Merck & Co Inc (NYSE:MRK, XETRA:6MK) shares fell 2% at Tuesday’s opening bell after the drugmaker issued a 2026 outlook that came in below Wall Street expectations, overshadowing a fourth-quarter earnings and revenue beat.
Merck forecast 2026 revenue of $65.5 billion to $67 billion, compared with analysts’ estimates of $67.6 billion, and adjusted earnings of $5 to $5.15 per share versus expectations of $5.36. The outlook includes a roughly $9 billion one-time charge related to its acquisition of Cidara Therapeutics.
The company said upcoming patent expirations for drugs including Januvia, Janumet, and Bridion will pressure sales, and its guidance reflects pricing changes tied to a recent US government drug pricing agreement.
Merck said it plans to cut $3 billion in costs by 2027 and continue investing in its pipeline and acquisitions to offset future patent expirations, including Keytruda’s loss of exclusivity in 2028.
For Q4, the company reported adjusted earnings of $2.04 per share for the quarter, above the $2.01 expected by analysts.
Revenue of $16.4 billion, up 5% year-over-year, also topped the $16.19 billion consensus estimate.
Keytruda remained the main growth driver, with full-year sales of $31.7 billion, while newer products such as WINREVAIR and CAPVAXIVE contributed to revenue. Merck also reported growth in animal health but a decline in GARDASIL vaccine sales.
"In 2025, we continued to advance leading-edge science to deliver transformative medicines and vaccines that are improving health outcomes for patients around the world,” Merck CEO Robert Davis said in a statement.
"Our business benefited from demand for our innovative portfolio, including for KEYTRUDA, increasing contributions from new launches in cardiometabolic and respiratory as well as vaccines, and strong performance of Animal Health.”