Q2 2026 Merck & Co Inc Earnings Call Transcript
Key Points
- Merck & Co Inc (MRK) delivered strong Q2 2026 revenue of $16.6 billion, a 5% increase, driven by robust oncology and animal health performance.
- KEYTRUDA family sales grew 4% to $8.4 billion, with strong uptake in earlier-stage cancers and continued demand in metastatic indications.
- The FDA approved LIPFENDRA, the first oral PCSK9 inhibitor, which has the potential to expand the market and address significant unmet need in LDL cholesterol management.
- Positive Phase 3 results for sac-TMT in endometrial cancer (TroFuse-005) and tulisokibart in ulcerative colitis (ATLAS-UC) demonstrate pipeline progress and derisking.
- The company raised and narrowed its full-year 2026 revenue guidance to $66.3-$67.3 billion, reflecting confidence in continued growth.
- New product launches, including WINREVAIR (up 75%) and WELIREG (up 67%), are contributing to portfolio diversification and growth.
- The acquisition of Terns Pharmaceuticals adds MK-4208, a promising late-stage therapy for CML, strengthening the hematology pipeline.
- The company is advancing a broad HIV pipeline, including a potential first oral once-weekly treatment (islatravir/lenacapavir) and a monthly oral PrEP option.
- Management expressed high confidence in the company's future, citing faster-than-expected clinical milestones and a strong pipeline with over $70 billion in commercial opportunity.
- The company maintains a disciplined capital allocation strategy, including a commitment to dividends and share repurchases, while pursuing value-creating business development.
- Merck & Co Inc (MRK) reported a non-GAAP loss of $0.13 per share in Q2 2026, impacted by a one-time charge of $2.31 per share from the Terns acquisition.
- The full-year 2026 EPS guidance of $2.66-$2.76 includes significant one-time charges and ongoing costs related to the Terns acquisition, which may pressure near-term earnings.
- US KEYTRUDA growth is expected to moderate as the drug reaches peak penetration in several key indications, and a $250 million benefit from wholesaler timing in Q3 2025 will not repeat.
- The company faces potential challenges in the LIPFENDRA launch, including the need to establish reimbursement and access, which may slow initial uptake.
- The tulisokibart program had a setback with the SSc-ILD study failing to meet its primary endpoint, raising questions about the immunofibrosis hypothesis.
- OHTUVAYRE sales in Q3 2026 will be impacted by the unwind of specialty pharmacy purchases from Q2, potentially causing volatility in quarterly results.
- The company's tax rate is expected to be significantly higher (35-36%) due to the non-tax deductible Terns charge, impacting net income.
- Gross margin declined by 1.1 percentage points due to higher inventory reserves, which could pressure profitability.
- The company faces intense competition in the PCSK9 market, with injectable options already established, and the need to educate primary care physicians on the new oral option.
- The flu prevention program (MK-1406) has been delayed to a second northern hemisphere season, pushing potential approval to 2029, which may be later than some investors expected.
Thank you for standing by. Welcome to Merck & Company, Inc., Rahway, New Jersey, USA second quarter sales and earnings conference call. (Operator Instructions) This call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the call over to Mr. Peter Dannenbaum, Senior Vice President, Investor Relations. Sir, you may begin.
&-
Thank you, Shirley, and good morning, everyone. Welcome to the second quarter 2026 conference call for Merck & Company, Incorporated, Rahway, New Jersey, USA. Speaking on today's call will be Rob Davis, Chairman and Chief Executive Officer; Caroline Litchfield, Chief Financial Officer; and Dr. Dean Li, President of Research Labs.
Before we get started, I'd like to point out that we have items in our GAAP results such as acquisition-related charges, restructuring costs, and certain other items that we have excluded from our non-GAAP results. There is a reconciliation in our press
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
