MRK · Merck & Co., Inc.

Merck's first-quarter 2026 results reflect a period of significant strategic activity and mixed financial performance. Total worldwide sales of $16.3 billion grew 5% (3% ex-FX), driven by strong performance in oncology and animal health, partially offset by declines in vaccines and diabetes. KEYTRUDA sales rose 12% to $8.0 billion, benefiting from higher demand in metastatic and earlier-stage indications, as well as the timing of wholesaler purchases in the U.S. WINREVAIR continued its strong launch trajectory with sales of $525 million, up 88% year-over-year, reflecting uptake in the U.S. and early international markets. Animal health sales grew 13% to $1.8 billion, driven by both livestock and companion animal portfolios.

However, GAAP and non-GAAP results were significantly impacted by a $9.0 billion charge for the acquisition of Cidara Therapeutics, resulting in a GAAP loss per share of $1.72 and a non-GAAP loss per share of $1.28. Excluding this charge, non-GAAP EPS would have been positive. R&D expenses surged to $12.6 billion from $3.6 billion, primarily due to the Cidara charge. Gross margin on a GAAP basis declined to 74.2% from 78.0%, while non-GAAP gross margin was relatively stable at 81.9%.

Management commentary highlighted progress in transforming the portfolio through science-led business development, including the planned acquisition of Terns Pharmaceuticals, which is expected to close in May and will result in a one-time charge of approximately $5.8 billion. The company also achieved regulatory milestones, including FDA approval of IDVYNSO for HIV-1. Full-year 2026 guidance was narrowed and raised: worldwide sales are now expected between $65.8 billion and $67.0 billion, and non-GAAP EPS between $5.04 and $5.16, excluding the impact of the Terns acquisition. The guidance reflects confidence in the underlying business momentum despite the near-term earnings drag from the Cidara deal.