Merck raises 2026 earnings target as Keytruda Qlex sales surge

Merck increased its expected profit for 2026 on Thursday after reporting third-quarter results that exceeded analyst expectations. The company attributed the stronger performance to high sales of its cancer drug Keytruda and the rapid uptake of its newer injectable form, Keytruda Qlex.

The firm now projects adjusted earnings between $2.77 and $2.82 per share for the year. This guidance is higher than the previous range of $2.66 to $2.76 per share. The new forecast accounts for a one-time charge of $400 million, or 12 cents per share, related to a licensing deal with Chinese drugmaker SciBrunch. Merck also adjusted its revenue outlook, setting the bottom of the range at $66.8 billion instead of $66.3 billion. The top of the range remains $67.3 billion.

Keytruda generated $8.60 billion in sales during the quarter. This figure surpassed the $7.73 billion estimate from analysts tracked by StreetAccount. The total includes $830 million from Keytruda Qlex, an under-the-skin injection launched in 2025. This amount was significantly higher than the $649 million analysts had projected. It marked the best quarter for the new product to date and suggests it may soon reach blockbuster status, a threshold defined as sales exceeding $1 billion.

Merck is relying on Qlex to maintain its market position as patents for the original intravenous version of Keytruda begin to expire in 2028. The company aims to shift patients to the injectable version because it is considered more convenient. This strategy is designed to protect sales volumes after the original formulation loses its exclusivity. The pharmaceutical company has also pursued several recent acquisitions to offset the impact of upcoming generic competition.

Other products contributed to the strong quarterly performance. Winrevair, a treatment for a rare lung disease, saw sales rise 93% to $694 million. This result beat the $645 million analyst forecast. The Gardasil vaccine, which prevents cancers caused by HPV, brought in approximately $2 billion. This figure was higher than the $1.76 billion expected by analysts and followed a previous year marked by excess inventory and weak demand in China. Merck’s animal health division reported $1.68 billion in sales, which was slightly below analyst estimates.

Merck reported adjusted earnings of $2.49 per share for the quarter, compared with the $2.08 expected by analysts surveyed by LSEG. Revenue reached $18.09 billion, a 5% increase from the prior year. Net income was $5.07 billion, or $2.04 per share, down from $5.79 billion, or $2.32 per share, in the same period last year.