX, Each With Padcev, as Treatment Before and After Surgery for Adults With MIBC; Based on Results From Phase 3 KEYNOTE-B15 Trial, Combined With Previous Approvals Based on Phase 3 KEYNOTE-905 Trial

FDA Approved KEYTRUDA and KEYTRUDA QLEX, Each With Trodelvy, as First-Line Treatment of PD-L1+ Advanced TNBC; Based on Results From Phase 3 KEYNOTE-D19/ASCENT-04 Trial

European Commission Approved KEYTRUDA Plus Padcev as First PD-1 Inhibitor Plus ADC Regimen for Adults With Cisplatin-Ineligible Resectable MIBC; Based on Results From Phase 3 KEYNOTE-905 Trial

FDA Granted BTD for Calderasib (MK-1084), an Investigational KRAS G12C Inhibitor, for Certain Patients With Newly Diagnosed Metastatic KRAS G12C-Mutant NSCLC

The Company Announced TroFuse-005 Trial Evaluating Sac-TMT Met Primary Endpoints of OS and PFS in Certain Patients With Advanced or Recurrent Endometrial Cancer

The Company and Moderna Presented 5-Year Data for Intismeran Autogene in Combination With KEYTRUDA in Patients With High-Risk Stage III/IV Melanoma Following Complete Resection at ASCO 2026

KEYTRUDA as Monotherapy Significantly Improved PFS in Certain Patients With Advanced or Recurrent Endometrial Cancer With Mismatch Repair Deficient Tumors Compared to Chemotherapy; Results From Phase 3 KEYNOTE-C93 Trial

The Company Highlighted New Long-Term Data and Advancements Across Broad Oncology Portfolio and Pipeline Research at ASCO 2026

The Company Completed Acquisition of Terns

Vaccines and
Infectious Diseases

The Company, in Collaboration With Gilead, Announced That the Once-Weekly Investigational Oral HIV Treatment Regimen of Islatravir and Lenacapavir (ISL/LEN) Maintained Virological Suppression in People With HIV Who Switched Antiretroviral Therapy

The Company Presented New Data on Daily, Weekly and Monthly Options Across its HIV Treatment and Prevention Pipeline at AIDS 2026

The Company Announced Initial Access Plans for Alimatravir (MK-8527), Its Investigational Once-Monthly Oral Pre-Exposure Prophylaxis in Phase 3 Development; Multi-Faceted Strategy Aims To Enable Rapid, Broad and Sustainable Access to Alimatravir, if Approved, in Low- And Middle-Income Countries

The Company Announced New Agreement With AIDS Drug Assistance Program Crisis Task Force To Improve Access and Care for People Living With HIV

FDA Approved an Additional Indication for CAPVAXIVE in Children and Adolescents Aged 2 Through 17 at Increased Risk for Pneumococcal Disease; Based on Results From Phase 3 STRIDE-13 Trial

Cardiometabolic and Respiratory

FDA Approved LIPFENDRA, the First and Only Once-Daily Oral PCSK9 Inhibitor To Reduce LDL-C in Adults With Hypercholesterolemia; Based on Results From CORALreef Lipids and CORALreef HeFH Trials

Immunology

Tulisokibart Met Primary and Key Secondary Endpoints in the Phase 3 ATLAS-UC Induction-only Study in Patients With Moderately to Severely Active UC

Animal Health

The Company’s Animal Health Business Completed Acquisition of TARGAN, Broadening Its Commercial Poultry Portfolio Through TARGAN’s Innovative High-Speed Biodevice Technology

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

Upcoming Investor Event
The Company will hold an Oncology Investor Event to coincide with the European Society for Medical Oncology Congress 2026 on Monday, Oct. 26, 2026, at 6 p.m. CET / 1 p.m. EDT, during which senior management will provide an update on the Company’s oncology strategy and program. The event will take place in Madrid, Spain, and will be accessible via live audio webcast at this weblink.

Full-Year 2026 Financial Outlook
The following table summarizes the Company’s full-year financial outlook.

Full Year 2026

Updated

Prior

Sales*

$66.3 billion to $67.3 billion

$65.8 billion to $67.0 billion

Non-GAAP Gross margin3

Approximately 81%

Approximately 82%

Non-GAAP Operating expenses3**

$42.0 billion to $42.7 billion

$36.0 billion to $36.8 billion

Non-GAAP Other (income) expense, net3

Approximately $1.4 billion expense

Approximately $1.3 billion expense

Non-GAAP Effective income tax rate3

35.0% to 36.0%

23.5% to 24.5%

Non-GAAP EPS3***

$2.66 to $2.76

$5.04 to $5.16

Share count (assuming dilution)

Approximately 2.48 billion

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) and $5.7 billion for the acquisition of Terns. 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 and $2.31 per share for the acquisition of Terns.

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 is raising and narrowing the range for its full-year sales outlook and now anticipates full-year 2026 sales to be between $66.3 billion and $67.3 billion, including a positive impact from foreign exchange of approximately 1% at mid-July 2026 exchange rates.

