Merck beats Q2 on Keytruda strength
Analysis based on 8 articles · First reported Aug 04, 2026 · Last updated Aug 04, 2026
Merck's better-than-expected results and raised revenue guidance are likely to support its stock price in the near term, while the lowered earnings forecast due to acquisition charges may temper gains. The strong Pembrolizumab performance and promising QLEX uptake provide confidence ahead of biosimilar competition, but the patent cliff remains a key overhang.
Merck reported second-quarter revenue of $16.61 billion, up 5% year-over-year and above analyst expectations, driven by strong sales of its cancer drug Pembrolizumab. Pembrolizumab sales rose 5% to $8.37 billion, including $463 million from the newer subcutaneous formulation Pembrolizumab QLEX, which exceeded estimates. The company posted a net loss due to a $5.7 billion charge from its acquisition of Terns Pharmaceuticals. Merck raised its full-year 2026 revenue forecast to $66.3-$67.3 billion but cut its adjusted earnings forecast to $2.66-$2.76 per share, reflecting acquisition charges. Gardasil sales were slightly above consensus, while measles, mumps, rubella and chickenpox vaccine sales declined due to lower U.S. demand. Animal health sales rose 8%. Separately, Merck's experimental drug tulisokibart met its main goal in a mid-stage trial for hidradenitis suppurativa but failed in a lung disease trial. CEO Rob Davis (curator) characterized Pembrolizumab's upcoming patent loss as 'more of a hill than a cliff.'
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