Merck & Co. said on Thursday it exceeded first-quarter sales expectations, driven by strong demand for its flagship cancer immunotherapy Keytruda, sending its shares up as much as 5% in premarket trading.
The drugmaker, however, reported a net loss for the quarter after recording a $3.62-per-share charge related to its acquisition of Cidara Therapeutics, an antiviral drug developer.
Investors are closely watching Merck & Co.’s long-term growth outlook as it manages near-term acquisition expenses and looks to lessen its dependence on Keytruda, which is expected to lose patent protection later this decade.
Sales of Keytruda, the world’s top-selling prescription medicine, increased 12% to $8 billion, surpassing estimates of $7.6 billion. The figure includes $128 million from a newer injectable version of the drug, which was previously available only as an infusion.
According to analysts at J.P. Morgan, the results exceeded expectations, with investor attention now shifting toward data from advanced pipeline candidates expected in 2026 and 2027.
Merck & Co. has strengthened its late-stage pipeline in recent years through a combination of internal development, acquisitions, and strategic partnerships.
“We’re in the midst of initial launches of over 20 new products, almost all of which have blockbuster potential, across a broad set of therapeutic areas,” CEO Rob Davis said in his prepared remarks posted on the company’s website.
Merck & Co. reported a 5% rise in first-quarter revenue to $16.3 billion, exceeding analysts’ expectations of $15.8 billion, according to LSEG data.
The company posted an adjusted loss of $1.28 per share for the quarter, narrower than the $1.51 per share loss forecast by analysts.
For the full year, Merck tightened its previous guidance range while raising the midpoint. It now expects 2026 earnings of $5.04 to $5.16 per share on revenue between $65.8 billion and $67 billion, compared with its earlier outlook of $5.00 to $5.15 per share on sales of $65.5 billion to $67 billion.
“The guidance revision looks less compelling, particularly after the conservative guide to start the year,” said Cantor analyst Carter Gould.
Merck & Co. said its outlook does not account for any impact from its planned acquisition of Terns Pharmaceuticals, which is expected to result in a one-time charge of $2.35 per share.
Sales of Winrevair surged 88% to $525 million, surpassing analysts’ expectations of $479 million.
Meanwhile, revenue from the human papillomavirus vaccine Gardasil declined 19% to $1.07 billion, weighed down by weaker demand in China and Japan.