The Company now expects the full-year non-GAAP effective income tax rate to be between 35.0% and 36.0%, 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 $2.66 and $2.76, including a positive impact from foreign exchange of approximately $0.15 per share at mid-July 2026 exchange rates. This range includes one-time charges of $9.0 billion, or $3.62 per share, related to the acquisition of Cidara and $5.7 billion, or $2.31 per share, related to the acquisition of Terns. This range also includes costs of approximately $0.12 per share to finance the Terns acquisition and advance MK-4208. The charges related to Terns were 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 Tuesday, Aug. 4, 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)
JANUMET (sitagliptin and metformin HCl)
JANUVIA (sitagliptin)
KEYTRUDA (pembrolizumab)
KEYTRUDA QLEX (pembrolizumab and berahyaluronidase alfa-pmph)
LAGEVRIO (molnupiravir)
Lenvima (lenvatinib)
LIPFENDRA (enlicitide)
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)
VAXNEUVANCE (Pneumococcal 15-valent Conjugate Vaccine)
WELIREG (belzutifan)
WINREVAIR (sotatercept-csrk)

Animal Health
BRAVECTO (fluralaner)

MERCK & CO., INC., RAHWAY, N.J., USA CONSOLIDATED STATEMENT OF OPERATIONS - GAAP (AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES) (UNAUDITED) Table 1     GAAP

% Change GAAP % Change   2Q26

2Q25

June YTD 2026 June YTD 2025     Sales $

16,607

$

15,806

5%

$

32,893

$

31,335

5%

Costs, Expenses and Other Cost of sales 4,395

3,557

24%

8,590

6,976

23%

Selling, general and administrative 2,904

2,649

10%

5,604

5,202

8%

Research and development 9,741

4,048

*

22,333

7,669

*

Restructuring costs 151

560

-73%

346

629

-45%

Other (income) expense, net 99

(7

)

*

237

(43

)

*

(Loss) Income Before Taxes (683

)

4,999

*

(4,217

)

10,902

*

Income Tax Provision 654

571

1,363

1,388

Net (Loss) Income (1,337

)

4,428

*

(5,580

)

9,514

*

Less: Net (Loss) Income Attributable to Noncontrolling Interests (2

)

1

(5

)

8

Net (Loss) Income Attributable to Merck & Co., Inc., Rahway, N.J., USA $

(1,335

)

$

4,427

*

$

(5,575

)

$

9,506

*

(Loss) Earnings per Common Share Assuming Dilution (1) $

(0.54

)

$

1.76

*

$

(2.26

)

$

3.77

*

  Average Shares Outstanding Assuming Dilution (1) 2,470

2,513

2,471

2,522

Tax Rate -95.9

%

11.4

%

-32.3

%

12.7

%

    * 100% or greater     (1) Because the Company recorded a net loss in both the second quarter and first six months of 2026, no potential dilutive common shares were used in the computations of loss per common share assuming dilution as the effects would have been anti-dilutive. MERCK & CO., INC., RAHWAY, N.J., USA THREE AND SIX MONTHS ENDED JUNE 30, 2026 GAAP TO NON-GAAP RECONCILIATION (AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES) (UNAUDITED) Table 2a   GAAP Acquisition- and
Divestiture-Related
Costs (1) Restructuring Costs (2) (Income) Loss from
Investments in
Equity Securities Adjustment
Subtotal Non-GAAP   Second Quarter Cost of sales $

4,395

1,067

184

1,251

$

3,144

Selling, general and administrative 2,904

17

17

2,887

Research and development 9,741

6

(1

)

5

9,736

Restructuring costs 151

151

151

–

Other (income) expense, net 99

(191

)

(191

)

290

Loss Before Taxes (683

)

(1,090

)

(334

)

191

(1,233

)

550

Income Tax Provision (Benefit) 654

(219

)

(3)

(50

)

(3)

41

(3)

(228

)

882

Net Loss (1,337

)

(871

)

(284

)

150

(1,005

)

(332

)

Net Loss Attributable to Merck & Co., Inc., Rahway, N.J., USA (1,335

)

(871

)

(284

)

150

(1,005

)

(330

)

Loss per Common Share Assuming Dilution (4) $

(0.54

)

(0.35

)

(0.12

)

0.06

(0.41

)

$

(0.13

)

  Tax Rate -95.9

%

160.3

%

  June YTD Cost of sales $

8,590

2,081

421

2,502

$

6,088

Selling, general and administrative 5,604

49

49

5,555

Research and development 22,333

6

33

39

22,294

Restructuring costs 346

346

346

–

Other (income) expense, net 237

(371

)

(371

)

608

Loss Before Taxes (4,217

)

(2,136

)

(800

)

371

(2,565

)

(1,652

)

Income Tax Provision (Benefit) 1,363

(421

)

(3)

(135

)

(3)

80

(3)

(476

)

1,839

Net Loss (5,580

)

(1,715

)

(665

)

291

(2,089

)

(3,491

)

Net Loss Attributable to Merck & Co., Inc., Rahway, N.J., USA (5,575

)

(1,715

)

(665

)

291

(2,089

)

(3,486

)

Loss per Common Share Assuming Dilution (4) $

(2.26

)

