Merck Raises Sales Outlook as Acquisition Charge Drives Loss
Quarterly sales increased to $16.607 billion as cancer-drug demand offset declining diabetes revenue.
MerCSC Merck & Co. (MRK), the pharmaceutical and animal-health company, raised its annual sales outlook after posting an acquisition-driven quarterly loss.
The results extended a gradual sales recovery while highlighting the cost of expanding Merck’s drug pipeline.SSSSS. Sales grew 5% from a year earlier for a third consecutive quarter, while constant-currency growth improved to 4% from 3% in the first quarter.
Second-quarter sales rose from $16.400 billion a year earlier and $16.286 billion in the preceding quarter. Merck recorded a GAAP loss of $1.335 billion, or $0.54 a share, compared with net income of $4.427 billion, or $1.76 a share, a year earlier. The non-GAAP loss was $0.13 a share, narrowing from a $1.28-a-share loss in the first quarter.
Pharmaceutical sales increased 5% to $14.760 billion, supported by oncology and cardiometabolic and respiratory products. KEYTRUDA and KEYTRUDA QLEX sales reached $8.366 billion, though year-over-year growth slowed to 5% from 12% in the first quarter. WINREVAIR sales climbed to $588 million, while WELIREG, CAPVAXIVE and PREVYMIS also recorded double-digit growth.
GARDASIL and GARDASIL 9 returned to growth, rising 4% to $1.169 billion as demand improved in Asia Pacific and Europe and European tender timing helped sales. JANUVIA and JANUMET revenue fell 31% to $429 million amid competition, lower U.S. demand and pricing pressure. Animal Health sales remained near $1.8 billion, though growth slowed to 8% from 13% in the prior quarter.
Research-and-development expense rose to $9.7 billion from $4.0 billion, chiefly because of a $5.7 billion charge tied to the Terns acquisition. Higher amortization and inventory write-downs reduced GAAP gross margin to 73.5% from 77.5%, while increased administrative, technology and launch-promotion spending lifted selling, general and administrative expense 10%.
Merck now expects 2026 sales of $66.3 billion to $67.3 billion, raising both ends of its previous range. Its non-GAAP earnings forecast is $2.66 to $2.76 a share, down from $5.04 to $5.16 after incorporating the Terns charge and related costs. The company also expects a roughly 81% non-GAAP gross margin and operating expenses of $42.0 billion to $42.7 billion.
Restructuring expense declined 73% to $151 million, while acquisition-related costs increased to $1.090 billion. The widening gap underscored Merck’s shift from restructuring toward spending on acquired products and drug development.