Merck & Co. 8-K
PositiveEarningsGuidance raisedImpairment / charge
Cidara acquisition charge drove quarterly losses; KEYTRUDA and WINREVAIR fueled sales growth.
Filed 2026-04-30 06:53 ET
- 2.02 Results of Operations
- 9.01 Financial Statements and Exhibits
Summary
Q1 2026 results with a raised and narrowed FY2026 outlook. Worldwide sales grew 5% (3% excluding foreign exchange), led by oncology, Animal Health and newer launches; reported losses reflected a $9.0B Cidara acquisition charge. Merck also agreed to acquire Terns Pharmaceuticals, adding the Phase 1/2 chronic myeloid leukemia candidate TERN-701, and reported FDA approval of IDVYNSO and positive Phase 3 data for KEYTRUDA plus Padcev in bladder cancer.
Key Figures
| Metric | Q1 2026 | Q1 2025 | Y/Y |
|---|---|---|---|
| Sales | $16.3B | $15.5B | 5% |
| Net loss attributable to Merck & Co., Inc. | $(4.24)B | $5.08B | n/m |
| Non-GAAP net loss attributable to Merck & Co., Inc. | $(3.16)B | $5.61B | n/m |
| Diluted EPS | $(1.72) | $2.01 | n/m |
| Non-GAAP diluted EPS | $(1.28) | $2.22 | n/m |
- Sales growth was driven by KEYTRUDA/KEYTRUDA QLEX ($8.03B, +12%), WINREVAIR ($525M, +88%) and Animal Health ($1.79B, +13%). Gardasil/Gardasil 9 sales fell 19%, primarily on lower demand in China and Japan.
- The Cidara acquisition charge was $9.0B in research and development expense and $3.62 per share; it drove the quarterly GAAP and non-GAAP losses.
- The proposed Terns acquisition is expected to close in May and result in a one-time charge of ≈$5.8B (≈$2.35 per share). Merck also expects an ≈$0.12 EPS impact over the remainder of 2026 after closing, including operational investment and financing costs.
Guidance
| Metric | Period | Guidance | Prior | Direction |
|---|---|---|---|---|
| Sales | FY2026 | $65.8B-$67.0B; ≈1% positive foreign-exchange impact | $65.5B-$67.0B | Raised; narrowed |
| Non-GAAP gross margin | FY2026 | ≈82% | ≈82% | Reaffirmed |
| Non-GAAP operating expenses | FY2026 | $36.0B-$36.8B | $35.9B-$36.9B | Narrowed |
| Non-GAAP other (income) expense, net | FY2026 | ≈$1.3B expense | ≈$1.3B expense | Reaffirmed |
| Non-GAAP effective income tax rate | FY2026 | 23.5%-24.5% | 23.5%-24.5% | Reaffirmed |
| Non-GAAP EPS | FY2026 | $5.04-$5.16; includes ≈$0.10/share positive foreign-exchange impact | $5.00-$5.15 | Raised; narrowed |
| Diluted share count | FY2026 | ≈2.48B | ≈2.48B | Reaffirmed |
Investor Takeaways
- The Terns transaction is expected to close in May; its completion and resulting costs are not reflected in the FY2026 outlook.
- Upcoming FDA decisions include WELIREG combinations (6/19/2026 and 10/04/2026), KEYTRUDA/Padcev (8/17/2026), and I-DXd (10/10/2026).
The summary is written by an AI model reading the filing.
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