(0.70

)

(0.27

)

0.12

(0.85

)

$

(1.41

)

  Tax Rate -32.3

%

-111.3

%

    Only the line items that are affected by non-GAAP adjustments are shown. The Company is providing certain non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. Management believes that providing non-GAAP information enhances investors’ understanding of the Company’s results because management uses non-GAAP measures to assess performance. Management uses non-GAAP measures internally for planning and forecasting purposes and to measure the performance of the Company along with other metrics. In addition, annual employee compensation, including senior management’s compensation, is derived in part using a non-GAAP pretax income metric. The non-GAAP information presented should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. (1) Amounts included in cost of sales reflect expenses for the amortization of intangible assets, as well as the recognition of fair value step-up of inventories related to the 2025 Verona Pharma plc acquisition. Amounts included in selling, general and administrative expenses reflect integration, transaction and certain other costs related to acquisitions and divestitures. (2) Amounts primarily include employee separation costs, accelerated depreciation and asset impairment charges associated with facilities to be closed or divested, as well as contractual termination costs, associated with activities under the Company's formal restructuring programs. (3) Represents the estimated tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments. (4) Because the Company recorded a net loss in both the second quarter and first six months of 2026, no potential dilutive common shares were used in the computations of loss per common share assuming dilution as the effects would have been anti-dilutive. MERCK & CO., INC., RAHWAY, N.J., USA FRANCHISE / KEY PRODUCT SALES (AMOUNTS IN MILLIONS) (UNAUDITED) Table 3   2026

