Merck raises 2026 sales forecast to $67.3B, cuts profit view

Merck raised its 2026 revenue forecast to $67.3 billion while cutting profit guidance on Terns Pharmaceuticals acquisition charges.

The company now expects adjusted earnings of $2.66 to $2.76 per share, down from a prior range of $5.04 to $5.16, reflecting $2.43 per share in acquisition-related costs. That includes a $5.7 billion one-time charge, or $2.31 per share, tied to the Terns deal, plus roughly 12 cents per share for the acquisition and advancement of MK-4208, Merck said in its earnings release. The outlook also absorbs a $9 billion charge, or $3.62 per share, from the January acquisition of Cidara Therapeutics.

Merck posted a second-quarter adjusted loss of 13 cents per share, beating the 27-cent loss analysts expected, on revenue of $16.61 billion, up 5 percent from a year earlier and above the $16.36 billion consensus. The company reported a net loss of $1.34 billion, or 54 cents per share, compared with net income of $4.43 billion, or $1.76 per share, in the year-earlier period.

Keytruda generated $8.37 billion in sales, up 5 percent, including $463 million from the new injectable version of the immunotherapy. The injectable form is central to Merck's strategy to offset revenue declines after the original intravenous version loses patent protection in 2028. Winrevair, used to treat pulmonary arterial hypertension, booked $588 million in sales, up 75 percent from a year earlier and above the $565 million analysts expected. Pneumococcal vaccine Capvaxive rose 42 percent to $184 million, while the animal health business posted $1.78 billion in revenue.

The guidance revision comes as Merck races to offset generic competition for Type 2 diabetes drugs Januvia and Janumet later this year and blockbuster immunotherapy Keytruda in 2028. The company is betting on newer products to replenish revenue, including the first PCSK9 pill designed to lower bad cholesterol, which received approval in July. Merck has been on an acquisition spree, also buying biotech firms to bolster its pipeline as it faces the looming patent cliff.

The PCSK9 pill represents a potential shift in cholesterol management, offering an oral alternative to injectable treatments from Amgen and Regeneron. Winrevair's rapid growth also gives Merck a foothold in the pulmonary hypertension market, a niche with limited treatment options and high unmet need.

The raised sales outlook indicates management expects the new product portfolio to carry growth through the patent cliff period. Investors will watch for further updates on Keytruda's injectable rollout and Winrevair's expansion when Merck hosts its next earnings call. The stock's reaction to the mixed guidance will depend on whether investors focus on the revenue raise or the profit cut.

This article is for informational purposes only and does not constitute investment advice.