On its third-quarter earnings investor call Thursday morning, Merck executives touted recent pipeline wins alongside a strong performance for subcutaneous Keytruda and pulmonary arterial hypertension drug Winrevair that drove the pharma’s overall sales expectations to surpass expectations.
Facing patent expiries for its blockbuster cancer therapy Keytruda, Merck will lean into its existing pipeline and portfolio to offset the looming loss of revenue, while also keeping an eye out for potential business development opportunities.
“For 2027, we see it as another year of investment as we invest behind our expansive pipeline and our new product launches to drive long-term growth,” Chief Financial Officer Caroline Litchfield said during an investor call Thursday morning. At the same time, she added, “business development remains an important priority, and we retain financial flexibility within a strong investment-grade credit rating to pursue additional science-driven value-enhancing transactions.”
Merck CEO Robert Davis, for his part, expressed optimism that Merck will weather the impending Keytruda cliff. “As we look across the portfolio, I feel very good about where we are and our ability to navigate the Keytruda LOE,” he said during the same call, highlighting “recent positive clinical readouts” that support the company’s plans.
Leerink Partners agreed with the executives’ assessment, with an eye toward more clinical data yet to come. Merck’s pipeline is “progressing well as we near the Keytruda LoE, in our view, with important Ph3 readouts across oncology, immunology and infectious diseases expected in the next six months,” Leerink Partners wrote in a Thursday morning note.
Another key attraction on Thursday’s call was Merck’s investigational anti-TL1A antibody tulisokibart, for which it reported a Phase 3 win in ulcerative colitis in June and expects to share data details for soon. The company is also expecting Phase 2 results for the asset in rheumatoid arthritis and axial spondyloarthritis. Meanwhile, in the cardiovascular and respiratory space, Merck will present results from a Phase 2b trial in metabolic dysfunction-associated steatohepatitis (MASH) at the upcoming American Association for the Study of Liver Diseases (AASLD) conference next month.
For now, with Keytruda still raking it in as the industry’s best-selling drug, Merck reported $18.1 billion in third-quarter revenue, solidly beating analyst expectations. Guggenheim had projected between $17.44 billion and $17.34 billion.
Merck’s Q3 earnings come on the heels of the 2026 European Society for Medical Oncology (ESMO) meeting in Madrid, where the company showcased its Kelun-Biotech–partnered TROP-2 directed antibody-drug conjugate (ADC) sacituzumab tirumotecan (sac-TMT) across a range of late-stage studies.
Davis highlighted “potential practice-changing advances” from Merck’s expansive sac-TMT program, calling out “the first positive Phase 3 results” for sac-TMT in advanced or recurrent endometrial cancer. The drug cut the risk of death by more than 30% in the Phase 3 TroFuse-005 trial, which met all of its primary and secondary endpoints.
Based on these data, the FDA has accepted an application for sac-TMT in the indication for priority review, with a target action date of June 15.
Despite the early summer PDUFA date for sac-TMT, Merck “is in discussions with the FDA and is hopeful for an earlier approval,” Leerink said in a Thursday morning note to investors, adding that this could be helped by a Commissioner’s National Priority Voucher (CNPV) granted to the ADC last year, “though it’s unclear to us whether the CNPV is still active after Commissioner Makary’s departure from FDA.”
Dean Li, president of Merck Research Laboratories, also addressed the TroFuse program.
“First, we are moving with speed and rigor to establish early leadership in multiple disease and treatment settings,” he said on the investor call. “Many of these first mover opportunities are in gynecologic cancers, where there remains significant unmet need.” That said, Li added that Merck also plans to “go quite aggressively” in lung cancer with sacTMT.
Also at ESMO, Merck and partner Moderna shared detailed data from the successful Phase 3 trial of their personalized cancer vaccine, intismeran autogene. While Merck in its corporate presentation noted a planned regulatory submission for intismeran autogene, the company did not provide specific timing for the application.
Outside of oncology, analysts were looking for updates on Merck’s recently approved Lipfendra for high LDL cholesterol. Litchfield said that, while it’s still early, Merck is encouraged by the drug’s initial launch, and that “prescription trends and physician feedback has been positive.”
By the numbers
The $18.1 billion reported by Merck for the third quarter represented 5% growth year-over-year for the company, according to its earnings announcement.
Merck highlighted two products as posting particularly strong sales in Q3. Keytruda QLEX—a subcutaneous version of the blockbuster immunotherapy approved in September 2025—brought in $830 million in the quarter, an uptake rate that “appears to surpass Street expectations,” BMO said. Meanwhile, sales of pulmonary arterial hypertension (PAH) medicine Winrevair grew 93% to $694 million, beating analyst estimates by 7%.
BMO Capital Markets similarly attributed Merck’s “solid” performance in part to “faster-than-expected Keytruda Qlex conversions (+15% vs. consensus)” and the continued expansion of Winrevair. Last month, the FDA updated Winrevair’s label to incorporate positive results from Merck’s Phase 3 HYPERION study in adults with newly diagnosed PAH on background therapy, potentially expanding the drug into an earlier treatment market.
Looking ahead, Merck raised its full-year 2026 sales guidance slightly from between $66.3 billion to $67.3 billion to $66.8 billion to $67.3 billion.