2025

2Q

June YTD

1Q

2Q

June YTD

1Q

2Q

June YTD

3Q

4Q

Full Year

Nom %

Ex-Exch %

Nom %

Ex-Exch %

TOTAL SALES (1) $16,286

$16,607

$32,893

$15,529

$15,806

$31,335

$17,276

$16,400

$65,011

5

4

5

3

PHARMACEUTICAL 14,349

14,760

29,109

13,638

14,050

27,688

15,611

14,843

58,142

5

4

5

3

Oncology Keytruda 7,906

7,904

15,810

7,205

7,956

15,161

8,142

8,337

31,641

-1

-2

4

2

Keytruda Qlex 128

463

590

5

35

40

-

-

-

-

Alliance Revenue – Lynparza (2) 341

365

706

312

370

682

379

389

1,450

-1

-2

4

2

Alliance Revenue – Lenvima (2) 256

283

539

258

265

523

258

272

1,053

7

6

3

2

Welireg 199

271

470

137

162

300

196

220

716

67

67

57

56

Alliance Revenue – Reblozyl (3) 148

122

270

119

107

226

136

164

525

15

15

20

20

Vaccines (4) Gardasil/Gardasil 9 1,069

1,169

2,238

1,327

1,126

2,453

1,749

1,031

5,233

4

3

-9

-10

ProQuad/M-M-R II/Varivax 538

592

1,130

539

609

1,148

684

619

2,451

-3

-3

-2

-3

Vaxneuvance 202

148

350

230

229

459

226

140

825

-35

-36

-24

-26

RotaTeq 206

134

340

228

121

349

204

119

673

10

9

-3

-4

Capvaxive 142

184

325

107

129

236

244

279

759

42

40

38

36

Enflonsia 1

2

3

79

21

100

-

-

-

-

Cardiometabolic & Respiratory Winrevair 525

588

1,114

280

336

615

360

467

1,443

75

75

81

81

Ohtuvayre 131

204

335

178

178

-

-

-

-

Alliance Revenue - Adempas/Verquvo (5) 109

126

235

106

123

229

112

129

470

3

3

3

3

Adempas (6) 78

78

156

68

80

147

82

83

312

-2

-4

6

1

Infectious Diseases Bridion 472

497

969

441

461

902

439

499

1,841

8

8

7

7

Prevymis 272

295

568

208

228

436

266

275

978

29

28

30

27

Delstrigo 75

101

176

67

83

150

77

79

306

21

17

17

10

Zerbaxa 82

77

159

70

74

145

81

87

312

4

2

10

8

Isentress/Isentress HD 59

60

119

90

86

176

82

67

325

-30

-31

-32

-33

Dificid 34

22

56

83

96

179

43

25

247

-77

-77

-69

-69

Lagevrio 28

5

32

102

83

185

138

57

380

-95

-95

-82

-83

Diabetes Januvia 367

258

625

549

372

921

382

302

1,604

-31

-30

-32

-32

Janumet 207

171

378

247

251

498

243

199

940

-32

-33

-24

-25

Other Pharmaceutical (7) 774

641

1,416

865

703

1,568

1,004

770

3,340

-9

-9

-10

-11

ANIMAL HEALTH 1,791

1,775

3,566

1,588

1,646

3,234

1,615

1,505

6,354

8

5

10

6

Livestock 1,064

1,041

2,105

924

961

1,885

1,023

987

3,896

8

6

12

7

Companion Animal 727

734

1,461

664

685

1,349

592

518

2,458

7

5

8

4

Other Revenues (8) 146

72

218

303

110

413

50

52

515

-35

-34

-47

-6

Sum of quarterly amounts may not equal year-to-date amounts due to rounding. (1) Only select products are shown.           (2) Alliance Revenue represents the Company's share of profits, which are product sales net of cost of sales and commercialization costs.           (3) Alliance Revenue represents royalties. (4) Total Vaccines sales were $2,314 million and $2,361 million in the first and second quarter of 2026, respectively, and $2,607 million and $2,370 million in the first and second quarter of 2025, respectively. (5) Alliance Revenue represents the Company's share of profits from sales in Bayer's marketing territories, which are product sales net of cost of sales and commercialization costs. (6) Net product sales in the Company's marketing territories. (7) Includes Pharmaceutical products not individually shown above. Also reflects total alliance revenue for Koselugo of $161 million and $10 million in the first and second quarter of 2026, respectively, and $44 million and $43 million in the first and second quarter of 2025, respectively. (8) Other Revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities. Other Revenues related to the receipt of milestone payments for out-licensed products were $132 million and $0 million in the first and second quarter of 2026, respectively, and $95 million and $5 million in the first and second quarter of 2025, respectively.  More News From Merck & Co., Inc.

HomeEarnings AnalysisHealthcare 

SummaryMerck has extended Keytruda's lifecycle by launching subcutaneous Qlex, securing its exclusivity through 2039, and other extensions supporting market confidence.Recent regulatory approvals, promising pipeline updates, and two major acquisitions (Terns, Cidara) have broadened MRK’s oncology and virology portfolios.Analyst long-term EPS estimates have improved, but the stock’s 17% rally since the latest quarterly results and 2030–32 P/E of ~13.5 suggest the current valuation is fully justified.I maintain a HOLD rating, as risk-reward is less compelling post-rally, though MRK’s innovation and management execution remain strong. hapabapa/iStock Editorial via Getty Images

Intro As my last call on Merck (MRK) was about nine months ago in October, I think it’s the right time, ahead of the upcoming Q2 earnings release, to update my view on how the business

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

The Merck logo is seen at a gate to the Merck & Co campus in Rahway, New Jersey, U.S., July 12, 2018. REUTERS/Brendan McDermid/File Photo Purchase Licensing Rights, opens new tab

CompaniesJuly 24 (Reuters) - Merck (MRK.N), opens new tab said on Friday it signed seven voluntary licensing agreements with generic drug manufacturers to make and sell lower-cost versions ​of its experimental once-monthly oral HIV pill in 129 low- ‌and lower-middle-income countries.

The drug, alimatravir, is currently in late-stage development. Merck said it is investing early in its product manufacturing capacity as trials continue.

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Here are some ​details:

Merck said the agreements are with three sub-Saharan Africa manufacturers - ​Aspen Pharmacare Holdings, Quality Chemical Industries and UCL - and four ⁠Indian companies, which are Aurobindo, Cipla, Emcure and Viatris.

The royalty-free agreements ​with these companies cover both the public and private sectors and will ​enable supply of generic alimatravir in these 129 countries that account for a substantial majority of new HIV diagnoses globally, the drugmaker said.

"This is the first time ​that sub-Saharan African manufacturers have been included in licenses from the ​very beginning." said Gregg Szabo, head of Merck's global vaccines and infectious diseases unit.

Merck ‌is ⁠still enrolling patients to test alimatravir, which is expected to provide one month of protection from HIV-1 starting within one hour after dosing.

"We're likely not to have any trial results until the second half ​of next year, ​but this will ⁠give time for the generic licensees to start working to scale up their production" said Paul Schaper, ​head of global pharmaceutical public policy at Merck.

In 2024, ​Gilead Sciences (GILD.O), opens new tab ⁠granted royalty-free licenses to six generic drug manufacturers to make and sell cheaper copycat versions of its HIV prevention medicine, lenacapavir, in 120 low and ⁠lower-middle ​income countries.

The World Health Organization has urged ​governments and drugmakers to improve access to affordable HIV medicines, including through voluntary licensing and ​greater generic competition.

Reporting by Christy Santhosh in Bengaluru; Editing by Tasim Zahid

Our Standards: The Thomson Reuters Trust Principles., opens new tab

At week 24 in the CORALreef Lipids and CORALreef HeFH trials, LIPFENDRA significantly reduced LDL-C by a placebo-adjusted 56% and 59%, respectively

LIPFENDRA is a novel macrocyclic peptide that binds to PCSK9 and inhibits the interaction of PCSK9 with LDL receptors

RAHWAY, N.J.--(BUSINESS WIRE)--Merck (NYSE: MRK), known as MSD outside of the United States and Canada, today announced the U.S. Food and Drug Administration (FDA) has approved LIPFENDRA® (enlicitide) tablets 20 mg as an adjunct to diet and exercise to reduce low-density lipoprotein cholesterol (LDL-C) in adults with hypercholesterolemia, including heterozygous familial hypercholesterolemia (HeFH). LIPFENDRA is a novel macrocyclic peptide and is the first FDA-approved oral PCSK9 inhibitor shown to lower LDL-C, also known as bad cholesterol.

