Merck & Co. 8-K

Summary

Q3 2026 results with updated FY2026 guidance. Merck reported sales growth led by oncology, including KEYTRUDA and WINREVAIR, and animal health, while GAAP and non-GAAP EPS declined. The company also reported oncology pipeline advances, including FDA acceptance of sac-TMT for priority review and FDA and European Commission approvals for other cancer treatments.

Key Figures

• Pharmaceutical sales rose 4% to $16.3B. KEYTRUDA and KEYTRUDA QLEX sales were $8.60B, up 6%, including $830M from QLEX; WINREVAIR sales increased 93% to $694M. Merck cited growth across these products and others, alongside an approximately $550M benefit from purchase timing. Generic competition contributed to declines in JANUVIA/JANUMET and BRIDION.
• Animal Health sales increased 4% to $1.68B, with growth in both livestock and companion animal products.
• Both Q3 GAAP and non-GAAP EPS included a $0.12 per-share charge for the SciBrunch license. Gross margin pressure reflected higher intangible-asset amortization, restructuring and production costs.

Guidance

The sales outlook includes an approximately 1% favorable foreign-exchange impact; the EPS outlook includes an approximately $0.15 per-share favorable foreign-exchange impact. The EPS range includes one-time charges of $3.62 per share for Cidara, $2.31 for Terns and $0.12 for SciBrunch; the SciBrunch charge was not in the prior outlook. Merck said the outlook does not assume additional significant business-development transactions.

Guidance changes, derived from earlier filings

Metric	Period	Earlier guidance	Guidance now	Change
Sales	FY2026	$66.3B-$67.3B	$66.8B-$67.3B	narrowed (raised low end)
Non-GAAP gross margin	FY2026	≈81%	≈81%	reaffirmed
Non-GAAP operating expenses	FY2026	$42.0B-$42.7B	$42.4B-$42.9B	raised
Non-GAAP other expense, net	FY2026	≈$1.4B expense	≈$1.4B expense	reaffirmed
Non-GAAP effective tax rate	FY2026	35.0%-36.0%	32.0%-33.0%	lowered
Non-GAAP EPS	FY2026	$2.66-$2.76	$2.77-$2.82	raised
Diluted share count	FY2026	≈2.48B	≈2.48B shares	reaffirmed

Investor Takeaways

• Watch sales and EPS against the updated FY2026 ranges; Q3 growth included a purchase-timing benefit, while oncology and animal-health products were key contributors.
• Regulatory decisions will test pipeline progress: the FDA’s PDUFA date for sac-TMT is 6/15/2027, for ENFLONSIA is 3/22/2027, and for IDVYNSO is 4/22/2027.