MRK
MRK
Merck & Co., Inc.
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Oncology and Animal Health Grow: Cidara Charge Impacts Earnings (MRK Q1 2026 Earnings Call)

By Dr. Graph | Updated on May 26, 2026 | earnings

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Merck reported strong top-line revenue growth for the first quarter of fiscal year 2026, driven by solid demand across its global oncology and companion animal health portfolios. However, a significant one-time transaction charge related to its recent pipeline expansion impacted bottom-line non-GAAP earnings.

Cidara Therapeutics Acquisition Charge Drives Merck to First-Quarter Net Loss

Merck delivered year-over-year revenue expansion in the first quarter of fiscal year 2026. Global total revenues rose to $16.3 billion during the quarter. This performance represents a 5% increase on a reported basis, which equals 3% growth when excluding foreign exchange effects.

A significant pipeline investment depressed Merck's bottom-line performance. The company reported a non-GAAP net loss of $1.28 per share. This decline was driven by a $9 billion one-time charge from the Cidara Therapeutics acquisition, which reduced non-GAAP EPS by $3.62.

Merck Narrows and Raises Full-Year Guidance on Strong Commercial Outlook

Management raised the midpoint of its profitability outlook due to strong commercial execution. Full-year non-GAAP EPS is projected to be between $5.04 and $5.16, which includes a positive foreign exchange impact of approximately $0.10. Highlighting this execution, CFO Caroline Litchfield stated, "Our commercial and operational execution continues to enable us to generate strong results in the short term while we advance our broad and deep pipeline."

Oncology and Pulmonary Therapies Drive Strong Commercial Sales Performance

Oncology demand spearheaded product revenue growth. Sales for the Keytruda product family reached $8 billion, driven by uptake in earlier-stage cancer indications. Additionally, Welireg sales rose to $199 million, which represents ex-exchange growth of 43% due to international rollouts.

New pulmonary launches and established vaccines showed contrasting performance. Winrevair generated global sales of $525 million, demonstrating rapid commercial adoption for this pulmonary arterial hypertension treatment. In contrast, Gardasil sales fell to $1.1 billion because of lower demand in China and Japan.

Dosing Schedule Focus Guides Initial Late-Stage Retinal Pipeline Strategy

Clinical development strategies dominated the discussion on pipeline candidates. President of Merck Research Laboratories Dean Li clarified that early trials for the novel Wnt pathway agonist MK-3000 will focus on a four-week dosing schedule. He noted that while regulatory label requirements dictate this initial dosing interval, Merck is actively exploring other frequencies for long-term clinical development.

Disclaimer: This report is for informational purposes only and does not constitute financial or investment advice. Always conduct your own research or consult a qualified professional before investing. Past performance is not indicative of future results.

Frequently Asked Questions

What were the primary drivers and headwinds in Merck's vaccines segment?
Pneumococcal vaccine Capvaxive sales grew 31% ex-exchange to $142 million, driven by robust U.S. demand. However, this segment was offset by Gardasil sales, which decreased ex-exchange due to lower demand in China and Japan.
What are Merck's raised full-year revenue projections for fiscal year 2026?
The company expects full-year revenue between $65.8 billion and $67.0 billion, which represents 1% growth at the low end and includes approximately 1 percentage point of positive foreign exchange impact.
What positive clinical efficacy results did Merck report for its cardiometabolic pipeline?
In the Phase II CADENCE trial, Winrevair reduced pulmonary vascular resistance and demonstrated a hazard ratio of 0.18 for clinical worsening events at a specified dose.
How did U.S. wholesaler purchase timing affect Keytruda's first-quarter sales?
Keytruda's global oncology sales benefited from a $250 million positive impact in the United States due to the timing of purchases, which will face a corresponding headwind later in the year.

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