“By harnessing the innovative science of PCSK9 inhibitors and novel macrocyclic peptide technology, LIPFENDRA was designed to significantly lower LDL-C in the form of a convenient once-daily pill,” said Dr. Dean Y. Li, president, Merck Research Laboratories. “This is a pivotal moment as we bring the first U.S. FDA-approved oral PCSK9 inhibitor to adults with high LDL-C, offering patients an important new option. We’re proud of our work with regulators on this rigorous and efficient review process.”

The approval is based on two Phase 3 trials from the CORALreef clinical program: CORALreef Lipids and CORALreef HeFH. In CORALreef Lipids, LIPFENDRA reduced LDL-C by 56% compared to placebo at week 24. A 60% decrease from baseline in LDL-C was observed with LIPFENDRA when biologically impossible baseline LDL-C values were removed according to revised data handling rules (post-hoc). In CORALreef HeFH, LIPFENDRA reduced LDL-C by 59% at week 24 compared to placebo. Results from these Phase 3 trials showed treatment with LIPFENDRA resulted in reductions across other atherogenic lipoproteins associated with atherosclerotic cardiovascular disease (ASCVD) risk including non-high-density lipoprotein cholesterol (non-HDL-C) and apolipoprotein B (ApoB). The safety profile of LIPFENDRA in CORALreef Lipids was similar to placebo. In CORALreef HeFH, the most common adverse reactions in adults with HeFH treated with LIPFENDRA that occurred at higher frequencies compared to placebo were diarrhea (LIPFENDRA 7%, placebo 2%) and dizziness (LIPFENDRA 9%, placebo 4%). In both trials, similar proportions of LIPFENDRA-treated patients and placebo-treated patients discontinued treatment because of an adverse reaction. For additional information on results from the CORALreef trials, see “Clinical data supporting FDA approval” below.

“High LDL-C is a major risk factor for atherosclerotic cardiovascular disease, which is the leading cause of death globally,” said Dr. Ann Marie Navar, a lead author of the CORALreef Lipids study and associate professor of medicine in the Division of Cardiology at UT Southwestern Medical Center. “In two Phase 3 trials, LIPFENDRA led to impressive reductions in LDL-C. Now, for the first time, patients have an oral PCSK9 inhibitor for LDL lowering.”

An ongoing clinical trial is studying the effect of LIPFENDRA on cardiovascular morbidity and mortality. It is not yet known if LIPFENDRA can reduce the risk of cardiovascular morbidity and mortality.

“One of the greatest opportunities to help manage the risk of ASCVD lies in the timely identification and appropriate treatment of risk factors, such as LDL-C,” said Katherine Wilemon, CEO of the Family Heart Foundation. “We are encouraged by the approval of a new oral PCSK9 inhibitor option for adults who need additional LDL-C lowering.”

Clinical data supporting FDA approval

LIPFENDRA was approved based on results from two pivotal Phase 3 trials from the CORALreef clinical trial program:

At week 24, in the CORALreef Lipids trial, treatment with LIPFENDRA resulted in: A statistically significant and clinically meaningful reduction in LDL-C of 56% compared to placebo at week 24 (95% CI: -61, -51; p<0.001), with a reduction from baseline (primary endpoint) in LDL-C of 57% for LIPFENDRA compared to an increase of 3% for placebo; When LDL-C values ≤0 were removed according to revised data handling rules (post-hoc), a statistically significant and clinically meaningful reduction in LDL-C of 60% for LIPFENDRA compared to an increase of 3% for placebo at week 24 (95% CI: -62, -57%). Statistically significant reductions in secondary endpoints from baseline to week 24 compared to an increase of 3% for placebo: 54% mean reduction in non-HDL-C for LIPFENDRA; 50% mean reduction in ApoB for LIPFENDRA. At week 24, in the CORALreef HeFH trial, treatment with LIPFENDRA resulted in: A statistically significant and clinically meaningful reduction in LDL-C of 59% compared to placebo (95% CI: -66, -53; p<0.001), with a reduction from baseline (primary endpoint) in LDL-C of 58% for LIPFENDRA compared to an increase of 3% for placebo; Statistically significant reductions in secondary endpoints from baseline to week 24 compared to an increase of 2% for placebo: 52% mean reduction in non-HDL-C for LIPFENDRA; 48% mean reduction in ApoB for LIPFENDRA. In CORALreef Lipids, the frequencies of adverse reactions in adults with hypercholesterolemia were similar between those treated with LIPFENDRA and those receiving placebo. Similar proportions of LIPFENDRA-treated patients and placebo-treated patients discontinued treatment because of an adverse reaction. In CORALreef HeFH, the most common adverse reactions in adults with HeFH treated with LIPFENDRA that occurred at higher frequencies compared to placebo were diarrhea (LIPFENDRA 7%, placebo 2%) and dizziness (LIPFENDRA 9%, placebo 4%). Similar proportions of LIPFENDRA-treated patients and placebo-treated patients discontinued treatment because of an adverse reaction. The safety profile observed in adults with HeFH in CORALreef HeFH was otherwise generally consistent with that observed in adults with hypercholesterolemia in CORALreef Lipids.

