Global pharma powerhouse Merck has reported a sharp split in its first-quarter 2026 performance.
All due to its strong operational momentum across oncology, HIV, and animal health offset by heavy acquisition-related charges that pushed the company into a reported loss.
Total worldwide sales rose to $16.3 billion, up 5% (3% excluding foreign exchange), powered by continued strength in key growth franchises.
Oncology remained the engine, led by KEYTRUDA/KEYTRUDA QLEX, which surged to $8.0 billion in sales, up 12%. The cardiopulmonary drug WINREVAIR delivered explosive growth, jumping 88% to $525 million, while Animal Health climbed 13% to $1.8 billion.
Despite the strong revenue base, profitability was hit hard. GAAP loss per share came in at $1.72, while non-GAAP loss per share was $1.28, both weighed down by a $3.62 per share charge tied to the acquisition of Cidara Therapeutics.
The company’s bottom line also reflected a dramatic swing in research spending, with GAAP R&D expenses rising to $12.6 billion, compared with $3.6 billion a year earlier, driven largely by acquisition accounting and pipeline investment.
CEO Robert M. Davis framed the quarter as a strategic inflection point, emphasizing pipeline expansion and regulatory wins.
“We are moving with speed to transform our portfolio to one with a diversified set of growth drivers across a broad set of therapeutic areas,” said Robert M Davis, chairman and chief executive officer.
“During the first quarter, we continued to strengthen our pipeline with science-led business development, including our planned acquisition of Terns. We also achieved several important milestones, such as the FDA approval of IDVYNSO – which marks a new chapter in our longstanding commitment to people living with HIV.
"I am pleased with our progress and excited for what’s ahead, as we enter a particularly robust period of Phase 3 data readouts and deliver on the promise of our pipeline for patients.”
Regulatory momentum was a standout. The FDA approved IDVYNSO, a once-daily oral HIV treatment, and Merck secured multiple oncology approvals and priority reviews, including expansions across KEYTRUDA-based regimens and combination therapies in ovarian, bladder, and kidney cancers.
The company also strengthened its pipeline through business development, announcing an agreement to acquire Terns Pharmaceuticals, adding the experimental blood cancer candidate TERN-701 to its hematology portfolio. The deal is expected to close in May and will result in a multi-billion-dollar accounting charge.
Looking ahead, Merck raised and narrowed its full-year outlook. It now expects 2026 sales of $65.8 billion to $67.0 billion, and non-GAAP EPS of $5.04 to $5.16, despite continued headwinds from acquisition-related costs.
Even with near-term earnings pressure, the underlying message from the quarter is clear: Merck is betting heavily on its oncology dominance, expanding cardiometabolic pipeline, and next-generation infectious disease portfolio to drive the next phase of growth.