About CORALreef Lipids and HeFH

CORALreef Lipids (NCT05952856) was a Phase 3, multicenter, double-blind, randomized, placebo-controlled study in which 2,904 patients with hypercholesterolemia (including those with and without HeFH) and a history of a major ASCVD event or increased risk for development of a first major ASCVD event were randomized in a 2:1 ratio to receive LIPFENDRA 20 mg orally once daily (n=1,935) or placebo (n=969) for 52 weeks. Patients required additional LDL-C reduction despite stable lipid-lowering treatment with moderate- or high-intensity statins (unless statin intolerance was documented) with or without other lipid-modifying therapy. Patients taking PCSK9 inhibitors were excluded from the trial. The primary efficacy outcome measure was the mean percent change from baseline to week 24 in LDL-C.

CORALreef HeFH (NCT05952869) was a Phase 3, multicenter, double-blind, randomized, placebo-controlled study in which 303 patients with HeFH were randomized in a 2:1 ratio to receive LIPFENDRA 20 mg orally once daily (n=202) or placebo (n=101) for 52 weeks. Patients required additional LDL-C reduction despite stable lipid-lowering treatment with moderate- or high-intensity statins, with or without other lipid-modifying therapy. The diagnosis of HeFH was made by clinical criteria or genotyping. The primary efficacy outcome measure was the mean percent change from baseline to week 24 in LDL-C.

About CORALreef clinical trial program

The efficacy and safety profile of LIPFENDRA continues to be evaluated through the comprehensive CORALreef Clinical Trial program evaluating over 19,000 participants who have hypercholesterolemia. LIPFENDRA was FDA approved based on two pivotal Phase 3 studies: CORALreef Lipids (NCT05952856) and CORALreef HeFH (NCT05952869). LIPFENDRA is continuing to be evaluated in the large cardiovascular outcomes trial, CORALreef Outcomes (NCT06008756), which has completed enrollment with over 14,500 participants. Additional CORALreef clinical trials include CORALreef Extension (NCT06492291), CORALreef Pediatric (NCT07058077), and CORALreef Combination (NCT07216482).

About LIPFENDRA® (enlicitide) tablets 20 mg

LIPFENDRA is an oral proprotein convertase subtilisin kexin type 9 (PCSK9) inhibitor FDA-approved as an adjunct to diet and exercise to reduce low-density lipoprotein cholesterol (LDL-C) in adults with hypercholesterolemia, including heterozygous familial hypercholesterolemia (HeFH). Cardiovascular outcomes trials have demonstrated that reducing LDL-C lowers the risk for major adverse cardiovascular events (MACE) in adults at increased risk, when treated with statins or monoclonal antibody PCSK9 inhibitors as an add-on to statin therapy. LIPFENDRA is the first oral PCSK9 inhibitor approved to reduce LDL-C and is a novel macrocyclic peptide that inhibits the binding of PCSK9 to LDL receptors.

Selected Safety Information

In the CORALreef Lipids trial the frequencies of adverse reactions were similar between adults treated with LIPFENDRA and those receiving placebo. Similar proportions of LIPFENDRA-treated patients and placebo-treated patients discontinued treatment because of an adverse reaction.

In the CORALreef HeFH trial the most common adverse reactions that occurred at higher frequencies compared to placebo were diarrhea (LIPFENDRA 7%, placebo 2%) and dizziness (LIPFENDRA 9%, placebo 4%). Similar proportions of LIPFENDRA-treated patients and placebo-treated patients discontinued treatment because of an adverse reaction. The safety profile was otherwise generally consistent with that observed in adults with hypercholesterolemia in the CORALreef Lipids trial.

Merck’s focus on cardiometabolic and respiratory diseases

Merck has a long history of developing treatments for cardiometabolic and respiratory diseases. Building on a legacy that began nearly 70 years ago with the introduction of our first cardiovascular therapy, we are committed to advancing research for patients impacted by cardiometabolic and respiratory diseases. Our focus spans a range of diseases, including atherosclerotic cardiovascular disease, heart failure, pulmonary hypertension and chronic obstructive pulmonary disease (COPD).

Advancements in the treatment of cardiometabolic and respiratory diseases can make a critical difference for patients and health systems around the world. At Merck, we strive for scientific excellence and innovation in all stages of research, from discovery through approval and life cycle management.

About Merck

At Merck, 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. For more information, visit www.merck.com and connect with us on X (formerly Twitter), Facebook, Instagram, YouTube and LinkedIn.

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).

Please see Prescribing Information for LIPFENDRA (enlicitide) at https://www.merck.com/product/usa/pi_circulars/l/lipfendra/lipfendra_pi.pdf and Patient Information/Medication Guide for LIPFENDRA (enlicitide) at https://www.merck.com/product/usa/pi_circulars/l/lipfendra/lipfendra_ppi.pdf.

More News From Merck & Co., Inc.

Merck & Co. Inc. (NYSE:MRK) shares are in focus Monday after a wave of analyst activity capped by a new FDA approval for its cancer drug Keytruda.

Merck stock is trading near recent highs. What’s the outlook for MRK shares? Analyst Consensus and Recent Actions The stock carries a Buy rating with an average price target of $133.86. Recent analyst moves include:

Morgan Stanley: Equal-Weight (Raises Target to $113.00) (July 9) RBC Capital: Outperform (Maintains Target to $142.00) (July 8) Wells Fargo: Overweight (Raises Target to $150.00) (July 8) The FDA ApprovalThe week culminated Friday when the U.S. Food and Drug Administration (FDA) approved KEYTRUDA and KEYTRUDA QLEX, Merck’s anti-PD-1 therapies, each in combination with Padcev, as treatment before and after surgery for adults with muscle-invasive bladder cancer.

The approval expands Keytruda’s already dominant position in the immuno-oncology landscape and adds another indication to the drug’s broad label, which already spans multiple cancer types.

Merk Shares Edge HigherMRK Price Action: At the time of publication, Merck shares are trading 0.11% higher at $123.68, according to data from Benzinga Pro.

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Key Takeaways Merck secured EU approval for Keytruda plus Padcev in cisplatin-ineligible MIBC patients.The regimen is the first PD-1 inhibitor plus ADC combination to be approved in the EU for this use.Keytruda plus Padcev regimen is approved before & after surgery for patients ineligible for cisplatin therapy. Merck (MRK - Free Report) announced that the European Commission has approved its blockbuster PD-L1 inhibitor, Keytruda (pembrolizumab), and its subcutaneous formulation, Keytruda Qlex, each in combination with Pfizer’s (PFE - Free Report) antibody-drug conjugate ("ADC"), Padcev (enfortumab vedotin-ejfv), for treating certain patients with bladder cancer.

The regulatory body in Europe has now approved Keytruda in combination with Padcev as neoadjuvant treatment and then continued after radical cystectomy as adjuvant treatment in adult patients with resectable muscle-invasive bladder cancer (MIBC) who are ineligible for cisplatin-based chemotherapy.

Following the latest nod, the Keytruda+Padcev regimen became the first and only PD-1 inhibitor plus ADC combination to be available in the European Union for the given indication. The FDA approved the Keytruda+Padcev regimen for a similar indication in November 2025.

Last month, the EMA’s Committee for Medicinal Products for Human Use (“CHMP”) recommended approval of the combination of Keytruda plus Padcev for the given indication.

MRK’s Price PerformanceYear to date, shares of Merck have rallied 16.3% compared with the industry’s rise of 6.4%.

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The EU approval for Keytruda+Padcev regimen was based on data from the phase III KEYNOTE-905 study, conducted in collaboration with Pfizer and Astellas.

Data from the same showed that Keytruda plus Padcev, as perioperative treatment, led to statistically significant and clinically meaningful improvements across several endpoints, including event-free survival, overall survival and pathologic complete response versus surgery alone in the given patient population.

The latest approval of the Keytruda-Padcev regimen in Europe marks a significant advancement in the treatment of resectable MIBC, providing a new perioperative treatment option that has the potential to improve outcomes and extend survival in this underserved patient population.

The approval should further expand Keytruda’s presence in bladder cancer treatment.

MRK’s Keytruda & Padcev in Cisplatin-Eligible MIBCKeytruda in combination with Padcev is currently under review in the United States for the treatment of MIBC in patients who are eligible for cisplatin-based chemotherapy.

A decision from the FDA is expected on Aug. 17, 2026.

If approved, these regimens would be the first and only perioperative treatments for patients with MIBC, regardless of cisplatin eligibility, potentially establishing new standards of care.

Merck’s biggest revenue driver, Keytruda, is approved for different types of cancer indications. The drug generated $8.03 billion in sales in the first quarter of 2026, up 8% year over year.

The December 2023 acquisition of Seagen added Padcev to Pfizer’s oncology portfolio. The drug generated sales worth $591 million in the first quarter of 2026, up 39% on a year-over-year basis.

MRK’s Zacks Rank & Stocks to ConsiderMerck currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the biotech sector are Immunocore (IMCR - Free Report) and Liquidia Corporation (LQDA - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Over the past 60 days, estimates for Immunocore’s 2026 bottom line have improved from a loss of 88 cents per share to earnings of 6 cents. Over the same period, EPS estimates for 2027 have risen from 24 cents to 87 cents. IMCR stock has lost 13.6% year to date.

Immunocore’s earnings beat estimates in three of the trailing four quarters, while missing the same on the remaining occasion, with the average surprise being 46.66%.

Over the past 60 days, estimates for Liquidia’s 2026 earnings per share have risen from $1.50 to $2.97, while estimates for 2027 have increased from $2.91 to $4.81 during the same time. LQDA shares have surged 119% year to date.

Liquidia’s earnings beat estimates in three of the trailing four quarters, while missing the same on the remaining occasion, with the average surprise being 54.40%.

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Tulisokibart is the first anti-TL1A monoclonal antibody to demonstrate clinical remission at 12 weeks in moderately to severely active UC in a Phase 3 trial

Tulisokibart was designed to help address immuno-fibrosis, a key driver of disease progression in inflammatory bowel disease (IBD) and other immune-mediated inflammatory conditions

RAHWAY, N.J.--(BUSINESS WIRE)--Merck (NYSE: MRK), known as MSD outside of the United States and Canada, today announced positive topline results from the Phase 3 ATLAS-UC induction-only study (Study 2) evaluating tulisokibart (MK-7240), an investigational humanized monoclonal antibody targeting tumor necrosis factor-like cytokine 1A (TL1A), in patients with moderately to severely active UC. The study successfully met its primary endpoint of clinical remission according to the Modified Mayo Score (MMS) at week 12, as well as key secondary endpoints. Consistent with previously reported Phase 2 studies, no safety concerns were identified.

“These positive Phase 3 induction results for tulisokibart are the first for an anti-TL1A biologic. They represent an important step forward for patients with moderately to severely active ulcerative colitis who – despite available treatments – continue to experience symptoms, and do not achieve clinical remission,” said Dr. Eliav Barr, senior vice president, head of global clinical development and chief medical officer, Merck Research Laboratories. “These results reinforce the potential of this novel approach designed to help address immuno-fibrosis, a key driver of chronic immune dysregulation and disease progression in ulcerative colitis.”

Results from the ATLAS-UC Study 2 will be presented with the results from the ongoing induction and maintenance study (Study 1) at an upcoming scientific congress and will be shared with regulatory authorities.

Tulisokibart has the broadest development program in the novel anti-TL1A class and is currently being evaluated in seven disease indications. Phase 3 studies include ATLAS-UC (NCT06052059) in UC and ARES-CD (NCT06430801) in Crohn’s disease (CD). Phase 2 studies are evaluating tulisokibart in systemic sclerosis-associated interstitial lung disease (SSc-ILD) (NCT05270668), rheumatoid arthritis (RA) (NCT07176390), psoriatic arthritis (PsA) (NCT07486960), radiographic axial spondyloarthritis (r-axSpA) (NCT07133633) and hidradenitis suppurativa (HS) (NCT06956235). For an overview of Merck’s clinical development program in immunology, please click here.

About ATLAS-UC
ATLAS-UC (NCT06052059) is a Phase 3, randomized, double-blind, placebo-controlled program designed to evaluate the efficacy and safety of tulisokibart in adults with moderately to severely active ulcerative colitis (UC). The program consists of two independent studies: Study 1, which includes both induction and maintenance treatment, and Study 2, which includes only induction treatment.

Study 2 is investigating whether at least one tulisokibart dose level is superior to placebo in the proportion of participants achieving clinical remission, according to the MMS at week 12. Participants were randomized to either receive a high dose IV of tulisokibart, a low dose IV of tulisokibart or an IV placebo. Key secondary endpoints at week 12 include percentage of patients who experienced endoscopic improvement, percentage of patients who achieved clinical response per MMS and percentage of patients who demonstrated histologic-endoscopic mucosal improvement.

About Ulcerative Colitis
Ulcerative colitis (UC) is one of the most common types of IBD and is a chronic progressive immuno-fibrotic disease that affects the large intestine and rectum. Recent evidence suggests that UC involves not only the mucosa but also deeper transmural changes with fibrosis in the colorectal wall. Millions of people worldwide live with UC, and symptoms can be unpredictable and may significantly impact quality of life. UC often follows a relapsing and remitting course, with symptoms that may include diarrhea, rectal bleeding, abdominal pain, bowel urgency and weight loss. Many patients with UC do not achieve adequate disease control despite the availability of currently approved treatments.

About Tulisokibart
Tulisokibart is an investigational humanized monoclonal antibody directed to a novel target, TL1A, that is associated with both intestinal inflammation and fibrosis (immuno-fibrosis). Tulisokibart is thought to bind both soluble and membrane-bound TL1A. Merck is developing tulisokibart for the treatment of immune-mediated inflammatory diseases, including UC, CD, SSc-ILD, RA, PsA, r-axSpA and HS.

About Immuno-fibrosis
Immuno-fibrosis is the process by which inflammation and fibroblast activation drive disease activity and progression in many autoimmune conditions, including UC. Immuno-fibrotic diseases are chronic progressive conditions marked by immune dysregulation, inflammation and fibroblast activation. The impact of immuno-fibrosis may vary by disease, stage and patient. The complexity of immuno-fibrosis underscores the need for treatment options that address both inflammation and fibrosis. Merck is advancing research to deepen the understanding of immuno-fibrosis and help translate the science into new approaches.

Merck’s Commitment to Immunology
Advances in our understanding of human biology have led to the emergence of innovative medicines and new modalities that aim to change approaches to the treatment of immune-mediated inflammatory diseases. Merck scientists are leveraging deep expertise in immunology to discover and develop therapies to help people living with these conditions. Our research is focused on investigating novel targets such as TL1A and CD30L, as well as newer modalities like T-cell engagers, and exploring their potential across a range of immune-mediated inflammatory diseases.

About Merck
At Merck, 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. For more information, visit www.merck.com and connect with us on X (formerly Twitter), Facebook, Instagram, YouTube and LinkedIn.

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).

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